South Africa: The Commission's View On Public Interest

Last Updated: 10 June 2015
Article by Justin Balkin and Kirsty van den Bergh

Most Read Contributor in South Africa, September 2018

Public interest considerations in merger proceedings have become a focus area in recent years. In addition to assessing the competitive impact of a proposed transaction, the competition authorities are also mandated to consider its impact on (i) a particular industrial sector or region, (ii) employment, (iii) the ability of small businesses or those controlled or owned by historically disadvantaged persons to become competitive, and (iv) the ability of national industries to compete in international markets.

Whilst certain other international jurisdictions touch on similar public interest goals in their competition / antitrust legislation, South Africa is one of the few merger regimes where public interest considerations play such an important role.

In an effort to give parties guidance on the Competition Commission's approach to public interest in its investigation of mergers, and to indicate the information that the Commission would like parties to provide in their merger notifications, the Commission published public interest guidelines earlier this year.

In the guidelines, the Commission outlined a broad 5-step analysis which it will undertake in respect of all proposed transactions with a public interest dimension. Firstly, the Commission will determine the likely effect of the transaction on the public interest, followed by a determination as to whether or not that alleged effect is merger specific. Then, the authorities will assess whether this effect is substantial and, if so, whether the merging parties can justify the likely effect on the public interest. Lastly, any possible remedies to address the negative public interest effect will be evaluated.

To the extent that the effect of a proposed transaction on the public interest is found not to be merger-specific (i.e. there is not a sufficient causal nexus between the anticipated public interest harm and the transaction under consideration), the Commission's inquiry will stop here. Furthermore, if an effect is found to be merger-specific, but insubstantial, the public interest assessment will not continue further.

Ultimately, the Commission will weigh the results of its public interest inquiry against its assessment of the competition impact of a proposed transaction. Importantly, a transaction may be approved if its public interest benefit outweighs its anti-competitive effect or vice versa.

Notably, in accordance with the 5-step analysis discussed above, the guidelines also set out specific factors which the Commission will consider in respect of each of the listed public interest grounds.

Insofar as "employment" is concerned, the Commission will firstly assess the effect of the proposed transaction on employment generally. This analysis, done on a case-by-case basis, requires the merging parties to disclose all contemplated retrenchments (whether due to the merger or for operational reasons) having regard to the effect of these retrenchments on the employees of the merged entity.

Insofar as the type of information which the Commission requires to be submitted to it, the Commission has indicated that it will consider, inter alia, (i) the number of employees affected, (ii) their skill levels, (iii) the likelihood of those employees finding alternate employment, (iv) employment trends in the relevant sector, and (v) the nature of the primary acquiring firm's business (for example, whether it employs seasonal workers). All of these factors will be taken into account when determining the overall effect of the proposed transaction on the employees. According to the guidelines, this information must not be "arbitrary, random or a guess estimate".

The Commission will assess the whether the proposed transaction will have an impact on the number of jobs in existence pre- and post-merger, duplication of positions, cost-cutting measures, relocation of operational premises, the cancellation and / or implementation of supply / distribution agreements, and whether the retrenchments would have occurred absent the transaction.

Importantly, the Commission has confirmed that it will assess the merger-specificity of retrenchments only if parties to a transaction claim that these retrenchments are not related to the merger. Furthermore, to the extent that any retrenchments take place shortly before (or shortly after) a proposed transaction is notified, the Commission wishes to be made aware of this. In fact, the Guidelines set out that parties will be required to notify the Commission of any retrenchments which are considered from the date of initiation of merger discussions and for a period of one year after approval for a proposed transaction is received.

The guidelines do indicate, however, that the Commission will consider an effect on employment to be "substantial" only if a large number of unskilled / semi-skilled employees are retrenched who have no short-term prospects for re-employment. In this regard, to the extent that the competition authorities are of the view that a transaction does raise employment concerns, it may impose conditions which, inter alia, restrict the number of job losses, stagger the job losses over a period of time, place a moratorium on retrenchments, require funding for the re-skilling of affected employees, require career counselling to affected employees, require preferential re-employment terms for the affected employees, introduce a training layoff scheme and / or introduce employee shift rotations.

In addition to their analysis of the affected employees, the Commission's analysis will broadly include, if necessary, a determination of the effect of the proposed transaction on employment in a particular industry or region. No further guidance is provided as to when and under what circumstances such a secondary line of inquiry will be undertaken.

Insofar as the effect of a proposed transaction on a "particular industrial sector or region' is concerned, the guidelines indicate that the Commission will consider the relevant sub-sector and the likely impact of the proposed transaction of the value chain therein. Whilst not limited in this regard, the assessment will consider an evaluation of import substitution as well as domestic production.

As regards the "ability of small businesses, or firms controlled or owned by historically disadvantaged firms, to become competitive", the guidelines confirm that the Commission should consider, inter alia, whether the proposed transaction will affect the ability of SMEs and HDIs to compete by (i) raising existing barriers to entry, (ii) preventing access to key inputs, (iii) result in unfair pricing, (iv) denying access to suppliers, (v) preventing training, skills upliftment and development, and (vi) denying access to funding.

Insofar as the last public interest ground is concerned, namely the "ability of national industries to compete in international markets", the guidelines indicate that this is applicable only when merging parties are looking to justify an anti-competitive merger on public interest grounds. The onus is on the merging parties in this regard and the Commission will not automatically assess this ground unless requested to do so.

Whilst the aforementioned guidelines provide merging parties with insight into the Commission's position on issues of public interest, they do reflect only the Commission's view. They remain to be tested before the Competition Tribunal and the Competition Appeal Court. However, parties would do well to take cognisance of the guidelines when dealing with the Commission as this will no doubt determine the manner in which the Commission will consider these issues in its investigation of mergers notified to it.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions