GRAND
CAYMAN, CAYMAN ISLANDS, 5 March 2019 

OfReg has issued
redrafted rules on penalties for breach of anti-competitive practices
law, responding to concerns by business stakeholders. The draft rules
are now out for a second consultation and, when implemented, will
deter anti-competitive practices in the utilities, fuel and ICT
sectors, and protect consumers from high prices, poor quality and a
lack of innovation.

The Office has now
set out in detail the six stages that it will follow in determining
penalties for breaches of the law, providing the clarity on the
methodology that was requested by licensees following the initial
consultation last year.

In determining
penalties, in the first instance OfReg will consider the severity of
the breach and the likelihood that the breach would cause harm to
competition and to consumers. Adjustments will then be made in the
subsequent five stages to account for relevant factors such as the
duration of the breach, any aggravating or mitigating factors,
deterrence, proportionality, and to account for any leniency
agreements that a Party may have entered into with the Office. The
maximum penalty than can be imposed for breach of anti-competitive
practices law is set at $3 million.

The legislation and
penalties regime ensure that the public can have confidence that
there is fair competition in the sectors under OfReg’s regulatory
remit.

Anti-competitive
practices include abuse of dominant market position, price fixing,
limiting the production of a good to artificially manipulate price,
bid rigging and colluding to divide markets. These practices are
harmful to consumers who pay a higher price for goods and services
that are of lower quality. Anti-competitive practices also inhibit
innovation which is vital to the development of efficiency and
quality.

Commenting
on the redrafted rules, Deputy CEO and Executive Director
of ICT Mr Alee Fa’amoe said: 

“OfReg
has listened to calls for greater clarity on the methodology that the
Office will use in calculating penalties for breach of
anti-competitive practices and these redrafted rules address the
concerns of licensees.

Penalties
are an essential tool in deterring anti-competitive conduct in the
sectors regulated by the Office. Consumers benefit from fair
competition in markets which leads to lower prices, improved quality
and investment in innovation as
licensees compete for the consumers’ business.
The law also protects business which suffer the consequences of
attempts by their competitors to distort, restrict or prevent
competition.”

For more information on the sectors that OfReg regulates,
visit ofreg.ky. 

The consultation can be found here and
respondents have until Wednesday 13 March 2019 to send their
submissions by email, post or courier to OfReg. Further details
are contained in the consultation document.  

ENDS   

OfReg (the Utility Regulation and
Competition Office) is the independent regulator for the electricity,
information and communications technology, water, wastewater and
fuels sectors in the Cayman Islands. OfReg also regulates
the use of electromagnetic spectrum and manages the .ky internet
domain.