SACC’s take on its #DigitalMarkets oversight & regulation

The South African Competition Commission recently contributed the following summary of its activities regarding the ‘hot topic’ of so-called Digital Markets and antitrust law to the “Compendium” (not AAT’s, the actual government enforcers’ compendium document resulting from the multilateral G7 meeting organized by the Bundeskartellamt in Germany).


Whether and how you have sought to use enforcement or non-enforcement tools, law
enforcement or regulatory action to address such issues. You may wish to highlight any
particularly relevant cases.

Recent cases
The Competition Commission of South Africa (CCSA) uses various competition enforcement tools to resolve concerns in digital markets, including unilateral conduct enforcement, merger regulation, market inquiries and advocacy. In November 2021, the CCSA referred an abuse of dominance case against Facebook Inc. (now Meta Platforms Inc) to the Competition Tribunal (Tribunal), for adjudication. The CCSA’s investigation found that Facebook enforced unduly restrictive access terms and conditions to its WhatsApp platform, against GovChat. This was to remove GovChat’s threat to Facebook’s own social networking position and WhatsApp’s monetisation strategies.


GovChat is a start-up online platform through which the South Africa government communicates with its citizens through mass push notifications on the WhatsApp platform. The GovChat platform also allows citizens to access information or services pertaining to various government services or programmes such as social grants, COVID19 services or to respond to surveys / polls to rate government services / performance. Thus, GovChat plays a very important role in the lives of South African citizens and is an important interface between the government and citizens. The CCSA found that Facebook’s conducts likely contravenes the following abuse of dominance provisions contained in section 8(1) of the Competition Act No. 89 of 1998 (as amended) –


a. refusal to give a competitor access to an essential facility when economically feasible to do so (section 8(1)(b)).
b. engaging in exclusionary conduct whose anticompetitive effect is not outweighed by any efficiencies or technological gains (section 8(c)).
c. refusal to supply scarce goods or services to a competitor or customer when economically feasible to do so (section 8(1)(d)(ii)).
At the time of writing, the Tribunal had not yet allocated a hearing date for this matter.

Market inquiries
In May 2021, the CCSA launched its online intermediation platforms market inquiry (the “Inquiry”). The Inquiry is focused on digital platforms in the areas of e-Commerce marketplaces, online classifieds, software application stores, travel and accommodation aggregators, and food delivery services platforms. The inquiry has focused on three areas of competition and public interest, namely (a) market features that may hinder competition amongst the platforms themselves; (b) market features that may give rise to discriminatory or exploitative treatment of business users; and (c) market features that may negatively impact the ability of SMEs and/or historically disadvantaged firms to participate in the economy.


The Inquiry released its provisional report in July 2022 and aims to conclude its work by the end of 2022. Amongst others, the Inquiry has provisionally found that Google Search plays an important role in directing consumers to the different platforms, and in this way shapes platform competition. The prevalence of paid search at the top of the search results page without adequate identifiers as advertising raises platform customer acquisition costs and favours large, often global, platforms. Preferential placement of their own specialist search units also distorts competition in Google’s favour. The Inquiry provisionally recommends that paid results are prominently labelled as advertising with borders and shading to be clearer to consumers and that the top of the page is reserved for organic, or natural, search results based on relevance only, uninfluenced by payments. The Inquiry further provisionally recommends that Google allows competitors to compete for prominence in a search by having their own specialist units and with no guaranteed positions for Google specialist units. The Inquiry is also exploring whether the default position of Google Search on mobile devices should end in South Africa. In terms of competition amongst platforms, the Inquiry makes the following provisional findings and recommendations, amongst others:


a. In software application stores, there is no effective competition for the fees charged to app developers with in-app payments, resulting in high fees and app prices. The Inquiry’s provisional recommendation is that apps should be able to steer consumers to external web-based payment options, or alternatively a maximum cap is placed on application store commission fees.
b. Price parity clauses, evident in travel & accommodation, e-commerce and food delivery, hinder competition and create dependency, and the Inquiry therefore recommends their removal. Wide price parity clauses prevent businesses offering
lower prices on other platforms and narrow parity prevents businesses from offering lower prices on their own direct online channel.
c. In property classifieds and food delivery, new entrants and local delivery platforms face challenges signing up large national businesses, undermining their ability to compete. The Inquiry provisionally finds in property classifieds this is a result of the investment and support of large estate agencies in Private Property and recommends the divesture of their stake. Facilitating the interoperability of listings on the leading platforms is a further recommendation to support entrants. In food delivery, national restaurant chains often prevent franchisees listing on local delivery platforms and the Inquiry recommends this practice ceases along with any incentives provided by national delivery platforms to steer volumes their way.
d. In food delivery, the Inquiry also finds that the business model of substantial eater promotions alongside high restaurant commission fees can result in large surcharges on menu items which is not transparent to consumers and distorts competition with local delivery options. The Inquiry provisionally recommends greater transparency on either the menu surcharge or the share taken by the delivery platforms.
In terms of competition amongst businesses on the platforms and consumer choice, the Inquiry makes the following provisional findings and recommendations, amongst others:

