AfCFTA, Big Picture, COMESA, COVID-19, East Africa, event, Ghana, Kenya, Nigeria

Podcast explores latest developments across Africa

The latest episode #122 of Sheppard Mullin’s popular NOTA BENE podcast features Primerio’s Andreas Stargard, exploring “Africa Q2 Check In: Economic Growth and Relevance.”

Africa continues to strive for economic growth through various trade partnerships and foreign investments, but long-standing challenges remain an impediment in certain respects. Is Twitter’s decision to open an African base in #Ghana any indication of the continent’s economic potential? We’re joined by #Africa competition and markets expert, Andreas Stargard, a co-founding senior member of Primerio Ltd., as he shares insights on Africa’s economic outlook in Q2 of 2021.

You can listen to it for free on all major ‘podcatchers,’ including here:

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Big Picture, BRICS, dominance, mergers, South Africa, Telecoms

Antitrust and Big Tech: The SACC enters the ring.

By Gina Lodolo

Enforcement agencies, lawyers and experts, globally, have grappled with the regulation of the big tech in terms of ‘conventional’ anti-trust laws and whether legislative amendments are required to overcome some of the perceived difficulties in the regulation of big-tech. Leading jurisdictions such as Germany and the EU have introduced significant legislative amendments, aimed at the regulation of big tech.  The South African Competition Commission (“SACC”), seems to be going in the direction of big-tech regulation through its own proposed legislative amendments. On the 7th of September 2020, the SACC published a report for public comment on its findings regarding “Competition in the Digital Economy” (the “Report”). In line with international trends, the SACC places particular focus on merger control as a tool to prevent against concerns of abuse of dominance by large tech companies.

The SACC has found that “of the 87 mergers in digital markets notified between 2011 and 2018, 82 were approved without conditions and the remaining 5 were approved with public interest conditions” (this includes only the mergers which have met the notification thresholds).

The larger concern in the digital market, according to the SACC’s Report, is that mergers in the digital market often fly under the radar due to what is termed “creeping mergers”, a process whereby a number of small start-ups are acquired which, individually, do not meet the target thresholds for purposes of triggering a merger filing in South Africa, however, collectively result in a combined entity of significant size and importance in the market (strategically or otherwise). The Report suggests that in the future, more stringent mechanisms will be put in place to ensure that where notification thresholds are not met, the SACC will, amongst other things, require dominant tech companies to inform them of small domestic acquisitions in order to bring about a more robust assessment of digital markets.

The South African team from Primerio note that Section 9(d) of the Competition Amendment Act could potentially be utilised as it includes the ability to assess merger creeping” as a factor which may lessen or prevent competition. Section 9(d)(i) of the Amendment Act requires parties to disclose shareholding in other firms to determine the “extent of ownership by a party to the merger to another firm or other firms in the related market”. Merger “creeping” provisions are further potentially provided for by Section 9(d)(j) and 9(d)(k) of the Amendment Act respectively which assess any other mergers engaged in by a party to a merger over a specified period. Accordingly, the legislation already exists for the assessment of mergers by big-tech companies, in the same assessment as mergers in other markets. Specific legislative amendments aimed at big-tech could be burdensome with unintended consequences, such as reduced investment and a lack of certainty for legal regulators and merging parties.

According to the SACC, the global scope of social platforms have the potential to stunt growth of smaller start-ups in South Africa. For example, the SACC notes that,  Facebook’s acquisition of Whatsapp, was not required to be notified in South Africa on the basis that “Whatsapp did not generate any revenue in South Africa”. Accordingly, even though these transactions were not assessed in South Africa, transactions had direct effects in South Africa, particularly through a reduction of competition (either through driving local competitors out of the market or through the acquisition of local start-ups).

These issues are not unique to South Africa but occur globally. In remedying this potential anti-competitive conduct, digital markets have unique inherent challenges as opposed to the traditional economy:

Firstly, digital markets involve global interaction, as such, multiple jurisdictions may not agree on conduct which is classified as anti-competitive or exclusionary.

 Secondly, these platforms allow for global reach which has the effect that, as elaborated above, decisions in other jurisdictions will have an impact in South Arica, even if South Africa, amongst other countries, is not considered in the decision itself.

