Hugo Ramirez Risk, former trade negotiations director for the Dominican Republic, urged the government to act now to implement competition law to fight against anti-competitive actions taken by large firms in detriment to consumers and the efficiency of local markets. He expressed concern that firms that otherwise would be competing for their share of the Dominican market instead may resort to actions to prevent, restrict or distort competition itself.
Ramirez says that the European Partnership Agreement (EPA) signed with the European Union already rules that participating Cariforum countries may establish all institutional arrangements and administrative procedures to enforce competition laws through national competition authorities.
He alerted: “The Dominican Republic has not yet complied with this international commitment despite the existing market disorder created by many large, old and publicly known anti-competitive conducts.”
Ramirez, says that while EPA does not address the issue of regulating mergers in the region already most Cariforum countries are developing a policy on merger control regulation and called for the DR to also act.
Ramirez explains that the EPA contemplates Competition Policy to promote and maintain competition and enhance economic efficiency in production, trade and commerce while at the same time promoting and protecting consumer welfare. But, he said it is responsibility of each country to create competition law to prohibit anti-competitive agreements between two or more competitors that would limit competition amongst themselves for higher profits.
The Dominican government has yet to approve competition regulations and appointments for approval leaving the markets vulnerable to old and wellknown anti-competition actions by dominant market players. He explained that in cases where a company may have 40% market share for a particular product, the latter can set the prices for the goods and services.
Other examples of anti-competitive conducts are: fixing of purchase or selling prices, directly or indirectly, restricting competition by arranging not to compete against each other in markets, or to restrict supply of sources, limiting or controlling production, markets or investments, conspiring to affect tenders submitted in response to a request for a bid, treating parties engaged in similar commercial transactions unequally, tying to a sale or contract additional obligations that are not connected to the substantive transaction, refusing to give competitors access to infrastructure or networks where such access is essential to the provision of a service.
He urges the Dominican government competition authority be granted the ability to penalize firms engaged in anti-competitive practices. He explained that these authorities be mandated to monitor, investigate, detect, make determinations and take any appropriate action to inhibit and penalize enterprises whose business conduct prejudices trade or prevents, restricts or distorts free competition.
Competition law is created to foster a truly competitive market, where consumers can benefit from price competition, there is greater product development, improved product specifications and better quality of service between competitors. Competition law is concerned with agreements or practices that actually or potentially distort competition within a market in a way that is ultimately detrimental to the consumer.