a. Across all platforms there is a tendency to sell top ranking search positions to businesses which are not the most relevant to the consumer and constitute a form of advertising that is not transparent. This impacts on consumer choice and competition, especially for SMEs that cannot spend as much as large businesses. The Inquiry recommends that advertising is clearly displayed as such and that the top results are reserved for organic (or natural) search results.
b. The Inquiry provisionally finds that the extreme levels of fee discrimination against SMEs in online classifieds, food delivery and to a lesser extent travel & accommodation, hinders their participation and has no coherent justification. The Inquiry provisionally recommends that a maximum cap is placed on the fee differentials between large and small businesses, potentially at 10-15%. In food delivery it is recommended that more equitable treatment also occurs in terms of marketing commitments made in exchange for lower commission fees.
c. In e-commerce, the Inquiry provisionally finds that conflicts of interest arise in operating a marketplace for third party sellers and selling one’s own retail products. This may result in self-preferencing conduct such as product gating, retail buyers given access to seller data to target successful products, preferential display ads and promotions. The lack of a speedy resolution process also adds to the costs borne by sellers. The Inquiry provisionally recommends an internal structural separation of retail from the marketplace to implement equitable and competitively neutral processes.
d. In software application stores, the Inquiry provisionally finds that South African applications (“Apps”) face challenges to their
larger global App development companies. The Inquiry provisionally recommends that App stores provide country-specific curation of App recommendations and provide free promotional credits to South African App developers to enhance
their visibility.

Regarding the participation by historically disadvantaged persons (HDPs), the Inquiry has provisionally found that the digital economy is far less inclusive to HDPs than many traditional industries. In addition, there are considerably more challenges faced by HDPs, especially as regards funding and support. These are as follows:
a. For HDP digital entrepreneurs, general wealth inequality presents a hurdle to seed funding from close associates, and the venture capital industry offers little at this stage. Beyond seed funding, venture capital funds only seek out HDP entrepreneurs where those funds have an express mandate to that effect. Such mandates are rare beyond the SA SME Fund (a joint government and CEO initiative). The Inquiry provisionally recommends specific commitments on HDP mandates from private investors and for government to channel funds for HDP digital entrepreneurs through mandates to the venture capital sector along with requirements for transformation of the sector.
b. A lack of assets and funding hinder HDP business’ ability to onboard and exploit the opportunities provided by digital platforms.
recommendation is that all leading platforms provide HDP businesses with personalised onboarding, a waiver on onboarding costs and fees, free promotional credits, fees that are no higher than the best placed, and the opportunity for consumers to discover HDP businesses on the platform.

Advocacy interventions

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The CCSA has continued its work with the Intergovernmental Fintech Working Group (“IFWG”), which includes financial services regulators as well as the information regulator. The IFWG has produced several position papers. These include Regulating Open Finance Consultation and Research Paper, FinTech platform activity in South Africa and its regulatory implications; and the position paper on crypto assets. These papers seek to understand the growing role of FinTech’s and innovation in the South African financial sector and explore how regulators can more proactively assess emerging risks and opportunities in the market. The next steps for the IFWG include dealing with customer data ownership and data standards and engaging with the information regulator, exposition of potential competition aspects related to open finance and how to mitigate anti competition behaviours. This showcases that the regulation of digital markets requires a multidisciplinary approach.


Any steps your agency has taken to strengthen its institutional capabilities to better equip it to deal with digital competition issues (for example, by forming a special unit, recruiting more data specialists, building new investigative tools, or gathering new/different evidence).

The CCSA has prioritised strengthening its institutional capacity in digital markets by targeting the training of investigators and economists in international courses and conferences to upgrade skills. However, the CCSA has used an active enforcement approach as the prime vehicle for deepening its understanding of these markets and to upgrade toolkits at the same time. The CCSA had initiated a project to use digital tools in the detection and investigation of collusion and assist generally on digital market cases. The CCSA has partnered with academic institutions to bring in their artificial intelligence expertise rather than seeking to hire and build internal capacity.

