The court upheld a fine previously imposed by Fair-Trade Authority Curaçao (FTAC) on Ernst & Young (see Monday paper). The latter, active in the fields of accounting, tax consultancy and business advice, did not report the acquisition of KPMG Dutch Caribbean.
Without going into the merits of this case, it might be interesting to discuss whether a similar regulatory body would be desirable and feasible for St. Maarten. Curaçao’s authority had earlier taken action against suspected price-fixing for post-paid tours sold at the island’s cruise terminal and fined a taxi association for not cooperating with its inquiry into possible cartel formation.
Also considering that the two countries are in a monetary union with shared central bank, currency and attorney general as well as under jurisdiction of a joint court, it could be worth exploring.
This mainly involves concentration of business that can lead to companies with a dominant position and thus less competition. Therefore, it is legally stipulated that a merger or acquisition must be reported to prior to its establishment.
That obligation provides FTAC with the ability to monitor the creation or strengthening of market shares totalling at least 30%. The agency cannot block concentrations but may impose fines if not reported when required or if incorrect and possibly misleading information is provided.
Ernst & Young fundamentally disagreed with the ruling and decision of the FTAC. According to the consultancy firm, no takeover took place.
Is there a competition issue in St. Maarten? The biggest one probably has more to do with some being fiscally compliant while others aren’t, but that’s a matter for tax officials.
Any fair trade authority obviously comes with a price tag, so the question should be asked whether this is a priority and worth the investment under present financial circumstances. It’s all about added value.
