Guernsey has now followed Jersey's lead by introducing a
body of competition laws to the island. The laws came into force on
1 August and will be particularly relevant to businesses that
actively trade and conduct business in Guernsey.
Guernsey's competition laws are largely modelled on those
already in force in Europe. Findings of anticompetitive behaviour
by the European Commission are often headline news. For example, in
2009 Intel was ordered to pay a record EUR1.06 billion after the
European Commission found that it had abused a dominant position in
the market for computer chips.
In addition, whilst it is relatively rare for the European
Commission to block a proposed merger in its entirety, it is
prepared to do so if it believes that the merger would hinder
effective competition. For instance, earlier this year the European
Commission blocked the proposed merger of Deutsche Börse and
NYSE Euronext which would have created the world's largest
stock exchange operator.
The Guernsey Competition and Regulatory Authority (formerly the
Office of Utility and Regulation) is responsible for administering
and enforcing Guernsey's competition laws. The Guernsey
Regulator coordinates its activities with its Jersey counterpart
under the umbrella of the Channel Islands Competition and
Regulatory Authority ("CICRA").
Guernsey law now prohibits the abuse of a dominant position
(including imposing unfair trading conditions and limiting
production to the prejudice of consumers) and anti competitive
agreements between businesses (such as fixing prices and sharing
markets between competitors). Even informal nonbinding agreements
are caught by the laws. Cartels are considered to be one of the
most serious offences under competition law.
In addition, CICRA must give prior approval to any mergers
the combined turnover in the Channel Islands of the businesses
involved exceeds £5 million; and
two or more of the businesses involved each have turnover in
Guernsey which exceeds £2 million.
Such mergers will only be approved if CICRA is satisfied that
they will not (a) substantially lessen competition and (b)
prejudice consumers, the economy of the Bailiwick and the public
Breaches of Competition Laws
CICRA has a wide range of powers and enforcement tools. For
example, it can order the payment of fines of up to 10% of annual
turnover, that offending behaviour cease and mergers completed
without its prior approval be unwound. In addition, once a breach
has been found third parties adversely affected by the relevant
conduct may be able to claim damages in the Royal Court.
Still Open for Business
The island's new competition laws are specifically concerned
with conduct and turnover in Guernsey. International mergers and
acquisitions are unlikely to be effected. Considering the wide
ranging enforcement tools of CICRA, Guernsey businesses should be
well advised to review their current commercial arrangements and
talk to a legal adviser if they are in doubt about whether they are
in compliance with the new laws.
Originally published in Guernsey Press, Law & Accountancy
– September 2012
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).