The SACC has identified in its Report that, globally there has been a need for digitalization of government services as technological innovations are helpful in enabling governments to communicate with citizens and provide services such as e-health and online education. Albeit the use of digital government services should not be at the expense of citizens exposing personal information to private entities monetizing personal data. The SACC also identified the shared global concerns regarding data protection as being a potential focus of its enforcement efforts. The SACC Report finds that there is an increase of social media platforms abusing alleged dominance to acquire personal data and exploit users. Users who do not wish to provide these social platforms with their personal information are left with little choice as users have limited alternative platforms due to the dominance of a few big tech companies and the so called “tipping point” phenomenon.

The SACC, therefore, hinted towards imposing “privacy” and data protection conditions in merger approvals. The South African team from Primerio note that in terms of the Act, mergers can be approved subject to the public interest conditions laid out in section 16(3) of the Act. These public interest conditions include, amongst other things, a focus on the effect that a merger can have on employment and “the ability of small businesses, or firms controlled or owned by historically disadvantaged persons, to become competitive; the ability of national industries to compete in international markets; and the promotion of a greater spread of ownership”. When big-tech mergers are approved they also acquire the personal data of the consumers, which provides a potentially unfair advantage over small start-ups who do not have the benefit of the widespread marketing that big-tech companies can conduct due to their access to consumers personal data. The SACC can therefore employ public interest conditions in terms of section 16(3) of the Act, which protect the manner in which personal data is collected and exploited, in a way which uplifts SME’s and the public in general, while simultaneously dampening the harsh affects that big-tech mergers have on small businesses.

From an enforcement perspective and aside from the policy objectives set out in the Report, the South African competition authorities have only just started to engage with the potential anti-competitive effects of big-tech on consumers in South Africa. The SACC are of the view that guidance could be taken from the European Union which has employed a cooperative approach, providing global firms across the various jurisdictions in which they operate with consistent regulation.  The SACC report provides that the problems posed in South Africa require coordinated enforcement, regionally and globally, as is seen in the EU which has  greater leverage due to cooperative enforcement between member states, which provides common solutions and more resources to regulate global firms. Proposed cooperative enforcement in Africa is challenging due to the lack of legislative means to do so. To this end the SACC proposes that the platform provided by African Continental Free Trade Area (“AfCFTA”) should be utilised by domestic competition regulators to encourage cooperation on the African continent. Further, the SACC proposes that another platform for cooperation provided for by the African Competition Forum (“ACF”) be utilised to develop formal committees to ensure that competition laws are enforced consistently throughout the continent. This type of cooperation may contribute to a levelling of the playing field and give local start-ups the necessary platforms to grow within the African continent and, as such, be able to compete within the broader global market.

South Africa is not alone in its attempts to grapple with the introduction of digital platform regulation. Germany has taken the lead and become the first jurisdiction in the EU to specifically enact legislation that regulates market power in the digital economy as it approved a reform of national competition law. Germany introduced these laws in recognition of the so called “winner takes all” phenomenon within big tech companies which are  “so-called gatekeeper platforms exerting outsized influence”. The regulations introduced by Germany have set limitations on digital markets and, amongst others, include “rules on self-preferencing and the use of data and interoperability”. The German ex-ante legislation puts the relevant authority in a position to prevent an abuse of dominance from tech companies before they become dominant, as opposed to traditional competition law which addresses companies which have already abused the alleged dominance.

Further, on the 15th of December 2020 the EU proposed the Digital Marketing Act (“DMA”), which, once adopted will be applicable to EU Member States. Article 3 of the DMA defines so-called “gatekeepers” of large online platforms as a company who “has a significant impact on the internal market, operates a core platform service which serves as an important gateway for business users to reach end users; and enjoys an entrenched and durable position in its operations or it is foreseeable that it will enjoy such a position in the near future.” Once an online platform has been established as a “gate-keeper”, Article 5 and 6 of the DMA places obligations on gatekeepers through a list of
“do’s” and “don’t’s” for those companies defined as gatekeepers. According to the European Commission and Article 10 of the DMA, the DMA will update the obligation’s on “gatekeepers” to keep up with the ever evolving digital economy. Further, the DMA has the ability to impose fines and other additional remedies. Accordingly, South African team from Primerio are of the view that, the DMA seems to be another form of ex-ante legislation provided for by the EU as online platforms, who are identified as “gatekeepers”, will have to comply with the set obligations in Article 5 and 6 of the DMA , before any infringement by the online platform has occurred.

