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To remind our readers, we had previously reported on AAT as to this (now rescinded) note as follows (Feb. 11, 2021):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

Toyota’s distribution & pricing agreements under COMESA scrutiny

Regional bloc’s antitrust enforcer further steps up investigations in the Common Market

By Gina Lodolo
On 16 June 2022, the Common Market for Eastern and Southern Africa (“COMESA”)’s Competition Commission (“CCC”) provided notice, as required by Article 22 of the COMESA Regulations (“Regulations”), that it launched an investigation into Toyota Tsusho Corporation (“Toyota”) in case no. CCC/ACBP/NI/3/2022.


Where the CCC has reason to believe that competition in the Common Market has been restrained, Article 22 of the Regulations requires the entity involved to be notified of the investigation, and further requires the investigation to be completed within 180 days of the notification. In this regard, the Toyota investigation was launched following allegations that the company contravened Article 16 of the Regulations. Article 16 (generally covering ‘restrictive business practices’) prohibits agreements that “may affect trade between Member States; and have as their object or effect the prevention, restriction or distortion of competition within the Common Market”.


The specific conduct referred to by Dr. Willard Mwemba, the Director and Chief Executive Officer of COMESA — who has revitalised the relatively young antitrust authority’s conduct investigations and increased its caché internationally by following best practices and engaging competition practitioners globally in the agency’s development and capacity-building process — includes Toyota’s distribution agreements with its authorised distributors. These vehicle distributors sell Toyota cars, trucks, and spare parts across the region, within their contractually designated territories. In this regard, the CCC is now investigating suspicions that the distribution agreements violate Article 16 of the Regulations in various ways — they may:
• Provide prohibitions on authorised distributors to sell outside of allocated geographic areas;
• Prohibit authorised distributors from indirectly selling outside of allocated geographic areas through selling to third parties, who they suspect will sell or transfer to another territory; and
• Indicate resale price maintenance by providing prices of Toyota products in the Common Market.

Andreas Stargard, a competition partner at Primerio Ltd. said, “this development shows how ‘CCC 2.0’ is truly emerging as a fully-fledged African antitrust enforcement authority and not a mere merger ‘toll booth’ regulator, which it essentially was for the first few years of its existence. The CCC has come a long way from the early days and is now pursuing abuse-of-dominance cases that it would not have had the capacity to tackle a decade ago”. Stargard observes that the Toyota case is “now the 3rd announced anticompetitive-business practice investigation of the year 2022 so far,” which is an absolute record for the CCC. “We’re talking proper grey-market / parallel-export restriction and RPM investigations here, this is no longer just a merger-fee collections agency.”

The agency invites public comment and further insight into Toyota’s dealings by 30th of July. Interested parties are invited to make comments to the Commission by 30 July 2022.

Doris Tshepe to lead Africa’s major antitrust enforcer as of September 2022

On 9th June 2022, the Minister of Trade, Industry and Competition, Mr Ebrahim Patel, announced his decision to appoint Ms. Doris Tshepe as the new Commissioner of the South African Competition Commission (“SACC”). Ms Tshepe will succeed outgoing Commissioner Tembinkosi Bonakele.

Minister Patel’s announcement comes as somewhat of a surprise to observers, given Commissioner Bonakele’s nine-year tenure and instrumentality in increasing merger and cartel enforcement within South Africa, whilst also advocating and advancing the role of the ‘public interest’ in both of these aspects. Under the leadership of Commissioner Bonakele, the SACC has been considered widely as an agency of international importance.

Andreas Stargard and Outgoing Commissioner Tembinkosi Bonakele (South Africa)

Commissioner Bonakele’s successor, Ms Doris Tshepe, is a well-regarded attorney with extensive experience. Her legal practice spans over 20 years, during which she specialised in constitutional and administrative law, legislative drafting, media and communication law, commercial law, competition law and employment law.  Additionally, Ms Tshepe has significant investigatory experience, having been involved in the SACC’s previous market inquiries into the Liquid Petroleum Gas and Grocery Retail sectors as well as being a panel member for the recent Online Markets Inquiry. In addition to her investigative experience, Ms Tshepe also has legislative chops, having sat on a 2019 panel considering the recent amendments to the South African Competition Act.  Says John Oxenham, a South African antitrust attorney: “Future Commissioner Tshepe’s long history of working with the SACC and others to shape the current enforcement approach of the agency (as well as its trajectory for the future) indicates that the Commission’s focus will remain steady and sharp. I do not foresee any wavering in the course of the SACC’s currently robust operations, due to the transition in its leadership.”

