The Jamaica fair competition act 1993 and consumer protection from false and misleading advertising: a legal and economic analysis

• Author: Andrew D. Burgess
• Position: Dean end Senior Lecturer in Law, Faculty of Law, Cave Hill Campus, University of the West Indies
• Pages: 341-383

THE JAMAICA FAIR

COMPETITION ACT 1993 AND

CONSUMER PROTECTION FROM

FALSE AND MISLEADING

ADVERTISING:

A LEGAL AND ECONOMIC ANALYSIS

ANDREW D. BURGESS*

Introduction

The Fair Competition Act 19931

(FCA

or 'the Act') was passed into law in

Jamaica on the 9 March 1993 and came into operation on the 9 September

of that same year. The short title to the FCA provides that 'this Act may be

cited as the Fair Competition Act,

1993'.2

This short title,ithout more,

suggests that the purview of the FCA is competition law in

Jamaica.3

Com-

petition law, in turn, is usually concerned with the control or elimination of

business practices in the form of agreements or arrangements among enter-

prises which tend to restrict competition in the market for goods and services.4

Competition law is usually also concerned with the prevention of abuse of a

*Dean end Senior Lecturer in

Law,

Faculty of Law, Cave Hill Campus, University of

the

West Indies.

1 Act 9 of 1993.

2 S. 1.

3 Of course, generally

speaking,

the short

title

is to be treated as nothing more than the

"statutory nickname of an Act" for the purpose of facility of reference

to

the

Act:

see

Vacher &

Sons

Ltd.

v.

London Society

of

Competitors [1913]

AC 107,

128,

per Lord

Moulton;

National

Telephone

Co.

Ltd.

v.

Postmaster General [1913]

AC 546, 349, per

Lord Moulton. On occasions, however, regard may be had to the short

title:

see

e.g.

Att.

Gen.

v. Margate

Pier

and

Harbour

Co,

[1900]

1

Ch 749,

751,

per Kekewich, J.

4 See generally Whish,

Competition Law

(London: 1993) 1-47; WTO "Synthesis Paper on

the Relationship of Trade and Competition Policy to Development and Economic

Growth" (Note by the Secretariat, WT/WGTCPW/80 September, 1998).

dominant position in the market which may limit access to the market or

otherwise unduly restrict competition in the market.5 The overriding objective

of competition law is the maintenance and promotion of competition and

economic efficiency in the market place.

The maintenance and encouragement of competition by explicit legal

provision may be aimed at protecting a range of economic interests in

society.6

Thus,

for instance, the Canadian Competition

Act7

identifies four of these in

its purpose clause. These are (i) the promotion of the efficiency and adapt-

ability of the Canadian economy, (ii) the expansion of opportunities for

Canadian participation in world markets while at the same time recognizing

the role of foreign competition in Canada, (iii) ensuring that small and

medium sized enterprises have an equitable opportunity to participate in the

Canadian economy, and (iv) providing consumers with competitive prices

and product choices.

The sole economic interest which the FCA expressly seeks to promote in

legislating for the maintenance and encouragement of competition is provid-

ing consumers with competitive prices and product choices. Thus, it is

provided in the long title to that Act8 as follows:

"An Act to provide for the maintenance and encouragement of competition in

the conduct of trade, business and in the supply of services in Jamaica, with a

view to providing consumers with competitive prices and product choices."

This provision makes it clear that the essential motivation for the FCA is

the protection of consumers, not only in the free market economic theoretical

sense of maximising consumer welfare by enhancing allocative efficiency, but

also in the wider sense of protecting consumers against market practices which

amount to impair competition at the consumer's expense. It is for this reason

that Ransom, a leading commentator on the FCA, could describe the FCA as

a comprehensive scheme for both trade practices and consumer protection.10

'Advertising', it has been said, 'is the central symbol of consumer society.'11

It is hardly surprising, therefore, that the provisions in the FCA on false and

5 Ibid

6

Ibid.

