COMESA member state, the Comoros, recently adopted its own competition, (Loi No.13 -014 /AU – Relative à la concurrence en Union des Comoros (the Competition Act)) which will apply to all entities (public and private) who conduct business which has an “effect” in the Comoros.
The Act prohibits restrictive practices and abuse of dominance practices, although caters for a rule of reason defence. Parties may also apply for exemptions from either the Government or the Commission Nationale de la Concurrence (“CNC”). The CNC is responsible for enforcing the provisions of the Act, but has not yet been established.
Firms that are currently active in Comoros should take particular note of this legislative development due to the substantial administrative penalties which may be imposed for contravening the Competition Act.
Potential penalties for engaging in restrictive practices in contravention of the Competition Act can result in firms being fined a maximum of 5% of global turnover and 20% local turnover. These potential maximum penalties are significantly higher than the commonly prescribed maximum administrative penalty of 10% of domestic turnover only.
Interestingly, the Competition Act does not provide for merger notification. There is, however, a provision which provides for the imposition of an administrative penalty if incorrect information is provided to the CNC in relation to a merger. Primerio Founder, John Oxenham, mentions “This discrepancy needs to be clarified and it is likely that this provision applies in circumstances where the CNC calls upon merging parties to provide it with information in relation to a specific transaction”.
Primerio Director, Andreas Stargard, confirmed that the Competition Act will be subject to COMESA and is in line with COMESA’s framework which Stargard mentions “envisages that each member state must have its own domestic competition regime”.