Competition Commission of Mauritius Launches Investigation into Cross-Border Money Transfers

mauritius

On 06 May 2015, the Competition Commission of Mauritius (“CCM”) identified the potential restrictive business practice which may exist between The Western Union Company (“Western Union”) and MoneyGram International Inc (“MoneyGram”) as a result of exclusive agreements (“Agreements”) put in place between the two companies.

The Agreements are purportedly entered into separately between the two companies and certain agents, which in turn, potentially prohibit the Agents from supplying competing services to their clients (the Agreements are not entered into between the two firms themselves, and thus do not constitute horizontal agreements) . These Agreements could have the further anti-competitive effect of creating a barrier to entry and possible foreclosure effects.

The CCM has indicated that they have not reached a conclusion yet as to whether these Agreements are in fact anti-competitive. It will also have to be seen whether there are any efficiency arguments would could possible justify such an exclusionary act (if the conduct does in fact breach any provision of the Competition Act, 2007 (the “Act”)).

As far as potential remedies are concerned, the conduct mentioned above could potentially fall under one of two main categories. The CCM could either view the Agreements as constituting “Other restrictive agreements” and/or “Monopoly situations” in terms of Section 45 or 46 of the Act, respectively.

A monopoly will be deemed to exist, in terms of the Act, if one enterprise provides at least 30% of the goods or services on the relevant market or, 70% of the goods or services on the relevant market are provided by 3 or fewer enterprises.

A monopoly situation may be subject to review if the CCM has reasonable grounds to believe that the enterprise(s) are engaging in conduct which: “Has the object or effect of preventing, restricting or distorting competition; or In any other way constitutes exploitation of the monopoly situation.”

As far for the possible penalties and/or remedies that may be imposed for breaching either Section 45 or 46, no financial penalties may be imposed by the CCM for violations of these two sections. Thus, in terms of the Act, the only type of vertical conduct which could lead to a financial penalty being imposed, is what is commonly known as ‘minimum price resale maintenance’. Thus, unlike many other African countries such as South Africa, a company who abuses its dominant position will not be exposed to financial liability, despite such conduct having substantial anti-competitive effects (provided such a company does not engage in horizontal agreements, bid-rigging or collusion or minimum resale agreements).

An infringement relating to Section 45 or 46 could only result in the CCM issuing directives, which have as their purpose, the objective of restoring competition in the market, and are not to be seen as being punitive in nature.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s