The path to requesting advisory opinions from the Competition Commission is likely to be reopened soon. The Commission suspended its advisory opinion service in January 2018, but an amendment to the Competition Amendment Act, 1998 (as amended) inserted a statutory obligation on the Commission to issue non-binding advisory opinions.
Consequently, on 23 March 2021, the Minister of Trade, Industry and Competition published an invitation to comment on the proposed regulations on non-binding advisory opinions. These draft regulations seek to clarify the intended legal status of, requirements and fees for non-binding advisory opinions going forward.
Two immediate observations on the draft regulations are that:
- the absence of the payment of a fee for certain categories of applicants could result in significant additional work for the Commission; and
- the requirement that the application include the name of the party, if strictly enforced, may result in certain parties choosing not to seek an advisory opinion for fear that it may limit their future options as a result of the disclosure of certain facts to the Commission, which is potentially contrary to the intended effect of the service.
Legal status of a non-binding advisory opinion
The draft regulations make it clear that any advisory opinion issued is intended to be “non-binding”, in other words, it will not constitute a decision or a finding of the Commission, and has no binding legal effect on the Commission, the Competition Tribunal, the Competition Appeal Court or the requesting party.
An advisory opinion is therefore simply aimed at assisting market participants with compliance with the Competition Act and is issued based on the information submitted to the Commission by the requesting party.
This does not diverge from the previous status of advisory opinions from the Commission, which have always been non-binding.
Requirements for a request
The draft regulations propose that requests for advisory opinions be in writing and must set out, inter alia, the name of the party, the market(s) in which it operates, the reason(s) for seeking an opinion, the nature of the legal advice sought, and all relevant facts, information and documents.
The Commission is also entitled to request additional facts, information and/or supporting documents in its consideration of the request.
The fee structure set out below is proposed, which will replace that currently set out in the Competition Commission Rules:
- Medium enterprises (as defined in the National Small Enterprise Act, 1996 (as amended) – ZAR20 000;
- Other market participants – ZAR50 000.
Notwithstanding the above, the following entities are exempt from paying the fee:
- Constitutional institutions
- National or provincial government departments
- Major public entities
- Micro enterprises (as defined in the National Small Enterprise Act)
- Non-profit organizations
- Other public entities
- Small enterprises (as defined in the National Small Enterprise Act)
Stakeholders and interested persons have until 22 April 2021 to submit any comments that they may have.
Originally Published by ENSafrica, March 2021
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