South Africa: The New Memorandum Of Agreement Between Competition Commission And ICASA Explained

Last Updated: 6 September 2019
Article by Jac Marais, Nalo Gungubele and Mia de Jager

On 29 August 2019, at the 13th Annual Competition Law, Economics and Policy Conference a signing ceremony was held a new MoA between the Commission and the Independent Communications Authority of South Africa ("ICASA").

The Competition Act 89 of 1998, as amended, provides that where a sector regulator is empowered with jurisdiction in relation to prohibited practices and merger control, concurrent jurisdiction is established. The Commission can conclude a MoA with the sector regulatory authority in order to facilitate cooperation between the sector regulator and competition authorities where competition matters overlap with sector-specific regulatory responsibilities.

ICASA, the sector regulator for communications, is responsible for regulating and developing the telecommunications, broadcasting and postal industries in the public interest. It also issues licences to telecommunications and broadcasting service providers, hears and decides on disputes and complaints brought against licensees, and controls and manages the effective use of radio frequency spectrum. In carrying out its mandate, ICASA is required to promote competition in the ICT sector.

The new MoA replaces the MoA previously concluded between the two regulators in 2002 which was criticised for its failure to create a coherent regulatory framework in relation to merger appraisals, market inquiries and the regulators' respective roles. Some of the issues which arose as a result of the lack of certainty as to concurrent jurisdiction include:

  • Confusion in relation to the deliberation of competition concerns in mergers and acquisitions:

In Telkom SA Soc Limited v Mncube NO and Others,1 ICASA approved an application for the transfer of a spectrum license (a critical constraint in the telecommunications sector) from Neotel to Vodacom and deferred the consideration of competition concerns to the Commission. The court found that ICASA had a statutory obligation to promote competition and its failure to take the competition concerns into consideration was materially influenced by an error of law.

  • Forum shopping:

In Competition Commission of South Africa v Telkom SA LTD and Others,2 Telkom sought an order confirming that ICASA had exclusive jurisdiction in relation to allegations of anti-competitive conduct levelled against it. The court found that the Commission and ICASA share jurisdiction and that the competition authorities not only have the required jurisdiction but are also the appropriate authorities to deal with the complaint.

  • Duplication of market review efforts:

ICASA undertook an inquiry into mobile broadband services to determine whether there any segments of the value chain which are susceptible to regulation while the Data Market Inquiry was well underway.

The new MoA aims to:

  • Facilitate effective coordination for market definition for electronic communications, broadcasting and postal services;
  • Define collaborative roles for each institution in areas of co-jurisdiction; and
  • Facilitate information sharing and research between the regulators on matters of mutual interest.

The revised MoA introduces co-operation principles which the Commission's primary authority in respect of the review of mergers as well as the detection and investigation of prohibited practices. The MoA further establishes ICASA's primary authority to set conditions within the sector as required, and to promote competition in terms of its governing legislation (e.g. the ICASA Act,2000, the Electronic Communication Act, 2005 and the Postal Services Act, 1998). It further expressly provides for the jurisdiction of the Competition Tribunal in respect complaints where the Commission is the recipient authority and designates officials within the respective authorities as contact persons for purposes of the agreement.

The MoA may go some way towards leveraging the complementary functions between the two authorities (i.e. the specialist knowledge of the sector regulator on the one hand and the competition expertise of the competition authority on the other) and ensuring optimal regulatory outcomes.

We invite you to contact our Competition Law and Telecommunications Team if you have any questions in relation to the MoU or any

Footnotes

1 Telkom SA Soc Limited v Mncube NO and Others Mobile Telephone Networks (Pty) Ltd v Pillay NO and Others; Cell C

(Pty) Limited v The Chairperson of ICASA and Others; Dimension Data Middle East & Africa (Pty) Ltd t.a Internet Solutions v ICASA and Others (55311/2015; 77029/2015; 82287/2015) [2016] ZAGPPHC 93

2 Competition Commission of South Africa v Telkom SA LTD and Others (623/2009) [2009] ZASCA 155

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.

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