The Rise and Fall of the Channel Islands Competition and Regulatory Authorities

Dr. Rob van der Laan, 10 May 2020 (reprinted of the article published on LinkedIn)

Introduction 
CICRA (the Channel Islands Competition and Regulatory Authorities) comprises the Jersey Competition Regulatory Authority (JCRA) and the Guernsey Competition and Regulatory Authority (GCRA). CICRA was created in 2010 as an administrative arrangement between the JCRA and the GCRA to share costs and expertise to work more efficiently across the Island. In June 2012, the effective merger of the competition and regulatory authorities in Jersey and Guernsey was completed.

On 22 April 2020, CICRA announced its end: “CICRA will revert to being separate authorities from July 2020. A decision to withdraw from the CICRA model of a pan island body has been made by the Jersey Minister for Economic Development, Tourism, Sport & Culture and the Guernsey Committee for Economic Development has accepted that decision.”[1]

According to the States of Jersey website[2], CICRA will “de-merge” from 1 July 2020 to better address the different competition issues faced in Jersey and Guernsey. According to this message, the differences in political and legal systems, priorities and political cycles between Jersey and Guernsey mean that both islands have varied scope for competition and economic regulation. The Jersey Minister for Economic Development, Tourism Sport and Culture, Senator Farnham, has set the new direction for the JCRA to make competition work as well as it possibly can in the interests of Jersey consumers and businesses. The message concludes that unwinding CICRA will enhance the ability of the JCRA to be responsive, adaptable and in tune with the needs of consumers and businesses and is in the best interests of Jersey’s economy. 

It appears that breaking up CICRA was very much a Jersey initiative. A statement by the President of the Guernsey Committee for Economic Development of 22 April 2020 informs that “on the 17th February I received a telephone call from Senator Lyndon Farnham. During the call Senator Farnham advised me of Jersey's intention to terminate the pan-island sharing of cost, expertise and administration support under the CICRA joint operating model and revert back to separate insular competition and regulatory authorities in Jersey and Guernsey. This decision was confirmed in a letter dated 3rd March from Senator Farnham. (..) it would be fair to say that Jersey's request came as surprise (..).”[3]

Whereas the reasons for the break-up of CICRA are not fully understood, there are some aspects that may have affected this course of action. I will briefly discuss some recent grounds for disaffection with CICRA in relation to its effectives and the financial benefits of the creation of CICRA for Jersey.

Effectiveness of CICRA
CICRA over the past few years has come under various strands of critique. On 6 January 2018, the Jersey Royal Court issued a judgment overturning the JCRA’s decision that ATF Fuels (ATF) infringed the Competition (Jersey) Law 2005 by refusing to allow Aviation Beauport to purchase fuel from ATF for the purpose of supplying their customers at Jersey airport.[4] The judgement resulted in a review of the CICRA decision and context. The local newspaper reported in early 2018 that there was the threat of a vote of no confidence over the board of the JCRA from Senator Philip Ozouf – who was the politician responsible for setting up the JCRA.[5] At the end of 2018, CICRA reported to be very pleased with the outcome of the review of the circumstances around the JCRA’s decision on ATF.

More recently, doubt has been shed on the effectiveness of CICRA on the basis of inflation figures for Jersey. According to a report published by the Jersey Inflation Strategy Group, there is a significant body of research from around the globe that shows that more competitive markets result in lower prices and better outcomes for consumers.[6] Jersey’s competition law was introduced in 2005. This coincided with the end of a sustained period in which Jersey’s inflation rate was considerably higher than the UK’s. However, the inflation rate peaked at 4.2% in mid-2018, and at times has been double the equivalent rate in the UK in the past few years. One of the recommendation of the report was that “the Government will work with the JCRA to ensure competition policy is directed at those sectors with potentially significant impacts on the living standards of households and the competitiveness of businesses”. This may indicate some dissatisfaction with the JCRA’s focus.

Jersey’s financial benefits of CICRA
In June 2012, the effective merger of the competition and regulatory authorities in Jersey and Guernsey was completed. The financial burdens for the Jersey taxpayer however appear to have very much stayed the same. For example, the average annual Jersey grant to the JCRA funding was about £402k over the six-year pre-CICRA period 2006-2011 and about £371k over the six-year CICRA period 2013-2018.[7] CICRA thus resulted in a small average annual reduction of the contribution of £31k for direct expenditure on the JCRA.

However, this small saving came at the price of a presumed need for increased coordination between the jurisdictions that is not reflected in the CICRA annual report. Hence, there is no convincing evidence that CICRA resulted in a net cost reduction for Jersey. The fact that the Jersey grant to the CICRA for competition law related work was double the Guernsey grant probably also did not help to rally or maintain support for CICRA in Jersey.

In addition, the efficiency of competition law enforcement may have been reduced. When CICRA was created, various costs increased such as the remuneration of the top positions. For example, according the CICRA’s 2013 Annual report, in recognition of the additional responsibilities, on the formation of the joint board in August 2012, the Chairman’s and member’s fees were increased by 25%. On the other hand, the total number of case officers working for the JCRA and GCRA (and its predecessor OUR) have gone down since the creation of CICRA. This appears to have been reflected in the output of the JCRA: The average length of JCRA-only merger decisions reduced from 7,7 to 5,9 pages (-23%) and the average number of days for JCRA merger decision increased from 43 to 54 calendar days (+26%) if we compare the same six-year periods. If we take the length of a decision as an indication of explanation of application of the rules, then the quality of the service provided to merging companies was reduced. The overall income on merger fees paid by companies over these six years periods increased from £409k to £475k (+16%) even though the number of JCRA-only merger decisions over the respective six-year periods dropped from 58 to 47 (-19%).