7 RSC

1985,

c. -34 as amended.

8 It is well settled that the long title to an Act may be looked at for the purpose of

ascertaining the general scope of the Act" see Fones v. Sherrington [1968] 2 KB 539, 541,

per Sutton,

J.;

Fisher

v. Raven [1964] AC 210, 232-233, per Lord Dilhome

L.C.

9 As to this, see generally, Lipsey An

Introducation

to Positive

Economics

(London: 1989) Ch.

12.

10 Ransom, "The Fair Competition Act, 1993 (Jamaica) - Analysis and Comment - Pt. I"

(1994) 4 Carib. L.R. 110.

misleading advertising are the most obvious consumer protection provisions

in the

FCA.l2

These provisions represent the

first

legislative enactment in any

Caricom country to treat, in a general way, with the problem of protecting

consumers from false and misleading advertisement.13 The FCA, including

the misleading advertising provisions, has become somewhat of a legislative

model on competition law and consumer protection in Caricom. Thus, the

Caricom Draft Modd Law on

Competition,14

by and large, reproduces the

provisions of

the

FCA, and the St. Vincent and Grenadines

Fair Competition

Act, 199915 is a virtual carbon copy of

the

FCA.

The misleading advertising provisions in the FCA, therefore, represent

something of

a

legislative watershed, not only in Jamaica but also in Caricom,

They introduce critical novel concepts, such as, for example, false and

misleading representation prohibitions,16 unsubstantiated performance rep-

resentation prohibitions,l7 and testimonial prohibitionsl8 To define and apply

these concepts, courts will be required to interpret the provisions of the FCA

to give effect to the intended aims of that legislation. The challenge for the

courts

will

be to anchor these definitions and applications in the body of

legal

principles that are at

the

foundation of the common law tradition. The danger

in doing this, however, is that courts may limit the effect of the provisions by

11 Ramsay,

Consumer

Protection:

Text and

Materials

(London: 1989) 369. See also Pollay,

"Deceptive Advertising: Consumer Behaviour: A case of Legislative and Judicial

Reform" (1968-69) 17 U. of Kan, L. Rev. 625 who writes:

"The size of the (advertising) industry; its central role in today's economy; its crucial role

in the mass media and its general pervasiveness all dictate that advertising be one of the

first areas considered in any attempt to deal in consumer protection."

And see also Swan, "Misleading Advertising: Its Control" (1971) 9 Alberta LR 310.

12 In fact, the only consumer protection provisions identified by Ransom are those dealing

with false and misleading advertisement: See Ransom,

"The

Fair Competition Act 1993

(Jamaica) - Analysis and Comment - Part IP' (1994) 4 Carib, L.R

290-311.

13 Legislation such as the

Merchandise

Marks Act, I888, Cap. 244 (the corresponding

legislation in Caricom is Antigua, Cap. 368; Belize, Ch. 216; Dominica, Cap. 322, Cap.

195;

St. Vincent, Tit. XXIII,

Cap,

ii;

Trinidad and Tobago, Chap 82:82) and the Hire

Purchase

Act,

1974 (as amended) (the corresponding legislation in Caricom is Barbados,

Cap.

328; Belize, Ch. 214; Grenada, Hire Purchase Ordinance,

1961;

St Lucia, Hire

Purchase Ordinance, 1962; Trinidad and Tobago, Chap. 82:83) contain provisions

which can be said to provide some protection for consumers from false and misleading

advertising. But to the extent they do so, this protection exists only in a limited way and

only in relation to specific aspects of advertising.

14 This Draft Model Late on

Competition

is now before the Legal Affairs Committee of

Caricom for its consideration.

15 Act No. 23 of 1999.

16 See s.

37

(I) (a) and the discussion infra text accompanying nn. 76-98.

17 See s. 38(a) and the discussion

infra

text accompanying nn. 119-127

18 See s. 38(b) and the discussion

infra

text accompanying nn.

125-131.