Following engagements with national and provincial governments to understand the extent and format of tender information, the Commission has begun a process of designing algorithmic programmes to detect collusion. This has been greatly aided by engagements with other competition agencies globally to discuss their experience as to what has worked and what has not. Similarly, for data specialists the CCSA has not sought to hire in those skills yet but rather to put together a panel of local experts that may be drawn on in enforcement or research. This approach was adopted as the best means to establish what the use case is for such skills, what specific skills are most valuable and the frequency of data specialist requirements. It is only if there is an ongoing demand in investigation across different enforcement areas and the ability to sustainable source the right skillsets that the CCSA will invest in hiring. The panel approach is also a means to interest data scientists in competition law enforcement and potentially establish career paths in this area. The CCSA together with the competition authorities of Egypt, Kenya, Nigeria and Mauritius, launched a digital markets enforcement initiative, given the greater shared challenges that digital markets pose for African countries. The aforementioned jurisdictions recognize that these challenges necessitate closer co-operation in order to share knowledge, develop effective strategies in digital markets and provide a stronger united front in dealing with global tech companies. The initiative has agreed to enhance strategic collaboration between the authorities by: (i) Scoping the conduct in digital markets, that has been the subject of investigation in other jurisdictions, on African consumers, businesses and economies with the purpose of fair regulation and enforcement in Africa (where applicable); (b) Researching the barriers to the emergence and expansion of African digital platforms and firms that may contribute to enhanced competition and inclusion in these markets for the benefit of African consumers and economies; (c) Cooperating in the assessment of global, continental, and regional mergers and acquisitions in digital markets, including harmonizing the notification framework; without prejudice to confidentiality commitments; (d) To share information in accordance with existing laws and applicable protocols; and (e) Sharing knowledge and build capacity to deal with digital markets. As part of this initiative, a series of technical workshops are forthcoming in 2022 to commence the collaborative baseline research mapping the digital landscape in all participating countries. This research will assist in obtaining a deeper understanding of the extent of consumer adoption and emerging market structure across the main types of digital markets in a country. Country-specific factors across Africa will impact on the extent of adoption by consumers and the emergence of domestic digital firms alongside global ones.

The CCSA has continued its engagement with the European Union (EU) to provide an opportunity for mutual learning using the SA/EU Dialogue Facility to host a series of workshops in partnership with the Directorate-General of Competition in the European Commission (DG Comp). The Dialogue has been extended and will examine issues of remedial action and data protection issues in a forthcoming workshop in 2022.

Whether, in your jurisdiction, (a) there have been any national reforms or new laws or regulations to better address digital competition issues, or (b) there are any significant proposed reforms pending before national legislative or regulatory bodies to better address digital competition issues.

The Inquiry has provisionally identified the potential need for proactive regulations or guidelines in respect of a few categories of circumstances in addition to the remedial action proposed in the provisional report. First, to bring potentially new leading platforms within the ambit of the current proposed remedies that would be imposed on existing leading platforms. Second, to proactively prevent certain conduct in intermediation platforms that are still maturing and where the conduct is likely to emerge in the future, but where there is clear potential for harm. The provisional proposal for regulations or guidelines would cover the following areas: a. A process for the identification and review of leading platform status b. Prohibition of the following conduct which has an adverse effect on intermediation platform competition (1) The use of price parity clauses (wide or narrow) or achievement of the same outcome through price quality factors in the SERP ranking algorithm; (2) Restrictions or frictions on multi-homing by business users including exclusivity arrangements, interoperability limitations and multi-year contracting; (3) Loyalty schemes that leverage the leading position of the platform, including visibility on the platform, to get business users to fund the scheme in whole or part. c. Prohibition of the following conduct which distorts competition amongst business users and/or results in their exploitation (1) Self-preferencing conduct of any sort; (2) Discrimination in listing, commission or promotional fees against SMEs/HDPs beyond a maximum cap; (3) A lack of adequate transparency over promoted listings as advertising; (4) The excessive sale of visibility through demoting organic results; and (5) Permitting algorithm biases that favour one group or another.

Any law enforcement, regulatory, or policy work by your agency concerning digital competition issues that has involved interaction with non-competition agencies or other laws or policy areas—such as privacy, consumer protection, or media sustainability—and how it was or is being handled.