To conclude, various jurisdictions have started to introduce regulation of online platforms. In South Africa, the SACC has grappled with the idea and seems to aim for implementation of regulation which can achieve equitable results in South Africa’s developing economy, which the SACC believes faces potential harm. On the 19th of February 2021 South Africa showed proactive steps in their aim to regulate the digital economy when the Online Intermediation Platforms Market Inquiry (“OIPMI”) was published for public comment [accessible here- Insert AAT published link]. The OIPMI was released with the aim of assessing the “winner-take-all” phenomenon of digital platforms.  For the reasons above, the South African team from Primerio are of the view that mechanisms currently exist within the Competition Act 89 of 1998, which can be interpreted to find application within the digital economy in order to govern the alleged harsh affects that big-tech companies have on their competitors.

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buyer power, East Africa, Kenya

Kenyan Competition Law and the Enforcement of Buyer Power- a Step in the Right Direction?

By Jemma Muller and Keegan Sullivan

The Competition Tribunal (“Tribunal”) recently handed down a precedent-setting decision in the case of Majid Al Futtaim Hypermarkets Limited vs Competition Authority of Kenya and Orchards Limited which will not only set the scene on how the competition authorities will tackle the enforcement and assessment of buyer power in Kenya but will also have substantial consequences for retailers in Kenya.

In casu Orchards Limited (“Orchards”) alleged that Majid Al Futtaim Hypermarkets Limited (“Majid”) abused its buyer power. Majid is the operator of the supermarket “Carrefour”, which is supplied with probiotic yoghurts by Orchards. Majid was alleged to have abused its buyer power by: transferring commercial risks to Orchards; refusing to receive Orchards’ goods for reasons which could not be ascribed to Orchards; unilaterally terminating or de-listing the commercial relationship without notice and for no justified reason; applying rebates and listing fees marked as discounts; and requiring Orchards to deploy staff as its own cost.

The Tribunal ultimately upheld the Competition Authority of Kenya’s (“CAK”) judgment in finding, inter alia, that Carrefour abused its buyer power in relation to Orchards. While the Tribunal’s decision brings much-needed clarity on various issues, in particular how it will conduct its assessment of buyer power, which represents an area in competition law that has historically been unregulated, the assessment itself appears to only brush the surface in an analysis which typically (and with regard to comparative jurisdictions) necessitates a robust and thorough analysis.

The Commission, in reaching its decision vis-à-vis the existence and abuse of buyer power, based its decision on the Competition Act No 12 (“Act”), the Buyer Power Guidelines under part III of the Act, and international best practice. Section 24(2B) of the Act stipulates that the authority, in determining buyer power, must take into consideration:

“a) the nature and determination of contract terms;

b) the payment requested for access to infrastructure; and

c) the price paid to suppliers”

Section 24(2D) of the Act stipulates that buyer power means:

“…the influence exerted by an undertaking or group of undertakings in the position of a purchaser of a product or service to obtain from a supplier more favorable terms, or to impose a long-term opportunity cost including harm or withheld benefit which, if carried out, would significantly be disproportionate to any resulting long-term cost to the undertaking or group of undertakings.”

Of particular concern is the Tribunal’s approach and rationale in determining whether Majid had buyer power and whether it had abused its buyer power. Importantly, the Tribunal appears to be jumping the gun so to speak in expressing that “…the influence of power of the buyer becomes evident when the buyer engages in the offending conductand therefore, “by engaging in conduct which amounts to abuse of buyer power, there’s buyer power”. (our emphasis)

According to the Tribunal, the Act defines buyer power by reference to its effects. In casu, “abuse” was evidenced by, inter alia, declining to renegotiate terms, onerous rebates and listing requirements, and the refusal to take delivery of products that were delivered. This represents a notable departure from traditional competition law assessments of buyer power in various respects. In South Africa, for example, the assessment first centres around the existence of buyer power (which requires the buyer to be dominant), followed by whether there has been an abuse of that buyer power. Michael-James Currie from the Primerio International team notes that the Tribunal has essentially put the cart before the horse and notes that astute competition law counselling requires these trends and policy shifts to be well considered.

By engaging in what appears to be an ex-post assessment, the Tribunal’s judgment does not provide much insight or guidance to parties on how to ensure their conduct is aligned with the relevant provisions or how to negotiate trading terms common to commercial practice without facing potential accusations of abuse of buyer power.

