Response to Consultation Paper

Response to the Consultation on the Proposed Competition Act 2026

Submitted by: Kensley A. McDowall, BA, LLB, LEC, TEP, CAMS, CFE, FICA

Date: 16 August 2026

To: Permanent Secretary Ministry of Home Affairs Government of Bermuda

Subject: Formal Response to the Consultation on the Proposed Competition Act 2026

I thank the Ministry of Home Affairs for inviting public comment on the proposed Competition Act 2026. I strongly support the Government’s commitment to establishing Bermuda’s first economy‑wide competition law, as foreshadowed in the 2024 and 2025 Throne Speeches.

The consultation document correctly identifies the consequences of Bermuda’s current regulatory gap:

“Grocery prices rose 38 percent in the decade to 2025… Two of our three major health insurers merged without any competitive review… Bermuda stands among the last developed jurisdictions without a general competition law.”

This submission endorses the proposed framework and expands upon it. It addresses additional structural risks that must be incorporated into the Act to ensure it is comprehensive, effective, and future‑proof.

I support the four pillars of the proposed Act:

1. Prohibition of anti‑competitive agreements
2. Prohibition of abuse of dominance
3. Merger control in essential sectors
4. Mandatory market studies

I also support transforming the Regulatory Authority into the Competition and Regulatory Authority (CRA).

However, to ensure the Act is fully effective, I recommend several additions and clarifications.

BELCO — Addressing the Legislated Monopoly

The consultation document notes:

“The licensed electricity utility retains a legislated monopoly… yet this oversight does not extend to other essential sectors.”

BELCO’s monopoly is one of the most consequential structural issues in Bermuda’s economy. The Competition Act must explicitly address BELCO’s market power.

Recommendations

1. Add electricity to the list of essential sectors.
2. Empower CRA to conduct a market study into electricity and grid access within 24 months.
3. Apply abuse‑of‑dominance prohibitions to BELCO, including:

• discriminatory interconnection practices,
• refusal to deal with solar installers,
• foreclosure of renewable competitors.

4. Allow CRA to impose behavioural remedies, including non‑discrimination rules and functional separation.
5. Require BELCO to submit an annual Competition Compliance Plan.

This ensures BELCO’s monopoly is regulated not only through tariffs but through competition conduct rules.

BF&M–Argus Consolidation — Insurers, Doctors, Pharmacies

The consultation document highlights:

“High-cost prescriptions representing 3 percent of scripts but 30 percent of spend are restricted to one pharmacy group.”

This consolidation includes:

• horizontal merger (insurers),
• vertical integration (medical practices),
• exclusive channelling (pharmacies).

Recommendations

1. Use the Act’s transitional review power to examine all insurer‑provider‑pharmacy integrations since 2020.
2. Empower CRA to impose behavioural remedies, including:

• prohibition on exclusive channelling,
• mandatory patient choice,
• fair reimbursement rules.

3. Require mandatory notification for any future acquisition of doctors, clinics, pharmacies, labs, or diagnostic centres.
4. Conduct the healthcare + pharmaceuticals market study within 6 months of commencement.

This ensures the consolidation does not entrench market power or restrict consumer access.

St. David’s Convenience Store/Pharmacy Conglomerate

A significant concern is that this project is being advanced before the Competition Act exists and before the CRA is established.

This creates:

• a regulatory vacuum,
• a policy inconsistency,
• and a structural conflict of interest within Government.

Recommendations

1. Government should support the project in principle but pause final approval until the CRA is operational.
2. Require the proponents to submit a Competition Impact Statement.
3. Issue a Ministerial Policy Directive requiring competitive impact assessment for all essential sector projects.
4. Ensure the project is subject to mandatory merger review once the Act is enacted.

This protects the integrity of the Competition Act and avoids public perception of preferential treatment.

International Business — Strengthening Territorial Scope

The consultation document states:

“A business carried on from Bermuda exclusively with persons outside Bermuda does not… fall within the framework.”

This must be reinforced to protect Bermuda’s reinsurance and international business sector.

Recommendations

1. Insert explicit statutory language confirming that only domestic supply triggers jurisdiction.
2. Insert a prudential non‑interference clause preventing CRA from assessing matters regulated by the BMA.
3. Require affirmative resolution of both Houses for any future expansion of scope.
4. Establish a CRA–BMA coordination protocol.

This ensures the Act protects domestic consumers without harming Bermuda’s global IB model.

Additional Enforcement Powers Needed

To make the Act fully effective, I recommend adding:

A. Structural Remedies

Allow CRA to impose functional separation and access obligations.

B. Expanded Interim Measures

Allow CRA to suspend exclusivity agreements and freeze harmful conduct.

C. Stronger Penalties

Increase maximum penalties to 10% of Bermuda turnover.

D. Criminal Cartel Offence

Commence criminal penalties immediately.

E. Market Surveillance

Require CRA to maintain price monitoring dashboards and annual competition reports.

Governance and Conflict‑of‑Interest Safeguards

Given the St. David’s situation, the Act should include:

1. Government Transaction Notification Government‑supported projects in essential sectors must be notified to CRA.
2. Cabinet Policy Coherence Clause Cabinet must consider CRA advice before approving essential sector projects.
3. Ministerial Recusal Rules Where a Minister is promoting a project in an essential sector, the Minister of Home Affairs must lead competition oversight.

Conclusion

The proposed Competition Act 2026 is a necessary and overdue reform. However, to be fully effective, it must:

• address BELCO’s monopoly,
• discipline insurer‑provider‑pharmacy consolidation,
• ensure the St. David’s project is reviewed,
• protect international business,
• strengthen enforcement powers,
• and include governance safeguards.

With these additions, the Act will be comprehensive, proportionate, and capable of delivering the fair, competitive markets Bermuda needs. Clear directives must be given to the AG’s Chambers so that appropriate wording is included in the Act to ensure that these subtle but essential elements are given clarity.

I thank the Ministry for the opportunity to contribute to this important reform and wish her every success in her efforts.