Work in the fintech area is being done through the IFWG as outlined above. The CCSA has also put together a workshop with the Information Regulator of South Africa to discuss the interface of the two agencies around data privacy and data access for competition.

New Guidelines on the Exchange of Competitively Sensitive Information: 5 years with little change?

South African antitrust enforcer releases Amended Guidelines

By Joshua Eveleigh and Jemma Muller

On 12 September 2022, the Competition Commission of South Africa (“Commission”) published the Guidelines on the Exchange of Competitively Sensitive Information between Competitors under the Competition Act No. 89 of 1998 (the “Amended Guidelines”).

The original Guidelines were released for comment on 14 July 2017; they were created to provide guidance to industry stakeholders on when information exchanges between competitors should be considered harmful to competition (and thus fall foul of the Competition Act) and when they could be considered efficiency-enhancing. The creation of the Guidelines was a welcomed development, as it sought to provide industry stakeholders with insight as to how the Commission will assess whether a particular information exchange between competitors amounts to an antitrust violation, specifically a contravention of section 4 of the Competition Act.

The Amended Guidelines have now been published to address certain concerns raised by industry stakeholders in relation to their first iteration.

Notably, the originally published draft was reported to have received substantive comments from industry stakeholders relating to:

  1. what constitutes “commercially sensitive information”;
  2. the broadness of the Guidelines and lack of safe harbours within them;
  3. additional guidance as to the type of information competitors may lawfully share;
  4. industry-specific concerns; and
  5. public announcements.

Whilst acknowledging that the first iteration of the Guidelines was overly broad, the Commission states that this was an intentional decision.  Notably, the  Amended Guidelines remain just as broad, with the Commission rather opting to determine market-=specific safe harbours on a case-by-case basis.

Additionally, the Commission — now under the aegis of its new head, Doris Tshepe — has chosen to exclude from the Amended Guidelines any discussion of complex topics (such as price signalling, joint ventures, cross-directorship and shareholding, requests for quotations, market studies and benchmarking), instead deciding to rule on these issues on an ad hoc basis.

One substantive difference between the original and Amended Guidelines is the recent departure from the term “commercially sensitive information” to the newly adopted “competitively sensitive information”. In this respect, only information that is likely to have an effect on competition is prohibited in terms of the Guidelines, including: prices, customer lists, production costs, quantities, turnovers, sales, capacities, qualities, marketing plans, risks, investments, technologies, research and development programmes and their results.

While the narrowing of the scope of the amended Guidelines to “competitively sensitive information” and the decision to provide more focused guidance to industry associations ought to be a welcome change, it is likely that stakeholders will continue to perceive the Amended Guidelines as overly broad. In this regard, the Commission has seemingly ignored stakeholders’ previous comments to the original Guidelines, particularly in relation to a lack of safe harbours and industry-specific concerns. In this respect, the Amended Guidelines continue to have little impact on a firm’s ability to self-regulate its conduct in compliance with the Competition Act.

The Amended Guidelines are open for public comment until 04 November 2022 and can be accessed here.

FTC and USAID launch Africa-focussed digital competition initiative

USAID AND THE FEDERAL TRADE COMMISSION LAUNCH TRUST AND COMPETITION IN DIGITAL ECONOMIES INITIATIVE TO PROMOTE CONSUMER PROTECTION AND COMPETITION IN AFRICA’S DIGITAL ECONOMY

From the USAID/FTC Press Release dated Oct. 3, 2022:

USAID announced it will partner with the Federal Trade Commission (FTC) to launch a new initiative that will help protect consumers and increase competition in countries across Africa. This initiative will strengthen legal and regulatory frameworks and the institutional capacity to ensure that the benefits of the digital economy are not undermined by anti-competitive, unfair, or deceptive practices.

Robust frameworks for competition and consumer protection are indispensable foundations for partner countries seeking to promote inclusive economic growth, sustain economic competitiveness, promote gender equality and equity, support resilient democratic institutions, and strengthen the rule of law.  

Where these foundations are weak or non-existent, a country’s digital economy can become vulnerable to a range of risks and harms, including online fraud, scams, cyber attacks, data misuse, algorithmic bias, gender-based discrimination, corruption, and abuses of market power. While each of these are damaging in their own right, they can collectively contribute to deeper economic and governance concerns if left unchecked, including economic inequality, reduced local and foreign investment, reduced competitiveness, and weakened democratic institutions.  