Precedent on “buyer power” is scarce and therefore the precedent set by the Tribunal on the matter is of considerable importance both in Kenya and throughout Africa. When viewed comparatively the legislative framework governing “buyer power” in South Africa differs from the Tribunal’s judgment mainly on the requirement of “dominance”.

Section 8(4)(a) of South Africa’s recently amended Competition Act provides;

“It is prohibited for a dominant firm in a sector designated by the Minister in terms of paragraph (d) to directly or indirectly, require from or impose on a supplier that is a small and medium business or a firm controlled or owned by historically disadvantaged persons, unfair:

(i) prices; or (ii) other trading conditions.”

Contrastingly, the Buyer Power Guidelines under Kenyan law state:

“It is not necessary for the buyer to have a dominant position in the market. Although the provisions of abuse of buyer power are included under the provisions of abuse of dominant position, when assessing conduct that amounts to abuse of buyer power, proof of dominance is not a mandatory criteria.”

Additionally, the Tribunal did not undertake a robust assessment of the relevant market, or an analysis of potential foreclosure concerns, consumer welfare or efficiency. Rather, and instead of focusing on anti-competitive effects (which jurisdictions such as South Africa undertake), the Tribunal appeared to be more concerned with fairness to suppliers.

What remains to be seen is how the Tribunal will distinguish between, inter alia, those buyers who extract favourable trading terms by virtue of being dominant in the market vs those buyers who are not, without first undertaking a comprehensive assessment of the buyer’s position in the market.

This judgment, being the Tribunal’s first in relation to the abuse of buyer power, will shape the way in which buyer power will be assessed in Kenya. As such, it is vital that the competition authorities provide comprehensive guidance and much needed certainty to businesses.

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consumer protection, mergers, South Africa

The price might be right, but simmer down: a “Yup” is still required from competition authorities in Mr. Price’s strategic Yuppiechef acquisition

By Gina Lodolo and Estelle Naude


South Africans have been left with dropped jaws at the news that Mr Price Group has entered into an agreement to acquire the local Yuppiechef, known for their quirky, luxury kitchenware.


The owners of Yuppiechef are certainly pleased with their agreement with Mr Price Group to have 100% of their issued share capital acquired in cash for around R470 million and stated that “the timing is right for Yuppiechef to move forward with its growth ambitions with a partner who has a shared vision and the resources to help achieve this. I am excited about our future as a part of the Mr Price Group. They are a business which prides themselves on innovation and growth and we are strategically aligned in our plans. We share similar cultures and values which will make this an easy fit for both parties.”

According to Mr Price Group, the acquisition will provide the opportunity for Mr Price Group to expand their market share by reaching a high-end customer base in the kitchen appliance department, as well as expand their product variety from that which is already part of the Mr Price Group offering. Yuppiechef has a larger online presence than Mr Price Group, as such, Mr Price Group will reap competitive benefits from the online presence of Yuppiechef, which will enable them to become a more effective competitor with the likes of inter alia, Takealot.


According to the voluntary announcement from Mr Price Group regarding the acquisition of Yuppiechef, “the targeted effective date is subject to the fulfilment of both regulatory and commercial suspensive conditions which includes competition authority approval.” As such, it is important to note that section 13(3) of the Competition Act 89 of 1998 (“Act”) states that “the parties to an intermediate or large merger may not implement that merger until it has been approved, with or without conditions, by the Competition Commission.” Thereafter, according to section 12A(2) of the Competition Amendment Act 18 of 2018 (“Amendment Act”), a proposed merger must be evaluated on both competition and public interest grounds.


Accordingly, although South Africans are excited about the success story of the local Yuppiechef start-up, it is important to note that the proposed acquisition is still subject to scrutiny from the competition authorities before implementation of the merger can take effect.


Further, Yuppiechef is not the only home-grown retail store that Mr Price Group has sunk it’s teeth into as they seem untouched by the COVID-19 pandemic in their acquisition of Power Fashion, which was approved by the Competition Tribunal in March 2021. The acquisition of Power Fashion, with 170 retail stores, places Mr Price Group in an even stronger competitive position against the likes of Pep and JAM Clothing. According to the South African Primerio team, this acquisition places Mr Price Group in a strategic position to compete more vehemently with the lower end market, while Mr Price Group’s proposed acquisition of Yuppiechef places Mr Price Group in a position to access the higher end market. It seems that Mr Price Group intends to diversify its market share to such an extent that they are able to access the entire market, being both the lower end and the higher end consumer through the acquisition of Power Fashion and proposed acquisition of Yuppiechef respectively. The large scope of retail outlets provided by Power Fashion allows Mr Price Group to expand their physical store offering, while the online retail side will soon be catered for by the acquisition of YuppieChef.