Practical consequences for future mergers
The practical consequences for parties that need to apply for merger approval in the Channel Islands are still unknown but do at first sight appear to be limited. The merger thresholds for the JCRA and the GCRA were and remain distinct. There only have been six pan-Channel Island merger applications, i.e. less than one each year of CICRAs existence. The end to the option of making a joint JCRA-GCRA merger application will therefore hardly be missed. If the JCRA manages to return to the set-up and productivity of the pre-CICRA period, companies can look forward to longer merger decisions that provide more clarification and shorter decision periods.
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Channel Islands'

competition law

I worked almost 15 (fifteen) years at three different national competition authoritiies (NCAs). This includes the NCA of Jersey, a small island in Europe. 


I had the privilege of working at the Jersey national competition authority during its formative years 2006-2011. My main responsibilities at the Jersey Competition and Regulatory Authority included:

• Providing economic and legal services in relation to mergers and acquisitions requiring JCRA approval. This comprised internal and external advice on merger thresholds, the economic assessment of the effects on competition resulting from a proposed merger, coordination with competition authorities in other jurisdictions, drafting of JCRA decisions and assessing legal privilege and confidentiality claims.
• Investigation of alleged infringements of the merger filing requirements, alleged abuses of a dominant position in trade and alleged agreements that infringe competition law.
• Legal advice on and economic assessment of applications for exemption.
• Managing (junior) case officers.
• Outreach activities including a series of seminars aimed at local law firms.
• Representing the JCRA in the International Competition Network (“ICN”) including the merger working group, the cartel working group and the dominance working group.
• Representing the JCRA at ICN workshops and conferences.
• Review of Jersey competition legislation and internal JCRA procedures.
• Managing price regulation of the incumbent postal supplier (10/2006 – 10/2007).
• Responsible for JCRA organisational issues such as the design and implementation of a filing system and investigation procedures.


I kept an eye on developments in the Channel Islands during the following decade: I reported on Channel Islands’ merger control procedures in the “Getting the Deal Through” Merger Control publications issues 2015 (pp.91-91) and 2016 (pp.85-91) and in the “International Comparative Legal Guide to” series on Merger Control in 2017 (p.214-219), 2018 (p.185-190) and 2019 (p.227-232). In January 2020, OmniCLES published a 60-page study on CI merger control to help lawyers determine whether there is a need to notify the Jersey and Guernsey competition authorities. The study includes a list of all merger decisions by the Channel Islands’ competition authorities with reference to the sector in which the Parties were active to allow for a quick identification of potentially relevant precedent. The study also includes other potentially useful information for future merger notifications, such as the timing of Jersey and Guernsey applications versus the associated EC notification in previous cases. I also wrote in total 23 (twenty three) reports and articles on competition law in the Channel Islands during the period 2012-2021 as the country reporter for the European Competition Law Review:

  1. Report on an investigation in the telecoms section, ECLR issue 42 (2021), N118-119. 
  2. Report on the first JCRA merger decisions since the break-up of the CICRA, ECLR issue 42 (2021), N50-51.
  3. Report on first GCRA decision since the end of CICRA, ECLR issue 41 (2020), N-123
  4. Report on the end of CICRA, ECLR issue 41 (2020), N65-66
  5. Airline decision in the Channel Islands, ECLR Issue 4 (2020), pp.210-211.
  6. Channel Islands Merger Control 2020, 10 January 2020, OmniCLES
  7. The public interest test in Guernsey merger control, ECLR issue 11 (2019), pp.533-537.
  8. The future of enforcement of the prohibition of the abuse of a dominant position in Jersey, ECLR issue 7 (2018), pp.302-305.
  9. Channel Islands competition law enforcement in 2017: Merger Control only, ECLR issue 5 (2018), pp. 228-230.
  10. Channel Islands competition law enforcement: a new direction?, ECLR issue 6 (2017), pp. 295-296.
  11. Report on proposed changes to the merger control regime, ECLR Issue 1 (2017), N-1-3
  12. Channel Island competition law enforcement 2015: Getting ready for a new course, ECLR issue 5 (2016), pp.176-178
  13. Report on an abuse of dominance decision in the aviation sector, ELCR issue 7 (2016), N-89
  14. Report on the year 2014 for competition law enforcement in Jersey and Guernsey, ECLR issue 4 (2015), N-29-31
  15. Report on the completion of market studies on the retail supply of groceries in the Channel Islands and on the supply of cigarettes and hand-rolling tobacco in Jersey. ECLR issue 9 (2014), N-75-76
  16. Report on the first year of merger control in Guernsey, ECLR issue 12 (2013),N-155-157
  17. Report on the first merger decision adopted under the new Guernsey merger control regime, ECLR issue 7 (2013), N-103-104
  18. Twins separated by birth: A few striking differences between the competition legislation applicable in the Channel Islands, ECLR issue 6 (2013), pp.326-331.
  19. Report on a consultation document on the future of postal regulation in Jersey and Guernsey, ECLR issue 6 (2013), N-87
  20. Report on the announcement of review of the costs of groceries in the Channel Islands, ECLR issue 6 (2013), N-86
  21. Report on Guernsey competition law and a look at some of the merger decisions adopted by the CICRA during the past six months, ECLR issue 3 (2013), N-39-40
  22. About Dogs and Barking: Jersey Competition Regulatory Authority Decision C793/11 Jersey Telecom Limited, ECLR issue 1 (2013), pp.17-24.
  23. Report on the introduction of merger control and legislation concerning the abuse of a dominant position in Guernsey, ECLR issue 12 (2012), N-184-185