KINGSTON, Jamaica, May 16, CMC – The Fair Trading Commission (FTC) has been given the green light to challenge the controversial merger between two mobile phone giants – Digicel and Claro.
The Supreme Court Tuesday threw out a petition filed by Digicel opposing the suit filed by the FTC challenging the merger between the Digicel and the now defunct Claro.
Digicel had contended that the FTC did not have the jurisdiction or authority to challenge the merger.
However, High Court judge, Justice Almarie Sinclair-Haynes, dismissed the Irish-based telecommunication company’s argument and ruled that the FTC had the jurisdiction to challenge the merger.
The ruling now clears the way for the FTC to proceed with its challenge of the March merger in the Supreme Court. However, Digicel says it intends to appeal the ruling.
Attorneys for Digicel say they are now awaiting the written judgement expected on Wednesday.
The FTC filed the claim last year after it completed its investigation into the Digicel/Claro merger, and concluded that it would not be beneficial to consumers.
However, Digicel sought to put a swift end to the challenge by filing a claim questioning the jurisdiction of the FTC in the matter and asked the court to throw out the FTC’s motion.
In its argument, Digicel contended that the FTC does not have the authority to examine the Digicel/Claro deal. It contends that the Office of Utilities Regulation, (OUR), is the regulatory body which oversees the telecommunication industry.
It said in the absence of the OUR inviting the FTC to examine the deal, the Commission’s challenge to the agreement should be dismissed. However, the FTC contends that it is entitled to examine the agreement as it contains provisions which lessen competition in the market.
In March last year, Digicel, announced that it had signed an agreement with América Móvil to acquire its Claro business in Jamaica, and to sell to América Móvil its businesses in Honduras and El Salvador.
Then prime minister Bruce Golding approved of the deal in August in his capacity as the minister with responsibility for telecommunications.