According to Moneyweb the Mr Price Group’s JSE listing is “around 64% up on a year ago when South Africa went into its first Covid-19 lockdown”. Accordingly, Mr Price Group’s diversification and broader acquisition of market share may be one of the reasons that Mr Price Group finds itself at a stock high, unfettered by effects of the COVID-19 pandemic.

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draft, legislation, South Africa

S.A. considers non-binding advisory opinions (again)

The South African Competition Act and the re-emergence of non-binding advisory opinions: Draft regulations published for comment

By Jemma Muller and Estelle Naude

After the suspension of the Competition Commission’s (“Commission”) advisory service in 2018, following the Constitutional Court’s decision in Hosken Consolidated Investments Limited v The Competition Commission, the regulation of non-binding advisory opinions is once again on the Commission’s agenda.

On the 23rd of March 2021, the Proposed Regulations on Non-Binding Advisory Opinions (“Proposed Regulations”) were published for comment by the Department of Trade, Industry and Competition (“DTIC”) in Gazette 44310 GoN 248. The public have been afforded until 23 April 2021 to provide their comment on the Proposed Regulations.

These Draft Regulations are centered around three important aspects of non-binding advisory opinions, namely:

  • How one can request a non-binding advisory opinion from the Commission;
  • The legal status of a non-binding advisory opinion; and
  • The fees payable if one requests a non-binding advisory opinion.

When requesting a non-binding advisory opinion, the requesting party will have to provide the Commission with a fairly comprehensive set of information, including, inter alia, the requesting party’s name, the market(s) in which it operates, the reasons for seeking a non-binding advisory opinion, the nature of the legal advice requested, appropriate information to allow the Commission to determine whether the requesting party falls within one of the entities exempt from paying a fee, and any other facts, information and documents which would enable to the Commission to provide a non-binding advisory opinion.

The Proposed Regulations serve as a vital tool for parties to receive guidance from the Commission pertaining to their compliance with the Competition Act No. 89 of 1998, as amended (the “Act”). Obtaining guidance from the Commission, for example on whether a proposed merger is notifiable, could not only prevent the party concerned from facing penalties for contravening the Act, but also save time and resources and negate the need for paying a filing fee (although requesting a non-binding advisory opinion does attract a fee in certain circumstances, which is discussed more fully below).

Notwithstanding the above, the information that the requesting party is required to disclose to the Commission may have the unintended consequence of discouraging parties from utilizing the advisory function for fear of confidentiality concerns. In this respect, section 44 of the Act is relevant and states the following:

1(a) A person, when submitting information to the Competition Commission or the Competition Tribunal, may identity information that the person claims to be confidential information.

(2) The Competition Commission is bound by that a claim contemplated in subsection (1), but may at any time during its proceedings refer the claim to the Competition Tribunal to determine whether or not the information is confidential information(our emphasis)

On the 23rd of March 2021, the DTIC also published for comment amendments to forms, rules and regulations of the Commission in Gazette 44309 GoN 247 (available at https://www.gov.za/sites/default/files/gcis_document/202103/44309gon247.pdf) which deals with, inter alia, an amended Rule 15A which pertains to access to confidential information submitted to the Commission. Rule 15A states:

“(1) Before the Commission makes the determination contemplated in section 44(3) of the Act in respect of information submitted to the Commission under a confidentiality claim, the Commission must:

(a) issue a Notice of intention to make a determination in Form CC 23 to the claimant and the Respondent; and

(b) allow the claimant and the Respondent 5 business days to make representations to the Commission.

