Antitrust in Mozambique? …could have stayed in COMESA.


We know it’s a somewhat brusque title for a “new competition regime” post.
But we must ask ourselves: Why is the República de Moçambique now joining the growing cadre of countries with a competition-law regime** — almost exactly half a year after COMESA instituted its own competition rules?

That’s a rhetorical question, of course.  Mozambique notably decided to leave the (then-21 member state) COMESA organisation in 1997, after barely 3 years of membership.

The new Mozambique Competition Law, no. 10 / 2013 will become effective by 11 July 2013, with implementing rules to be finalised in the fall, which will guide the newly-established Autoridade Reguladora da Concorrência (Competition Regulatory Authority).  It is the result of a 6-year long process of designing and establishing a competition policy that began in 2007 with a domestic legislative push in this direction and a subsequent May 2008 draft competition law proposed by an E.U. study sponsored by the European Development Fund.  It remains to be seen whether the ARC will formally join the Lusophone Competition Network of Portuguese-speaking antitrust jurisdictions or not.

While the final version of the imminent Mozambiquan competition law includes a (suspensory!) merger notification regime, it is likely that deal enforcement will initially take a back seat to monopolisation/abuse-of-dominance issues, as the competitive landscape in the Mozambiquan economy is characterised less by mergers-to-monopoly rather than by formerly state-owned enterprises, now privatised, that tend to exert potential market dominance.

Details, details…

Depending on the severity of any infringement, a 1 to 5% prior-year turnover fine, as well as the potential for a criminal antitrust offence anticipatorily included in the law, all serve to cause market participants to tread more cautiously in the future.

(Oh, lest we forget to mention it, especially in the context of the fining scale:  the national flag of Mozambique sports a Kalashnikov AK-47 assault rifle, with bayonet attached.  We do not think that this is indicative of the country’s future antitrust enforcement style, but we do believe that Mozambique may be the only competition-law jurisdiction with a fully-automatic gun as a state symbol.)

The law goes into effect the second week of July 2013 (see our Countdown Timer at the bottom right of this page), for those who keep track…

Mobile communications as likely target?

We here at predict that the comparatively large (and seemingly concentrated) mobile-phone market in Mozambique may soon see an investigation into abuses of dominance under the new law.  There are several million mobile subscribers vs. less than 100,000 landlines country-wide — yet, only 2 mobile providers exist, mCel & Vodacom.

** as to the “growing cadre”, how many jurisdictions are there nowadays?  The International Competition Network has about 111 member jurisdictions, which is indicative of the lower bound, but there are surely additional ones (e.g., COMESA, which is not a member of the ICN), so the total figure should be >112…

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