Zimbabwean leader lauds antitrust efforts

Zimbabwean President Emmerson Mnangagwa recently exalted the benefits of antitrust law at a joint COMESA-CTC (Competition and Tariff Commission of Zimbabwe) conference for sitting judges, held in Victoria Falls. Below is an excerpt of his oral remarks, given at the opening of the event:

“Competition and consumer protection laws, are therefore, key enablers of free, open and liberalised trade between countries and foreign regional integration. Against this backdrop, these laws must continue to enhance consumer interests and the realisation of our country’s development aspirations as set out in the National Development Strategy and Vision 2030. To this end, under the radar are the cartels, and all those who collude in promoting unjustified price increases, illicit activities and currency manipulation for the purposes of realising super profits.

Andreas Stargard, a competition partner at Primerio Ltd., notes that President Mnangagwa was once a practicing attorney himself, prior to his political ascent within the ZANU-PF party, although the precise history of the president’s legal studies and degrees remains somewhat murky. “As a former legal practitioner himself, Mnangagwa knows that an educated judge is a better judge. Thus, his admonition to the members of the judiciary present at the conference (at whom the event was aimed in the first place) to better acquaint themselves with competition law & economics was timely and meaningful,” he said. Stargard adds: “There is hardly anything more frustrating than presenting an antitrust case — which is usually difficult in its own right — to an uninformed judicial decision-maker, who shows little understanding or interest in the subject-matter, or who dismisses economics as extraneous; you cannot practice competition law without an understanding of economics.”

The president concluded: “In our case as Zimbabwe, competition law and the attendant robust policy frameworks are important towards the speedy realisation of Vision 2030, of becoming a prosperous and empowered upper middle income economy. This aspiration will be attained through an effective empowered and agile judicial system, which strives for fairness and increased efficiencies across all the productive sectors of the economy. It is, therefore, most opportune that this workshop is taking place at the stage when our economy is transitioning from stabilisation to growth. To this end judicial staff must be kept updated and knowledgeable about activities taking place in industry and commerce. Undoubtedly, judges and other related stakeholders remain key to the interpretation of competition and consumer protection laws. The intricate nexus between the interpretation and enforcement of laws across sectors of the economy cannot be overemphasised. The judiciary should also address competition issues that arise in disputes before the judicial system. This is pertinent more so that competition law intersects with many fields hence training such as this one is an essential requirement in modern day competition law.”

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…”

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.

COMESA antitrust workshop addresses AfCFTA

The COMESA Competition Commission (CCC), under the leadership of its CEO and Director Dr. Mwemba, organised its first “Emerging Trends in Competition and Consumer Law Enforcement in the Wake of Regional and Continental Integration” workshop in Zambia, targeting legal practitioners across and outside Africa. Its objective is to discuss various issues in competition and consumer protection law enforcement at national, regional and continental level including emerging issues such as the African Continental Free Trade Area (AfCFTA).

Michael Currie, a competition partner at Primerio, said of the event, “Great to be participating at the COMESA Competition Commission’s first Workshop dedicated specifically to legal practitioners, hosted here in Livingstone. It was informative, and simply good to be travelling, meeting old friends and colleagues and seeing world heritage sights all in a few days work. This is an important initiative by the CCC as it expands its advocacy and enforcement initiatives across the Common Market. Important topics on the agenda including updates on the CCC’s approach to penalties, settlement procedures and investigations as well as the more robust merger regime in place. Thank you Willard Mwemba for the invitation and congrats on a well-organised event!”

New CCC Chief addresses World Competition Day, lays out future of COMESA antitrust policy

As we previously reported, long-time COMESA Competition Commission executive, Dr. Willard Mwemba, was recently promoted to his new role of permanent CEO of the CCC, after having been appointed Acting Director in February of this year. In this new capacity, he recently gave a thus-far unreported speech on the occasion of “World Competition Day” on December 5th, 2021.

In his short address, Dr. Mwemba lays out the mid-term future he envisions for the antitrust policy under his aegis in the Common Market, as follows.

