Henry Su was the featured speaker at the Fair Trading Commission’s Competition Law and Policy Training Programme, which was held in March. A trial attorney with the United States Federal Trade Commission (USFTC), Su has worked with the agency since 2011 and has served as senior competition advisor to Commissioner J. Thomas Rosch and chairwoman Edith Ramirez. Su’s responses reflect only his personal views, which are not necessarily those of the USFTC or any commissioner.
How do legislation, regulation and enforcement impact your work?
The United States (US) Federal Trade Commission (USFTC) is primarily a law enforcement agency. Since the commission’s creation in 1914, the US Congress has passed various anti-trust and consumer protection laws and given enforcement authority to the agency.
Accordingly, as an attorney in the Bureau of Competition, my principal responsibilities involve investigating business transactions and practices that may violate any of the anti-trust laws that the agency enforces, recommending enforcement or settlement to the commission if there is an apparent violation, and prosecuting the matter if the commission votes in favour of enforcement.
If Congress were to introduce new legislation amending or supplementing any of the anti-trust laws that the commission enforces, then that certainly would affect the scope of my work.
In common law jurisdictions like the US, the United Kingdom, and Barbados, however, anti-trust enforcement depends not only on legislation, but also on the gradual development of doctrines and standards by the courts, which are charged with interpreting and applying the laws to the facts and circumstances presented in each case.
Are there dualities between the Barbados and US markets with regard to the benefits of competition policy?
Even in the US, anti-trust markets come in all shapes and sizes, depending on the industry, sector and geography involved. Notwithstanding the diversity and variety of anti-trust markets, we have found that competition policy generally yields the best results for consumers in terms of lower prices, greater choices, higher quality, and more innovation, and our anti-trust laws have proven sufficiently nimble to address the multiplicity of anti-trust concerns that may arise.
For example, we have applied the anti-trust laws to the conduct of cooperatives in Puerto Rico, which are a unique feature of that island’s business culture and economy . . . . We have also applied the anti-trust laws to mergers that occur on island markets, such as Hawaii.
Beyond these two examples, I would also point to vigorous enforcement of the anti-trust laws by our individual states as further evidence that competition policy yields benefits to consumers even in smaller or localised markets.
How critical is merger regulation in a small, developing state such as ours?
In my view, it is even more critical in a small, developing state, where there may be fewer suppliers to begin with, to be vigilant of acquisitions and combinations that eliminate a supplier or change its incentives as a market participant and competitor. That said, there is no “magic minimum number” of suppliers that ensures a competitive marketplace.
Instead, what merger analysis requires is a careful evaluation of each supplier in a relevant market and its competitive significance to customers and consumers, and an assessment of the merger’s impact on the structure of the market and the behaviour of the remaining suppliers in that market.
I should add that some sectors, like telecommunications and distribution, with a regional scope may present opportunities for the Barbados Fair Trading Commission to coordinate its merger review with the review being conducted by other national authorities.
Furthermore, CARICOM’s ongoing efforts to develop a merger control policy for the CARICOM Single Market and Economy will further the objective of analysing some mergers that impact a much larger, regional market encompassing several small states.
What were some of the key points from your presentation that you would like workshop attendees to retain and apply?
Regarding dominance, anti-trust law protects competition, not competitors. The fact that a business practice disadvantages a market rival does not necessarily mean that it harms competition. Rivals may be negatively impacted by vigorous competition too. Accordingly, abuse of dominance or monopolisation should be invoked to condemn only conduct that excludes or impedes competition and hurts consumers.
Regarding mergers, merger enforcement seeks to prevent acquisitions and combinations of businesses that can lead to a single firm having a dominant position or a monopoly. Because the task involves predicting what likely will happen as a result of the transaction, it is vital to get as accurate and complete a picture of the real world as possible.
This requires talking to customers and competitors of the merging parties about supply, demand, prices, and other salient aspects of the relevant market, and looking for robust evidence of competitive effects in that market wherever and however we can find it, particularly with the use of economic analysis.
Regarding agreements, [one] should remember that characterisation usually matters greatly – i.e., whether an alleged restraint of trade is horizontal or vertical, price or non-price, naked or ancillary. Furthermore, agreements may be express or tacit, and the latter has to be proven with circumstantial evidence.
Finally, for most agreements, assessing their legality usually requires that we balance the anti-competitive effects against any pro-competitive benefits and business justifications. Economic analysis can help us make such an assessment.
While you were here in a teaching capacity, was there anything you learned that you were unfamiliar with before?
I was particularly interested in Mrs Nichola George-Benjamin’s [FTC’s general legal counsel] review of the facts and issues in the Fair Trading Commission’s case against the Barbados National Oil Company Ltd., which culminated in a decision by the Court of Appeal of the Barbados Supreme Court of Judicature [in February 2015].
I was unaware of this case and its progress through the courts. I have since pulled a copy of the opinion, and I enjoyed reading the High Court’s thorough and methodical dissection of the commission’s claim that BNOCL abused its dominant position in the market for the supply of heavy fuel oil (HFO) to Barbados Light & Power Co., Ltd., in breach of section 16 of the Fair Competition Act.
On a lighter note, is this your first time to the Caribbean?
This was not my first time in the Caribbean but it was my first visit to Barbados. Your island is of course very beautiful, and everyone I met was friendly and courteous. Although I spent most of my time in my hotel room and in a conference room, working on the training programme, I was able to squeeze in an early morning swim and several cool evening walks listening to the whistling frogs.
I also sampled flying fish and cou-cou, and intend to try my hand at making cou-cou at home.
As I told the attendees in thanking them for their interest and attention, I think that training programmes like this one put on by the commission serve an important purpose by engaging the public and the business community in an informed dialogue about the benefits of competition law and policy, and the mission and activities of the agency charged with its administration.
When citizens, consumers and businesses understand better the laws and policies that the agency enforces, they become more effective stakeholders in what should be a mutual enterprise to ensure a fair and competitive marketplace for all.