(2) Within 5 business days after the Commission makes its determination in terms of section 44(3), an aggrieved person may refer the Commission’s decision to the Tribunal in accordance with the Tribunal’s rules.” (our emphasis)

According to the Proposed Regulations, the Commission is permitted, upon receipt of a request for a non-binding advisory opinion, to determine whether the issues subject to the request should be dealt with in an investigation or any other process under the Act. Additionally, a non-binding advisory opinion cannot fetter the discretion of the Commission while it exercises its functions in terms of the Act. As with the information the requesting party is required to disclose to the Commission, this provision may serve to deter businesses from utilizing this advisory function for fear that information disclosed may later be used by the Commission in an investigation. In this regard, section 45A of the Act states:

1(a) When making any decision in terms of this Act, the Competition Commission, subject to paragraph (b), may take confidential information into account in making its decision.”

This also raises the question on the status of confidential information submitted to the Commission pursuant to a non-binding advisory opinion, which the Commission later declines to issue an opinion on. According to the Proposed Regulations, if the Commission declines to issue an opinion, it must refund the fee paid by the requesting party if it appears the issues underpinning the advisory opinion will undermine the objectives of the Act.

Importantly, a request by medium enterprises and other market participants for a non-binding advisory opinion must be accompanied by a fee of R20 000 and R50 000 respectively. This is a notable increase from the fees the Commission previously charged under Rule 10.4 of the Conduct of Proceeding in the Competition Commission, which was a fee of R2500 payable by the requesting party.

While the proposed fee structure is a noticeable increase from the fees previously payable under Rule 10.4, the penalties for contravening the Act as well as merger filing fees prescribed by the Act can be far more costly than the cost of requesting a non-binding advisory opinion. It is also noteworthy that the Proposed Regulations expressly exclude certain entities from paying a fee, namely:

  • Constitutional institutions;
  • Departments;
  • Major public entities;
  • Micro enterprises;
  • Non-profit organizations;
  • Other public entities; and
  • Small enterprises.

It could be argued that the exclusion of the abovementioned entities from paying a fee may open the floodgates for requests for non-binding advisory opinions to the Commission, which could overburden an already inundated Commission.

In terms of the legal status of non-binding advisory opinions, the Proposed Regulations make it clear that the opinion has no binding legal effect on the Commission, the Competition Tribunal or the Competition Appeal Court.

The Proposed Regulations, while still in draft form, represent an important competition law development in South Africa and provide parties with much needed guidance, particularly in light of the complexities and legal nuances brought about by the recent amendments to the Act. Furthermore, the Proposed Regulations are largely in line with recent trends in promoting competition law compliance through competition advocacy as opposed to enforcement mechanisms.

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consumer protection, new regime, Nigeria

Nigerian competition authorities finally established

The Federal Government of Nigeria inaugurates the Federal Competition & Consumer Protection Commission (“FCCPC”) and the Competition & Consumer Protection Commission Tribunal (“CCPT”) 

By Gina Lodolo

The Federal Government inaugurated the governing board of the FCCPC together with that of the CCPT, in order to ensure that consumer protection is placed at the forefront in giving effect to Nigeria’s developmental goals.  The board was inaugurated by the Minister of Industry Trade and Investment, Otunba Adeniyi Adebayo on the 4th of March 2021.

Section 4 of the Federal Competition and Consumer Protection Act, 2018 (“Act”) provides that in the establishment of a Governing Board charged with the administration of affairs of the Federal Competition and Consumer Protection Commission, the Board shall “consist of 8 Commissioners made up of a Chairman, a Chief Executive who shall also be the Executive Vice Chairman, two executive Commissioners and four non-executive commissioners”.

According to Section 5 of the Act, the Board members are appointed by the President from the six geo-political zones in the country, subject to confirmation by the Senate. Each Commissioner shall serve for a term of 4 years. The term may only be renewed by the President for a further term of 4 years.

The responsibilities of the FCCPC will be, inter alia, to monitor staff performance, financial reporting and to ensure accountability.  The FCCPC has been established as a policy-making body as gleaned from Minister Adebayo who stated that the agency “as the highest policy-making body, [… is] expected to ensure that the Federal Government’s mandate is achieved”.  Mr. Emeka Nwankpa, Chairman of FCCPC’s board, said that “the board was the first of its kind in the commission [and] appealed to the government to give the team the necessary support in order to function effectively”. Hajia Sharatu Shafi, Chairman of the CCPT board, said “the tribunal would ensure thorough and timely adjudication to ensure that Nigerians get value for their money and enjoy all privileges and protection”.

Minister Adebayo stated that the “present administration has zero tolerance for any form of corruption and this stance must not be compromised in any way”.  Further, “government will punish any corrupt practices perpetrated  by any board members as well as the management team.”

