On 25 November 2009, the Mauritian Competition Act will come
into full effect. An apparently enthusiastic and skilful
Competition Commission has been waiting in the wings since June
2009 to implement this important legislation and is rearing to go.
With powers to implement fines of up to ten percent of a
company's annual turnover, multiplied the number of years that
the restrictive agreement was in place (up to a maximum of five
years), companies will need to urgently pay attention to this
expansion in Mauritian law, or else soon realise the true meaning
of "ignorance of the law is no excuse".
The Act deals with both merger activity and restrictive
prohibited practices. A merger situation is described as the
combining, under common ownership and control, of two or more
entities of which at least one carries on its activities in
Mauritius or through a company incorporated in Mauritius. In terms
of prohibited practices, the guidelines issued by the Commission
stipulate that the authority is concerned with competition in local
markets and competition to supply those markets. Restrictive
practices relating to exports will not generally be regarded as a
concern. The implementation of this important piece of legislation
is therefore relevant to all parties involved with a company
registered or active in the popular Mauritius region, as well as
those entities who are entering into merger transactions with such
A merger situation is subject to scrutiny by the Commission
where the parties to the merger together supply or purchase more
than 30 percent of the goods or services in a relevant market.
Furthermore, the authority is empowered to investigate any merger
situation which it has reasonable grounds to believe has resulted
in a substantial lessening of competition within any market for
goods or services.
Unlike South Africa's Competition Act, the Mauritian
legislation does not contain any specific provisions which call for
the compulsory pre-notification of a merger. The closest
resemblance to such a requirement is that an enterprise may obtain
"guidance" from the Commission before proceeding with a
merger. The benefit of this is that merging parties do not have to
engage in the costly process of submitting a merger filing, and no
filing fee is required to accompany such a filing to the
competition authority. However, should a merger be found to be
problematic after it has been implemented, the cost of complying
with any remedies which may be imposed by the Commission
(divestiture of assets, behaviour modification, price control, or
informational remedies) could be substantial and it would therefore
be advisable to approach the Commission for guidance prior to
implementing a merger which may raise competition concerns.
The previous Chief Economist of the UK Commission, John Davies,
is the first Executive Director of the Mauritian Competition. The
Executive Director is empowered to enquire actively into merger
activity or potential restrictive business practices. The Executive
Director has the power to request specific information from any
enterprise, to invite parties to provide information on a specific
matter or business practice, to invite parties for an interview or
to request written explanations relating to specific conduct or
merger activity which is of concern to the authority.
Included in the Executive Director's arsenal of
investigative powers is the ability to obtain a warrant to enter
and search the premises and take possession of documents. This is
similar to the South African "dawn raid" procedure and
companies need to be aware of and prepared for the possible use of
such a legislative weapon.
The Act also provides for complaint procedures and any person
may call upon the Executive Director to conduct an investigation
into alleged anti-competitive conduct. The Director then has a
period of two years to deal with the complaint, whereafter he or
she must either refer the matter to the Commission, or issue a
notice of non-referral if no restrictive practice is found to
The manner in which Mauritius has undergone its process of
developing competition law is commendable. The Commission issued
comprehensive guidelines on a range of relevant sections in the new
legislation within six months of the body's formation and this
is indicative of the proficiency of this new agency.
It is now only a matter of time before similar competition law
agencies come to being in other African countries and companies can
no longer think that they have free reign to engage in
anti-competitive conduct on the continent. It is clear that the
need to be compliant with any applicable competition law is
becoming vital in order to avoid potentially costly fines and even
jail time in certain jurisdictions.
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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