Bearing Ms Tshepe’s investigative history in mind, we can generally expect her to continue Commissioner Bonakele’s strong enforcement initiatives. Having been appointed to the panel on the amendment of the Competition Act, there is also a reasonable likelihood that we will see the SACC continue implementing, if not increasing, its long-standing public-interest agenda – particularly given the transformative socio-economic objects of South African legislation, say the competition practitioners at Primerio Ltd.

Lastly, we note that not all is over at the SACC for “Tembi” — Minister Patel has stated that there are discussions with outgoing Commissioner Bonakele regarding the delegation of an appropriate set of responsibilities that would allow him to utilize his skills and experience in competition and public policy after his departure. Again, although the details of these responsibilities are unknown, Minister Patel’s statement emphasizes the increased shift towards a public-policy centric competition regime. 

Ms Tshepe is expected to assume her position as Commissioner of the Competition Commission during the course of September 2022.

Incoming Commissioner Doris Tshepe

African antitrust authority edges closer to becoming price regulator

The South African Competition Commission warns against unjustifiable price increases of basic foods, particularly edible oil

By Gina Lodolo and Nicola Taljaard

Recent increases in the prices of edible oils have been the focus of news reports. Some retailers have been garnering particular attention for limiting the amount of oil that can be purchased per consumer.

The Chief Economist of the South African Competition Commission (“SACC”), James Hodge, highlighted the price of oil increasing by 42% over a year. This is significant as it reflects 3%-5% of poorer households’ food budget. It has been reported that, although there were already market factors last year affecting the price of oil, the Russia-Ukraine war has certainly exacerbated the situation. Hodge warns, however, that retailers and edible oil companies alike should not unreasonably use the Russia-Ukraine war to raise prices to unjust levels by inflating their price increases more than necessary, thereby seeking to earn ‘excessive profits’.

The SACC will look into the issue more closely. If and when the SACC comes to the conclusion that companies profiteer from their customers, they will act accordingly.

Where costs go up, there may be justifiable increases in prices, however, its recent warning against unjustifiable increases indicates that it will act where prices increase beyond justifiable cost-increase levels. Accordingly, the SACC is considering items that indicate unusual increases, even when taking into consideration the prevailing inflationary environment.

To this effect, Hodge emphasised that the SACC makes use of its ‘monitoring unit’ which tracks price increases by comparing increases in wholesale prices to increases in retail prices.

The work of the monitoring unit is particularly timely in light of its recent Report on Essential Food Pricing Monitoring, which was released on 1 March 2022. The Report clearly communicated the SACC’s intention to start tracking price increases and monitoring dynamics prevalent in the South African food value chain, which made it apparent that the SACC is cognizant of the impact of the significant disruptions and events which have characterized the pandemic years. The SACC has identified this impact to reflect particularly through supply chain disruptions, trade restrictions, border closures and the like.  

Should the SACC suspect that retail price increases have surpassed wholesale price increases, complaints may be initiated by the SACC in terms of Section 49B of the Competition Act 89 of 1998. Thereafter, the complaint will be investigated in terms of Section 49B(3) of the Act to determine whether it will be referred to the Competition Tribunal for adjudication.   

And you thought attorneys were above the (antitrust) law…?

Namibian Competition Watchdog Probes Alleged Collusion Between Law Firm and Bank

Namibia’s Competition Commission (the “NaCC”) has begun a Section 33 investigation into the alleged exclusive-dealing arrangement in relation to property conveyancing between Bank Windhoek and the domestic law firm of Dr Weder, Kauta and Hoveka, which has offices in 4 cities and touts itself as being “widely respected and recognised for its professionalism and excellence in service provision.”

The purported deal requires those applying for a loan from Bank Windhoek to use the law firm’s conveyancing services, thereby allegedly excluding other attorneys, according to the NaCC’s formal statement announcing the investigation, which resulted from an apparent private complaint brought to the NaCC: “The agreement and its maintained exclusivity is said to limit competition and forecloses other independent service providers in the relevant market, which is provisionally defined as the provision of conveyancing services to Bank Windhoek-financed property transactions,” in violation of section 23 of the Namibian Competition Act. It is reported that the law firm has denied knowledge of the existence of any such agreement with the banking institution and has sought a copy of the document.

