Knowledge about the Competition Authority among the Aruban people is essential.
Minister Geoffrey Wever indicated that the Department of Economic Affairs, Commerce, and Industry did a lot of preparatory work to implement the Aruba Fair Trade Authority (AFTA).
In 2012, the Ministry of Economic Affairs, Social Affairs, and Culture commissioned SEO Economic Research (Amsterdam) to conduct research on competition in Aruba and answer how effective competition oversight can be shaped. SEO Economic Research released a report in 2013, "Towards effective competition in Aruba" with their findings and advice. At the time, the research focused on the Aruban market structures and the Aruban economy, and the administrative and legal context. Competition supervision experiences in other countries, particularly in the Caribbean region (Barbados and Jamaica), were included in the study.
Competition in three markets/sectors of interest in Aruba were analyzed:
- the wholesale and retail food trade (mini markets, supermarkets, wholesalers, and groceries);
- 2) the markets for banking products;
- the containerized liner route between Aruba, Curaçao, Bonaire, and Miami.
At the time, the investigation stumbled upon a cartel deal between several supermarkets. Another distortion was caused by maximum prices for a select group of products. There was a high degree of concentration in the market for banking products, which is of concern from a competition law perspective. The interest rate spread in Aruba (the difference between interest paid and received) - a significant indicator of the social efficiency of the market for banking products - was among the highest in the Caribbean. In the ocean container shipping market, the ABC route from Miami was the principal scheduled service serving Aruba. There was a concentrated market on that route with the largest shipping company shipping more than half of the containers from Miami.
In addition to investigating competition in the three markets, the researchers at the time estimated the potential benefits of competition policy for Aruba based on key figures. International studies show that the benefits of competition policy exceed the costs and that these benefits accrue to consumers to a significant degree. These studies estimate the welfare gains (in terms of Gross Domestic Product (GDP)) attributable to competition policy. A translation of these estimates to the Aruban economy results in structurally higher welfare in Aruba (higher GDP) of between Afl. 5 to 96 million per year.
Competition policy aims to monitor and promote effective competition. Effective competition leads to quality products and services at market-based prices and efficiency. Competition supervision prevents companies from behaving unfairly towards their competitors and their customers. It is the government's job to protect consumers from game-playing, to establish "rules of the game" for competition that entrepreneurs and businesses must abide by, and enforce those rules through effective competition oversight. The competition law stipulates the ground rules for the competition. SEO has therefore advised that the competition authority should also supervise consumer rights in Aruba.
Competition law is generally based on four pillars:
- Prohibition of abuse of an economic dominant position;
- the cartel prohibition prohibits anti-competitive agreements between the conduct of companies;
- merger control aimed at preventing mergers that eliminate competition;
- an 'advocacy' role of the competition authority, whereby the competition authority advises solicited and unsolicited on the effects on competition of existing and proposed government policies.
Finally, the Competition Authority also has a role in educating and informing the public and the business community about its duties and the rights and obligations of consumers and businesses facing competition on the island of Aruba. The Aruban competition rules, as contained in the Competition Ordinance, contain both (i) substantive competition law (prohibitions and/or obligations for market players) and (ii) formal aspects such as the structure of the organization and its tasks and powers, the method of enforcement (supervision and investigation) and legal protection (adversarial, objection, appeal, and appeal).
Minister Geoffrey Wever: "As the Aruban community has been able to follow in the media, the proposal for the Aruba Fair Trade Authority is part of the economic reforms of the Land Package for which a project for the implementation of the Aruba Fair Trade Authority has been prepared. Information on what the Aruba Fair Trade Authority will mean in practice for Aruba is important".