South Africa: A Citizen In The Global Village Of Competition Law

Last Updated: 25 June 2018
Article by Stephen Langbridge

The Competition Act ('Act') is first and foremost national in its focus. This is clear from its objects set out in the Act's Preamble and Purpose. Although the Act makes reference to international law obligations, participation in world markets and the role of foreign competition in the Republic, to look at the role of South Africa in competition law's global village, the key is not to be found in that language, but rather in the continuing development and application of South Africa's competition policy.

Now in its 19th year, the South African authorities (that includes the Competition Commission, Tribunal and Appeal Court) have enjoyed a leading status amongst developing competition law jurisdictions. The authorities have been recognized by peers in other jurisdictions, global bodies and practitioners for their pioneering role in development of a comprehensive body of competition law and policy, often punching above their weight category, particularly in relation to the role of competition law in socio- and development economics. Some have taken fright at the suggestions advanced which appear to promote the well-being of local businesses and the public interest above consumer welfare as the true-north of anti-trust.

This development of law and policy as well as the well-earned status does not come about simply by practicing in one's back garden. Far from that, South Africa has gone out in the international arena participating and joining allegiance with others, perhaps sometimes as a more junior partner and in other cases as a more experienced adopter of the competition global wave. There are MOU's enshrining cooperation with the EC, Brazil, Russia, India, China, Mauritius, Kenya and Namibia. In addition, South Africa has membership of the SADC, African Competition and BRICS fora. The authorities have also benefitted greatly from their active participation in ICN and UNCTAD networks and their staff continue to receive extensive training from leading world authorities and experts. The authorities learn from others and take an active lead in passing on their experience and challenging orthodox views.

While that may sound laudable, one might well ask what are the benefits and likely future implications within South Africa of the global participation? One aspect which stands out, is the acknowledgment by government in South Africa of the role of competition law as a critical policy tool, alongside other trade and industrial policies, in developing an inclusive economy poised for long term development and regional growth. International influence and participation can trickle down or pass through via competition policy.

Competition policy is as much about deciding when and how to intervene as when not to intervene and rather adopt a 'hands off' approach. Over-regulation is a tempting playpen in developing economies and it is questionable how much competition law should be used in regulation. Examples may be found in recent evaluation of pricing policies the steel industry, where it could be argued that cyclical markets and international competitive pressures can be more effectively guided by trade policies than by competition law interventions.

Improved skills and shared experience gained from co-operation with and training from other agencies should lead to better judgments and decisions in relation to such policy decisions.

Notably and in recognition of the influence of others on policy, the Commission has indicated in its most recent Annual Report that it may find greater affinity with newer agencies in emerging and developing economies which share similar challenges of high levels of concentration of ownership of capital and control over intellectual property in economies with persistent low economic growth, low levels of employment and poverty.

There are no doubt obvious benefits of certainty and consistency in the harmonization of the approach between international agencies to the analysis and complexities of global mergers and enforcement of anti-trust compliance. Finding common ground in approach to competition law economics may be one benefit, but there is also clear and possibly greater profit and utility in our authorities' interactions at multi-national and regional levels in challenging the role of competition law and its potential as agents for change in a developing economy. This evaluation of policy and outcomes is the arena of policy students and researchers both within and outside the authorities who can carry out impact studies and make proposals for change.

Proposed changes from these studies and interactions have found their way into the draft Competition Amendment Bill in South Africa ('Amendment Bill'). The amendments propose to redress two main features in the economy: excessive concentrations of ownership and control and the need to open up ownership and opportunity for a greater number of South Africans, but at the same time recognizing that economies of scale in some markets are necessarily efficient and thus certain interventions are unlikely to be beneficial there.

The proposals include enhancing the ability of the authority to investigate the impact of mergers upon small business and historically disadvantaged persons. Perhaps most significant are the proposals to expand and strengthen the provisions of the Commission relating to market inquiries to effectively investigate and address anti-competitive market features and conduct which prevents, restricts or distorts competition within that market. In making its decision to investigate, the Commission must have regard to the impact of any adverse effect on competition on small businesses, or firms controlled or owned by historically disadvantaged persons. Its powers following investigation are proposed to be significant.

Responses to and criticism of the proposals in the Amendment Bill have been received from a wide range of quarters, both local and international and will be evaluated by government. One aspect which is clear to any observer of the consultative process being followed by the lawmakers is that there will be change to the existing regime to deal with the identified objectives.

Aside from the likely new focus in the Amendment Bill on concentration of ownership in a developing national economy, South Africa has been at the forefront of elevating the evaluation of the socio-economic aspects of competition law, the so-called public interest factors, including the evaluation of the impact of transactions on employment in merger investigation and approvals for nearly two decades. Unlike the position in most other jurisdictions, a merger which does not substantially lessen or prevent competition may nonetheless be blocked in South Africa if the transaction leads to a substantial net-negative impact upon the public interest factors.

A difference in approach between authorities to the role of the public interest in merger review is not at the expense of other forms of co-operation and common approach to multi-national transactions by the Commission. These may involve a common view on market definition and newer concerns such as the impact of innovation in competitive markets. The Commission keeps close contact and exchanges views with the principal jurisdictions where global mergers are investigated. There are several recent examples where the Commission has stayed close to the approvals and conditions imposed in other jurisdictions, while seeking to add a distinctive national flavour as the facts, and especially the public interest, may require. These include the Bayer Monsanto, Dow DuPont and AB Inbev matters.

Likely implications for any significant global transaction requiring South African merger approval are firstly that parties will have to take into account not only the global timetable for clearance, apart from the local timetable. In addition, there is more likely than not to be an adoption of a co-ordinated approach to merger approval and any conditions or remedies which may apply, subject to any adaptation for national factors, including the public interest as may be enhanced under the Amendment Act.

We should also recognise the global co-operation and participation by the South African agency with other agencies may enable enforcement against anti-competitive conduct in global cartels. Witness here the investigations carried out in the freight shipping, foreign exchange and motor car parts matters as more recent examples. This is an obvious benefit to the national agency, saving capacity and time in identification of risk, investigation and prosecution of offenders. But to end on a cautionary note, local authorities should beware of the seemingly attractive option of transplanting the views and findings of other authorities into the South African context. Peculiar facts specific to South African firms, markets and regulations, as well as differences in the casting and application of relevant law create a danger of wasted resources through attempts to trying to apply another country's evidence and findings in South Africa.

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 Mondaq.com.

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

Authors
 
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
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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