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COMESA, East Africa, economics, Uganda

Uganda misses $5m Common Market payments, gets “suspension”

As the local Daily Monitor reports, landlocked COMESA member state Uganda — ruled since January 1986 by authoritarian president Museveni — has failed to make requisite payments under the COMESA Treaty to the supra-national regional organization. Its arrears date back over two years, according to sources, and amount to roughly U.S. $4 to 5 million. Arrears carry with them a 1% per annum interest rate.

COMESA’s Secretary General has officially reprimanded the Ugandan government and placed the nation on the organization’s “sanction bracket.” Andreas Stargard, an attorney with Africa boutique law firm Primerio Ltd., notes that being sanctioned carries with it the nation-state’s loss of all privileges of COMESA membership, including its key free-trading benefits, during the duration of the sanctions being imposed. “It also means that Ugandan officials are not permitted to address official COMESA bodies, nor are Ugandan citizens permitted to be appointed to, or hired by, COMESA organs. It remains to be seen whether this suspension of Uganda will impact competition-law enforcement in any direct, appreciable way — what comes to mind is merger notification and the impact that Uganda’s being sanctioned may have on cooperation between the CCC and Ugandan authorities.”

The outstanding debt is all the more concerning as Museveni’s administration, in an attempt to cling to power after 35 years, recently reportedly spent large sums out of the state’s coffers on military-grade weaponry to prepare for the chaos precipitated by the recent hotly-disputed elections.

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event

Antitrust writing awards – call for nominations

Our partner publication Concurrences is happy to announce that submissions are now open for the 2021 Antitrust Writing Awards.

Now in their 10th year, the Antitrust Writing Awards are given for excellent written thoughts in the field. Participation in the Awards process, whether as an author, jury member, or reader, helps highlight the best antitrust ideas of the past year.

The present Call for Nominations concerns 3 types of publications:

  • Best Articles: Articles published or accepted for publication in 2020, in both academic journals and professional magazines.
  • Best Soft Laws: Most innovative non-enforcement tools issued by competition agencies in 2020, such as guidelines, market studies, white books, etc.
  • Best Student Papers: Articles written or published in 2020 by current students of law or economics.

Deadline for submissions is Monday, April 5, 2021. You can submit your article here: https://awards.concurrences.com/

Winners will be announced at the online Awards Ceremony on Wednesday, June 30, 2021, and accept their Awards in the presence of the Board and Steering Committee Members. To see the full list of Jury members, click here.

The Antitrust Writing Awards is a joint initiative between Concurrences and the George Washington University Law School.

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cartels, collusion, COMESA, Kenya

Single Brush Stroke Stops Paints Cartel in its Tracks

Three years after an intricate East-African antitrust saga involving global European and Asian paint manufacturers, the industry is in the region’s competition-law news again.

Upon receiving allegations of cartel-like practices between paint makers and undisclosed distributors in 2018, the Competition Authority of Kenya (CAK) launched an investigation into the suspected companies. The investigations later uncovered that four firms, namely: Crown Paints, Basco Products Limited, Kansai Plascon and Galaxy Paints (Companies) were guilty of collusion and price fixing which subjected the purchaser to unreasonably high prices for various paint brands. The CAK has since revealed this to Parliament and handed down its finding on the alleged ant-competitive behavior.

Crown Paints has a flagship brand called DuraCoat, which includes paint products for both interior and exterior finishing (painting and waterproofing). Dura Brands’ exposed collusion with the other three companies sparked fears that consumers have been buying these products at largely inflated prices. This is particularly significant given that Crown Paints is listed on the Nairobi Securities Exchange and is a heavyweight in the local paints market, with subsidiaries in Uganda and Tanzania.

Ruth Mosoti, Primerio Ltd.’s Kenyan competition practitioner, notes that the “CAK ultimately found that all four companies were in direct contravention of section 31 of the Competition Act, which addresses restrictive trade practices that prohibit companies from colluding with one another in order to determine product prices, as well as control when and to whom they will offer pricing discounts. CAK alleges that these are all anti-competitive behaviors that are to the detriment of the consumer as well as other, outside competitors.”

The authority making preliminary findings that the parties were involved in anti-competitive agreements on price fixing, discount structure and transport charges.” – Stated by the CAK in its latest report tabled before parliament.