The FTC will use its technical expertise, capacity-building programs, convening power, and relationships across the region to help authorities adopt and implement policy, legal, regulatory, and enforcement frameworks. The FTC will pursue these lines of engagement in concert with other U.S. Government counterparts, regional bodies on the African continent, and country-level counterpart authorities.

This initiative advances USAID priorities outlined in the USAID Digital Strategy to strengthen inclusive, open, and secure digital ecosystems in countries where USAID works. This initiative also aligns with and advances broader U.S. Government strategies, programs, and initiatives, including the Digital Connectivity and Cybersecurity Partnership (DCCP), Declaration for the Future of the InternetU.S. Strategy Toward Sub-Saharan Africa, and National Strategy on Gender Equity and Equality.  

The Trust and Competition in Digital Economies initiative is managed by USAID’s Innovation, Technology, and Research Hub and Center for Economics and Market Development.  

Further information on this initiative is available at this page.

Insurance companies raided by antitrust agency for alleged rate-setting collusion

PRICE-FIXING ALLEGATIONS LEAD TO THURSDAY’S DAWN RAIDS AT MAJOR SOUTH AFRICAN INSURANCE COMPANIES

By Michael-James Currie and Joshua Eveleigh

On 25 August 2022, the South African Competition Commission (“SACC”) announced that it was conducting so-called ‘dawn raids’ as part of an ongoing investigation into the industry, initiated in 2021. The raid took place simultaneously at 8 of South Africa’s major insurance firms: Discovery Limited; Hollard Insurance Group (Pty) Ltd; Momentum, a division of MNI Limited; Old Mutual Limited; BrightRock Life Limited; FMI, a division of Bidvest Life Limited; Professional Provident Society Limited, and South African National Life Assurance Company (Pty) Ltd (together, the “Insurance Firms”).

Notably, all of the Insurance Firms operate within the long-term insurance market.

The SACC’s decision to raid the premises of the Insurance Firms comes as the result of suspicions that the they had agreed to fix prices and/or trading terms in relation to certain investment products in contravention of section 4(1)(i) of the Competition Act, 89 of 1998 (“Competition Act”). Specifically, the SACC stated that it was in possession of information implicating the Insurance Firms in a scheme to share information regarding premium rates on risk-related products and fees for other investment products.

Says John Oxenham, a lawyer with Primerio Ltd., “[a]lthough dawn raids form part of the SACC’s ordinary evidence gathering procedure and is not indicative of the guilt of the Insurance Firms, the sharing of information would enable the coordination of increased prices.” Given that the clients of the Insurance Firms include both natural and juristic persons, the effect of the alleged conduct would have far-reaching and adverse effects on consumers, particularly where those consumers are sensitive to price increases.  Continues attorney Oxenham: “In this respect, it would be unsurprising if the SACC were to continue on its path of highlighting ‘public-interest‘ objectives by pursuing the investigation against the Insurance Firms and seeking the maximum penalty in respect of a contravention of section 4(1)(b)(i) – 10% of the Firm’s annual turnover in and from South Africa, for first-time offenders.”

Mr. Oxenham’s colleague, Andreas Stargard, notes the size of the RSA insurance market, and points out that the dawn raids occurred across the entire geography of the Republic of South Africa: “South Africa alone makes up over two-thirds of all African insurance premiums continent-wide! Today, the SACC’s spokesperson Sipho Ngwema confirmed today that 5 sites were raided in Gauteng, 2 in the Western Cape, and 1 in KwaZulu-Natal. This simultaneous and unannounced action is testament to the Commission’s bench strength, no doubt assisted by local provincial law-enforcement authorities, as is usually the case across in antitrust raids across the globe, where the actual evidence-gathering procedure is not only undertaken by government competition lawyers, but rather significantly assisted by local police, sheriffs, or similar enforcement agencies”. Finally, Stargard notes, “it remains to be seen whether this raid occurred as a result purely of the agency’s prior sector investigation, or whether there was (or were) any whistleblower(s) seeking leniency for their participation in the alleged cartel conduct, thus enabling the SACC to pursue a targeted and well-founded raid.”

