Competition watchdog bites back

Monday 12 March 2018

Jersey's competition watchdog has hit back at calls for reform after facing heavy public scrutiny in the weeks following a high-profile court case involving ATF Fuels.

CICRA Chief Executive Michael Byrne has claimed that the public don’t have a clear enough view of exactly what the organisation is tasked with doing, and that they are unaware of the many victories they have scored on behalf of consumers.

Back in 2016, the body accused ATF Fuels of abusing a dominant market position at the airport fuel farm by failing to provide an operator with fuel for re-sale.

But following a successful appeal, that judgement was thrown out by the Royal Court after a battle costing more than £500,000 of taxpayers’ money, leading the Chief Minister to call for a review of the body. That was supported by Senator Philip Ozouf, who actually helped set up the regulator when he was Treasury Minister. 

Pictured: ATF are calling for a regulatory rethink after CICRA's judgement was thrown out by the Royal Court.

ATF Operations Director Jonathan Best has since questioned the effectiveness of CICRA, with the company highlighting their concerns on social media and in leaflets distributed through islanders’ doors. He alleged that the company had failed to act on their worries about fuel industry competitor Rubis, which controls 100% of La Collette fuel terminal.

In an interview with Connect magazine, Mr Byrne dispelled these concerns, reassuring islanders that all concerns would be thoroughly investigated – but only if there was sufficient evidence.

“We can’t simply on the fly or on the basis of rumour or gossip launch into investigations on companies. What we require is something of more substance – evidence that supports assertions. It is not sufficient to say, 'We believe that the operator in Jersey is exploiting or ripping off its customers.' We need further evidence to take that forward, otherwise we just become a vehicle through which competitors can launch into accusations against each other and impose regulation burdens – it’s quite unnecessary,” he said. 

He added that the body had been accused of allowing the possibility of monopolies to thrive in Jersey, but stated that this should not always set alarm bells ringing: “The markets in small-scale economies like Jersey by definition tend to be more prone to being monopolised because of economies of scale. The evidence to suggest that there was behaviour or agreements [in the fuel industry] wasn’t evidence that we found… I guess it’s not so much a question of whether [monopolies] are acceptable, it’s just a reality of the market structure. CICRA don’t have the power to restructure markets, the States have that power.” 

Pictured: CICRA Chief Executive, Michael Byrne.

That misunderstanding – both among the public and politicians – over whether CICRA can change the way an industry works is something Mr Byrne said has fuelled negative feeling towards the body. With just nine people, he added that the body is responsible for work that would otherwise be spread across several regulators in the UK, but that they manage well on limited resources.

He accepted that CICRA could better communicate what they do, but said that the organisation felt in a ‘catch 22’ where they couldn’t “shout” about their victories for fear of destroying the good relationship they have with businesses. 

Those ‘wins’ have included helping bring down the price of conveyancing fees by ending price-fixing arrangements by lawyers, as well as introducing the ability for islanders to swap networks but keep their old phone numbers – a service that 45,000 people have used. The result of another intervention saw one phone operator bring their data roaming charges down from £2.99 to 20p per mb as a result of an intervention, Mr Byrne claimed. 

“The challenge we have is because we are in this quasi-judicial role… Often businesses [accept out decisions], but they also don’t want to be pilloried in public by us. It’s quite difficult to be able to cooperatively reach an agreement with companies to then say, ‘Gotcha!’ It creates an environment of distrust. We would much rather, quietly, make these successes on behalf of the consumer than spend huge amounts of money fighting with companies just for the satisfaction of saying, ‘we did it.’”

Over the years CICRA’s work has had an impact on everyone - here is a summary of some of the things we have achieved. pic.twitter.com/iTUiS7L574

— CICRA (@CICRAregulator) February 19, 2018

Read the full feature on Jersey's fuel industry, 'Adding fuel to the fire' in Connect here.