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Time to replace the Island’s competition watchdog?

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PRESSURE is building on the States to take action against the Island’s embattled competition regulator, which has been accused of being ‘too big for its boots’ and ‘at the point of failure’.

CICRA chief executive Michael Byrne

This week the Channel Islands Competition and Regulatory Authorities announced it would not be challenging a Royal Court decision to allow an appeal by ATF Fuels, which the regulator had said had broken competition law by refusing to sell Aviation Beauport fuel it could then supply to its customers.

The court criticised the action taken by the regulator and the fuel company has now called for urgent measures to be taken against CICRA. ATF Fuels has also invited other people and businesses with similar concerns to lobby States Members in order to bring about action.

It adds that it knows of ‘frustrated economically successful’ businesses in other sectors that are also considering action against the regulator.

And a former chairman of JT and Jersey’s Tourism Shadow Board, John Henwood, has also raised concerns about CICRA, which he says is ‘too big for its boots’ and should be wound up and replaced with a new body that will look out for the real interests of local consumers.

Meanwhile, the threat of a vote of no confidence is still hanging over the board of the Jersey Competition Regulatory Authority – which along with its Guernsey equivalent makes up the Channel Islands Competition and Regulatory Authorities – from Senator Philip Ozouf, who was the politician responsible for setting it up.

CICRA, however, denies that it is failing and says it has reduced costs for consumers by at least £30 million (full report: Page 8).

‘In short, a consumer protection body was a good idea, but it has been badly done,’ said Mr Henwood.

He added that CICRA was costing the public more than £1 million a year – half of which is raised indirectly via the charges it levies on States-owned companies JT, Ports of Jersey and Jersey Post.

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And much of that money is, he says, being wasted funding a body that acts as if it is regulating a European country, rather than an Island of 100,000 people and one that at times pursues ‘vainglorious goals’.

Mr Henwood’s comments come just days after CICRA published a decision in which it approved the acquisition of a TV and film company based in Tennessee – Scripps Networks Interactive Inc – by Discovery Communications Inc based in New York.

CICRA says that the wide nature of Jersey’s competition law means that its approval was required because, after the deal, the company would supply more than a quarter of basic TV channels to pay TV service providers for Jersey.

It says it has previously called for the law to be changed to avoid such situations but that so far its recommendations had not been implemented by the States.

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Previously, CICRA has also reviewed the proposed merger of British Airways and Iberia and the Kraft takeover of Cadburys.

Mr Henwood said that such cases were evidence of how CICRA was not working as intended. He also accused the regulator of bullying JT and forcing it to spend hundreds of thousands of pounds on legal fees defending itself in court against actions that had failed – thereby damaging a business owned by the people of Jersey. CICRA denies that is the case, and says that publicly owned companies still needed regulating to ensure good value for consumers.

‘The States should call time on CICRA/JCRA and wind up the organisation while simultaneously drawing up clear terms of reference for a successor body, requiring the new regulator to look after the real interests of the consumer instead of pursuing vainglorious goals like interfering in the merger of British Airways and Iberia or the Kraft takeover of Cadburys,’ said Mr Henwood.

‘By too big for their boots I mean they have a totally disproportionate approach to the task in hand. Put simply, they act as if they are regulating a medium-sized European country, rather than an Island of 100,000 people. And, frankly, they have achieved nothing worthwhile for the man and woman in the street.’

In response to Mr Henwood’s comments, CICRA chairman Michael Byrne said that there were clear examples of how the regulator was making a difference for consumers, including ending price fixing in conveyancing fees.

And he added that when it came to reviewing cases such as those involving the US TV companies, the regulator was just doing as the law – which CICRA thinks is too wide and has recommended be changed numerous times since 2011 – asks it to.

‘We have been told that efforts are being made to implement our recommendations, but in the meantime the law, as drafted, is in effect,’ he said.

ATF Fuels meanwhile, in an advert in the JEP this week, said: ‘We are concerned that the organisation is now at the point of failure and that intervention is needed immediately.’

JCRA income in 2016 (the latest accounts available)

Telecommunications licence fees £540,638 (£491,931 in 2015)

Postal licence fees £9,865 (£27,559)

Ports of Jersey £125,198 (£106,368)

Competition law grant and other competition law funding £518,525 (£290,135)

Mergers and acquisitions fees £89,693 (£52,500)

Bank interest and sundry income £582 (£1,220)

Total: £1,284,501 (£969,713)

Lucy Stephenson

By Lucy Stephenson
author

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