Interestingly, a U.S. consulting firm, McKinsey, which has been involved with several South African government agencies and quasi-governmental entities, recently published an article entitled “Africa’s insurance market is set for takeoff“, noting that the “African insurance market’s immaturity points to significant scope for growth”:

Africa’s insurance industry is valued at about $68 billion in terms of GWP and is the eighth largest in the world—although this is not equally distributed across the continent. Markets are inconsistent in terms of size, mix, growth, and degree of consolidation, with 91 percent of premiums concentrated in just ten countries. South Africa, the largest and most established insurance market, accounts for 70 percent of total premiums. Outside of South Africa, we see six primary insurance regions in Africa. In the Southern Africa region, 54 percent of premiums are for life insurance. Nonlife insurance, however, plays a larger role in anglophone West Africa, North Africa, East Africa, and even more so in francophone Africa

It remains to be seen whether the effect of today’s raids in the RSA will hinder the predicted “takeoff” of the insurance industry, or assist in its growth within permissible, lawful boundaries.

Zimbabwean leader lauds antitrust efforts

Zimbabwean President Emmerson Mnangagwa recently exalted the benefits of antitrust law at a joint COMESA-CTC (Competition and Tariff Commission of Zimbabwe) conference for sitting judges, held in Victoria Falls. Below is an excerpt of his oral remarks, given at the opening of the event:

“Competition and consumer protection laws, are therefore, key enablers of free, open and liberalised trade between countries and foreign regional integration. Against this backdrop, these laws must continue to enhance consumer interests and the realisation of our country’s development aspirations as set out in the National Development Strategy and Vision 2030. To this end, under the radar are the cartels, and all those who collude in promoting unjustified price increases, illicit activities and currency manipulation for the purposes of realising super profits.

Andreas Stargard, a competition partner at Primerio Ltd., notes that President Mnangagwa was once a practicing attorney himself, prior to his political ascent within the ZANU-PF party, although the precise history of the president’s legal studies and degrees remains somewhat murky. “As a former legal practitioner himself, Mnangagwa knows that an educated judge is a better judge. Thus, his admonition to the members of the judiciary present at the conference (at whom the event was aimed in the first place) to better acquaint themselves with competition law & economics was timely and meaningful,” he said. Stargard adds: “There is hardly anything more frustrating than presenting an antitrust case — which is usually difficult in its own right — to an uninformed judicial decision-maker, who shows little understanding or interest in the subject-matter, or who dismisses economics as extraneous; you cannot practice competition law without an understanding of economics.”

The president concluded: “In our case as Zimbabwe, competition law and the attendant robust policy frameworks are important towards the speedy realisation of Vision 2030, of becoming a prosperous and empowered upper middle income economy. This aspiration will be attained through an effective empowered and agile judicial system, which strives for fairness and increased efficiencies across all the productive sectors of the economy. It is, therefore, most opportune that this workshop is taking place at the stage when our economy is transitioning from stabilisation to growth. To this end judicial staff must be kept updated and knowledgeable about activities taking place in industry and commerce. Undoubtedly, judges and other related stakeholders remain key to the interpretation of competition and consumer protection laws. The intricate nexus between the interpretation and enforcement of laws across sectors of the economy cannot be overemphasised. The judiciary should also address competition issues that arise in disputes before the judicial system. This is pertinent more so that competition law intersects with many fields hence training such as this one is an essential requirement in modern day competition law.”

Breaking: CCC withdraws its recent Merger Practice Note

An AAT-exclusive first report on this — somewhat stunning — development follows below. More details to be published once they become available in a new post…

On August 8th, 2022, the CCC officially announced the formal withdrawal of its Practice Note No. 1 of 2021, which had clarified what it meant for a party to “operate” in the COMESA common market. The announcement mentions that it will (soon? how soon?) be replaced with a revised Practice Note — a somewhat unusual step, in our view, as the revised document could have, or should have, been published simultaneously with the withdrawal of the old one. Otherwise, in the “interim of the void,” legal practitioners and commercial parties evaluating M&A ramifications in the COMESA region will be left with no additional guidance outside the bloc’s basic Competition Regulations and Rules.

Of note, “this clarifying policy document did not stem from the era of Dr. Mwemba’s predecessor (CCC 1.0 as we are wont to call it), but it was already released under Willard’s aegis as then-interim director of the agency,” observes Andreas Stargard, a competition lawyer at Primerio Ltd. He continues: “Therefore, we cannot ascribe this most recent abdication to a change in personnel or agency-leadership philosophy, but rather external factors, such as — perhaps — the apparently numerous inquiries the CCC still received even after implementation of the Note.”