In line with section 36(c) and (d) of the Act, the CAK is entitled to impose financial penalties “to remedy or reverse the infringement or the effects thereof” which may span “up to ten percent of the immediately preceding year’s gross annual turnover in Kenya of the undertaking or undertakings in question”.

Of the four Companies, Basco Products Limited was the only company that did not challenge the CAK’s preliminary ruling and paid the penalty amount of Sh20.799 million for the infringement. The company further agreed to abstain from committing any similar breach in the future. While the other companies initially appealed the decision handed down by the CAK, AAT staff have now learned that up to 3 of the accused firms have opted to settle, having withdrawn their appeals.

COMESA

It is also pivotal to note that on the 25th of February 2021, the COMESA Competition Commission (Commission) issued a cautionary note specifically pertaining to the consequences of forming barriers to trade.

The Commission made reference to Article 16 of the Regulations which prohibits “all agreements between undertakings, decisions by associations of undertakings and concerted practices which: (a) may affect trade between Member States; and (b) have as their object or effect the prevention, restriction or distortion of competition within the Common Market”.

The abovementioned contravention is evident in the case at hand, with the Commission going on to state that it “…will work closely with the national competition authorities in the Member States to ensure that offenders are detected, investigated and punished”. Furthermore, there is particular focus on “hard enforcement through screening, detection, investigation and punishment of offenders”.

The detrimental consequences arising from the conduct of these firms is not only prejudicial towards the customer due to the fact that price-fixing also excludes rival organizations that do not agree to the collusive setting of prices from competing in the same market. Therefore, the steps taken by the CAK and COMESA are paving the way to a healthy and competitive marketplace.

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draft, economics, market study, South Africa

Online Intermediation Platforms Market Inquiry: Call for Comments

By Jemma Muller & Gina Lodolo / edits by Charl van der Merwe

The South African Competition Commission (SACC) indicated its intent to formally initiate a market inquiry in the Online Intermediation Platforms Market (Inquiry), in terms of section 43B(1)(a) of the Competition Act 89 of 1998 (as amended) (Competition Act).

In terms of the amended Competition Act, the SACC has the power to conduct a market inquiry at any time, “if it has reason to believe that any feature or combination of features of a market or any goods or services impedes, distorts or restricts competition within that market.

The SACC published its draft Terms of Reference (ToR), allowing members of the public until 12 March 2021 to submit their comments on the scope of the Inquiry.

The ToR envisage a limited scope of assessment, to include only online intermediation services and, in particular, eCommerce marketplaces; online classifieds; travel and accommodation aggregators; short term accommodation intermediation; food delivery; app stores (with the notable exclusion of ‘fintech’).

The Inquiry will be focused on both competition and public interest factors and will aim to consider:

  • market features that may hinder competition amongst the platforms themselves;
  • market features that give rise to discriminatory or exploitative treatment of business users; and
  • market features that may negatively impact on the participation of SMEs and/or HDI owned firms

According to the SACC in the ToR, these platforms have been flagged as they have the potential to self-preference and distort markets through algorithms, which is harmful to businesses who rely on these platforms to reach consumers.

The Inquiry follows shortly on the back of the SACC’s “Competition in the Digital Economy” report (Report), which was published for public comment in the final quarter of 2020. In the Report, the SACC specifically identified market inquiries are an effective tool to address market barriers (especially for Small Medium Enterprises (SME) and historically disadvantaged individuals (HDP)) and to address market feature concerns which may lead to reduced competition.

Allied to this, the ToR goes on to state, in support of the Inquiry, that the use of intermediation services can provide a manner of entry into a market for SMEs/ HDPs, but due to the potential distortions of the market, may also discriminate against them. As a result of the COVID-19 pandemic, domestic online business opportunities are vital in ensuring economic recovery as well as inclusive growth of SMEs and HDPs.

The Inquiry will be the first inquiry in terms of the Competition Act as amended. In this regard, the amended Competition Act empowers the SACC to “take action to remedy, mitigate or prevent the adverse effect on competition”.  This includes imposing structural or behavioural remedies.

It is also notable that the standard of assessment for market inquiries is a lower standard that that required in complaint proceedings. The SACC need only find that certain elements of the market may have “adverse effect on competition” (as opposed a substantial lessening of competition).

In light of these facts, firms in the relevant market cannot afford to remain passive participants in market inquiries and, instead, must consider and respond to the inquiry, as a respondent.

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