South African Competition Tribunal Hands Down Another Price-Gouging Case: Face Masks Supplier Fined Maximum Penalty

By Michael-James Currie and Nicola Taljaard

[Currie is a director at Primerio and Taljaard is a lawyer at Primerio]

On 28 April 2022, the South African Competition Tribunal (“Tribunal”) handed down a decision in which it found Tsutsumani Business Enterprises (“Tsutsumani”) had contravened the excessive pricing prohibition contained in section 8(1)(a) of the Competition Act (“Act”). The conduct relates to the supply of face masks by Tsutsumani to the South African Police Services (“SAPS”) during the early stages of the Covid-19 pandemic.

The case against Tsutsumani is the first time that the Commission has successfully prosecuted a company for price gouging in the context of a public procurement process. The Commission did, however, successfully prosecute two companies for supplying masks at excessive prices at a retail level. In 2020, the Tribunal, in Competition Commission v Babelegi Workwear and Industrial Supplies CC (“Babelegi) and Competition Commission of South Africa v Dis-Chem Pharmacies Limited (Dis-Chem) the Tribunal found the respondents guilty of excessive pricing. In the latter case, the Tribunal warned that ‘material price increases of essential items such as surgical masks, even in the short run, in a health disaster such as the Covid-19 outbreak, warrants its intervention.’ This warning has certainly proved to be a serious one in light of the Tsutsumani case.

Tsutsumani is a general trader who participated in a tender for the urgent supply of face masks to South African Police Services (“SAPS”) during the first hard lock-down in South Africa. The complaint, lodged by SAPS to the Commission on 5 May 2020, alleged that Tsutsumani had engaged in price gouging following a major and unprecedented surge in the demand for face masks.

The Tribunal recognized the precarious position SAPS found themselves in as it required nine million masks per month during the relevant period and found that Tsutsumani acted exploitatively towards the SAPS by quoting the State entity R16.25 million for a 500 000 bulk mask supply order during April 2020. The determination that this price was excessive was made following evidence being led showing that Tsutsumani added a mark-up of 87%, giving them a 46% gross margin per mask. The monetary reward amounted to approximately R5.3 million in excessive profits alone. In accordance with the fines prescribed by legislation, the Tribunal fined Tsutsumani the maximum administrative penalty of 10% of its relevant turnover, amounting to a total of R3 441 689.10.

Assessing the South African price gouging cases purely from a competition law point of view, the Tribunal’s price gouging cases do raise several concerns regarding the extent to which excessive pricing – or abuse of dominance cases more generally – may be prosecuted in future. Most notably, the earlier price gouging cases found a firm which had only a 5% market share to be dominant on the basis that the firm possessed “market power”, albeit for a very short period, as a result of the Covid 19 pandemic. Basic economic principles tell us that price is typically influenced by the demand-supply relationship. Assessing “market power” with reference to a very short time frame notionally means, therefore, that any factors which give rise to a demand surge or supply shortage, may confer “market power” on a firm who may be subject to scrutiny if they increase their prices subject to such demand/supply pressures. Such a short term approach to assessing market power also naturally excludes any assessment to consider likely market entry or incentives to increase supply to respond to the demand surge.

Although the Tribunal and the Competition Appeal Court sought to emphasise the unique market dynamics due to the pandemic, the economic and legal principles set out in these decisions could be expanded to other cases beyond circumstances as significant as a global pandemic. It would be preferable if there were clear rules published as to when firms (even small firms) are at risk by raising prices during a state of national disaster (such as those which were in fact published in South Africa but only after the alleged conduct subject to the price gouging cases took place). While one might have some sympathy for the competition authorities wanting to protect consumers during the pandemic, by departing from traditional approaches to assessing excessive pricing cases so as to address price gouging concerns risks potentially undermining certainty and makes it difficult for firms to internally assess their conduct against the relevant benchmarks. The enforcement and application of competition law, like all laws, should always strive to advance legal certainty. This is why deviating from a body of international precedent and best practice should not be easily departed from. If it was clear that price gouging cases such as those prosecuted to date were only applicable during states of National Disaster that would go a long way to providing such certainty. But there is no basis why complainants are not able to apply the principles set out in the price gouging cases to all sorts of market dynamics which may ordinarily lead to significant price increases. We have already noted the Commission’s public warning to domestic airliners not to increase prices when a certain airliner carrier had its licence temporarily suspended for a few days. A case entirely unrelated to the pandemic.

So, with a lower standard against which to prosecute excessive pricing cases and the introduction of a reverse onus on the respondent to demonstrate that its prices are not excessive (in particular instances), coupled with a potentially much lower threshold against which to find a firm is “dominant” than traditionally the case, we expect to see more excessive pricing complaints being pursued.