To remind our readers, we had previously reported on AAT as to this (now rescinded) note as follows (Feb. 11, 2021):

The COMESA Competition Commission (“CCC”) issued new guidance today in relation to its application of previously ambiguous and potentially self-contradictory merger-notification rules under the supra-national COMESA regime. As Andreas Stargard, a competition practitioner with Primerio notes:

“This new Practice Note issued by Dr. Mwemba is an extremely welcome step in clarifying when to notify M&A deals to the COMESA authorities. Specifically, it clears up the confusion as to the meaning of the term ‘to operate’ within the Common Market.

Prior conflicts between the 3 operative documents (the ‘Rules’, ‘Guidelines’, and the ‘Regulations’) had become untenable for practitioners to continue without clear guidance from the CCC, which we have now received. I applaud the Commission for taking this important step in the right direction, aligning its merger procedure with the principles of established best-practice jurisdictions such as the European Union.”

New antitrust MoU between COMESA & EEC

No, that’s not the European Economic Community, but rather the slightly less well-known Eurasian Economic Commission (EEC), thank you for asking…

The Memorandum of Understanding, signed in late July in Geneva, is designed to allow the two agencies to “cooperate in addressing anti-competitive conduct in their respective regions, capacity building and research,” according to AAT’s old friend and CCC 2.0 executive, Dr. Willard Mwemba.

His EEC counterpart, Mr. Arman Shakkaliyev, Minister in charge of Competition & Antitrust Regulation, said that the future collaboration “opened up new opportunities” for closer interaction and the sharing of experiences and knowledge as to specific investigations, most notably, in addition to the two agencies planning more standard cooperative ventures such as joint conferences or training seminars.

Says Andreas Stargard, a competition lawyer at Primerio Ltd.:

“This latest MoU represents yet a further step in the clear and unmistakable direction of ever-closer cooperation between enforcement agencies on the African continent that we have seen for a few years now. The advice to be taken from this is fairly simple: Companies operating in more than one country in Africa should take note of this development, as their local ‘competition reputation‘ from one jurisdiction will doubtless precede them in the other, given the information-sharing between African watchdogs, which catches many corporates seemingly unawares…”

Tourvest wins on appeal in precedent-setting cartel case: you don’t become a ‘competitor’ solely by virtue of contracting

CAC ruled in favour of Tourvest nine years after allegedly collusive tender for retail space at Johannesburg airport took place

By Jemma Muller and Nicola Taljaard

In a recent judgment, the South African Competition Appeal Court (“CAC”) provided clarity on the characterization inquiry necessitated by section 4(1)(b) of the Competition Act 89 of 1998. The judgment particularly elucidated the way in which the requirement that the parties must be in an actual or potential horizontal relationship at the time that the offence in issue is committed, must be construed.

The CAC set aside and replaced the Competition Tribunal’s (“Tribunal”) decision wherein it found that Tourvest Holdings (Pty) Ltd (“Tourvest”) was guilty of collusive tendering or price fixing under section 4(1)(b) in relation to tenders issued by Airports Company South Africa (“ACSA”).

The CAC found that Tourvest and the Siyanisiza Trust (“Trust”) agreed to cooperate instead of competing on a tender issued by ACSA by concluding a Memorandum of Understanding (“MoU”) before submitting their separate bids in relation to tenders issued by ACSA. In terms of the MoU, Tourvest agreed to provide the Trust with the expertise, management infrastructure, technology and training that the Trust would require to bid.

Despite the historically vertical relationship between the parties, the Tribunal found that the parties had become actual competitors by submitting separate bids for the same tender (i.e., horizontality by bidding) and potential competitors under the MoU, and alternatively, that the parties became potential competitors by virtue of holding themselves out as competitors submitting bids against one another (i.e., by creating the illusion of competition).

Before scrutinizing the Tribunal’s specific findings in relation to horizontality, the CAC found that the Tribunal misdirected itself by embarking on a characterization inquiry which failed to recognize the character of the parties’ relationship absent the impugned agreement – which relationship was clearly vertical in nature. The CAC explained that, if absent the agreement the parties were not potential competitors, then the agreement could not have removed a potential competitor from the market and could also not have harmed competition, as there was none to start with. The CAC based its reasoning on the purpose of section 4(1)(b) of the Competition Act, which stated as being to penalize ‘conduct which is so egregious that no traditional defence is permitted’. Accordingly, its purpose is not to capture conduct which, correctly characterized, does not harm competition.

With regard to the Tribunal’s specific findings of horizontality, the CAC found that:

  • The submission of separate bids for the same tender could not in and of itself bring the impugned conduct within the ambit of section 4(1)(b);
  • The wording of section 4(1)(b) is clear in that it requires the parties to be in an actual or potential horizontal relationship. Section 4(1)(b) cannot be interpreted to infer strict liability on parties by virtue of them ‘pretending’ to be a competitor (i.e., horizontality by illusion). If parties are ‘ineligible’ to bid as competitors by virtue of their trading environment, they may not be construed as potential competitors. In casu, the Trust was not eligible to participate in the tender as it did not meet the tender criteria; and
  • It is illogical and contrary to the provisions of section 4(1)(b) to conclude that the parties could become competitors in the future by virtue of the tender’s enterprise development purpose. The potential to compete cannot be rationalized from the impugned agreement itself. Rather, it is the (horizontal-or-not) nature of the parties’ relationship at the time the offence in issue is committed, which must be assessed.

Moroccan telecom regulator fines dominant telco USD 1/4 billion

Morocco’s national telco regulator (the Agence Nationale de Réglementation des Télécommunications or ANRT) has concluded, after a years-long investigation started in 2017 and a prior fining decision was taken in 2020, that Maroc Telecom Group had abused its dominant market position in violation of Article 7 of Law No. 104-12.

Says Andreas Stargard, a competition-law attorney at Primerio Ltd., “it is somewhat rare to see non-specialist regulator investigate competition-law violations and impose antitrust fines — particularly, as here, 5-year-long investigations and such enormous fine amounts as those imposed on Maroc Télécom, which is said to have committed various acts in furtherance of its dominance,” including conduct aimed at delaying competitors’ access to local-loop unbundling and entry into broadband. Stargard notes that the total fine of MAD2.45 billion (approx. US$238 million, which includes the prior 2020 fine amount) is now due to be paid, barring a successful appeal by the operator within 30 days.

Competition Commission Releases Online Intermediation Platform Market Inquiry Provisional Summary Report

By Nicola Taljaard

On 13 July 2022, the South African Competition Commission (“Commission”) released a Provisional Summary Report (“Report”) on the Online Intermediation Platforms Market Inquiry (“OIPMI” or “Inquiry”) which was initiated on 19 May 2021. The Commission initiated the Inquiry following reason to believe that certain features of the online intermediation platforms market could be impeding, distorting or restricting competition.

The Commission placed specific emphasis on getting small and medium enterprises (“SMEs”) and historically disadvantaged persons (“HDPs”) to participate in the relevant markets, and premised the Inquiry on the following competition and public interest considerations in relation to market features:

  • Hampering competition between the actual platforms;
  • Hindering competition between business users or undermining consumer choice;
  • Giving rise to abusive treatment of business users; and
  • Which may have disadvantageous impacts on the ability of SMEs and/or HDPs to participate in the market.

The Commission further noted a lack of participation by HDPs as a common thread which prevails in the online intermediation platforms market, which seems to languish in an untransformed state relative to the broader South African economy.

The remedial action proposed in the Inquiry ranges in severity based on the impacts which the market features have on competition, particularly in relation to SMEs or HDPs. The leading platforms on which the remedial actions are proposed are the Apple App and Google Play stores, Takealot, Property 24 and Private Property, Autotrader and Cars.co.za, Booking.com and Airbnb, Mr. Delivery and UberEats, and Google. Although the Commission did not consider it necessary to enter a dominance inquiry, it did remark that these platforms show features of dominance when considering their positions in the respective markets.

In addition to the more general constructive proposals, the Commission also suggests provisional remedies which are more robust, including against Google, stating that it plays an integral role in how consumers interact with relevant platforms. In this regard the Commission intends to further its inquiry into the viability of keeping Google Search as the default search on mobile devices in South Africa.

The OIPMI came to the provisional conclusion that the digital economy is deficient in relation the country’s transformation goals and deviates significantly from the transformation trends of other traditional industries. The lack of transformation in most of the industries investigated as part of the intermediation platforms continues to display major barriers to entry for HDP entrepreneurs. This conclusion is particularly pertinent in light of the ever-widening digital divide.  

The Commission has made all of the documents and public submissions in relation to the Inquiry, as well as the Summary Report (which can be accessed here) available on its website. The public has six weeks within which to submit comments to the Summary Report, after which the Inquiry body has committed to consider the views and incorporate changes, where appropriate, to the final report and findings which will be released in November 2022.