Highlighting the importance of competition law for efficient and fair markets, with the goal of benefiting businesses (as opposed to being perceived as an impediment to business interests), Mwemba mentions key building blocks of the CCC’s enforcement going forward. These include resale-price maintenance and exclusive-dealing enforcement (around 1-1:30 in the little-known video, which has thus far only garnered two dozen views on the YouTube platform and is not yet published on the CCC’s own web site). He then moves on to merger regulation (2:45 onward), and further discusses the importance of the effectiveness of the actual competition law itself — noting that the CCC plans to amend its Regulations and Guidelines within the next year (3:40). Noting that the CCC cannot undertake this process very well alone, Mwemba highlights the cooperative approach of the Commission, partnering with and relying on other groups and stakeholders (such as the COMESA Women in Business group, OECD, and others).

Mwemba notes that the CCC’s “focus for the year 2022 will be on strict enforcement, especially against blatant anti-competitive conduct and blatant violations of the COMESA Competition Regulations, and in this case I mean cartels.  It is said that cartels are the supreme evil of antitrust … because it robs consumers, government, and businesses of huge sums…  So in line with this theme, our focus for 2022 shall be on cartels, and we shall make sure that we weed out all possible or potential cartels operating in the Common Market.”

The CCC chief concludes his address by saying that competition authorities “are not there to frustrate businesses, we are not the enemy of business”; instead, he sees the CCC’s role to ensure that markets operate fairly for all — a welcome reminder to the southern and eastern African business community to understand and embrace the precepts of antitrust law as an efficiency-enhancing mechanism for trading in the Common Market.

Dr. Willard Mwemba confirmed as CEO

APPOINTMENT OF DR WILLARD MWEMBA AS THE DIRECTOR AND CHIEF EXECUTIVE OFFICER OF THE COMESA COMPETITION COMMISSION

 November 15th, 2021  Competition CommissionFacebookTwitterShare

PRESS RELEASE

 APPOINTMENT OF DR WILLARD MWEMBA AS THE DIRECTOR AND CHIEF EXECUTIVE OFFICER OF THE COMESA COMPETITION COMMISSION

 The COMESA Competition Commission (the “CCC”) wishes to inform the general public that the COMESA Council of Ministers at its 42nd Meeting held on 9th November 2021 appointed Dr Willard Mwemba as its Director and Chief Executive Officer.

The Commission’s Board, Management and Staff members wishes to congratulate Dr Mwemba on his well-deserved appointment. Dr Mwemba has been with the CCC since January 2013 being its first Head of the Mergers and Acquisitions Department until his appointment as the Acting Director and Chief Executive Officer on 1 February 2021. He has acted in this capacity until 9 November 2021 when his appointment was confirmed. Prior to joining the CCC, Dr Mwemba was the Director of Mergers and Monopolies at the Competition and Consumer Protection Commission (CCPC), Zambia.

Dr Mwemba has been instrumental in the enforcement of competition and consumer laws both at national and regional level. At national level, he has assisted a number of national competition authorities in developing and operationalising their mergers and restrictive business practices divisions. At regional level, he has been instrumental in implementing and reforming the COMESA Competition Law regime.  He has written extensively on competition law and is widely consulted on the subject at global level.

Dr Mwemba holds several qualifications among them Bachelor’s degrees in Economics and Law from the University of Zambia. He also holds a Master’s degree in Competition Law from Kings College London. He further holds a PhD from the University of Cape Town specializing in competition law.

The Board of Commissioners, Management and Staff members of the CCC have great confidence in Dr Mwemba’s capabilities and wishes him well as he executes the mandate of enhancing intra-COMESA trade through the creation of competitive markets.

CCC draft Guidelines (no. 3/3): Penalties

COMESA Competition Commission (“CCC”) seeks input on draft guidelines for determination of administrative penalties.

In this article in a three-piece series, we discuss the Determination of Administrative Penalties Guidelines draft, which has been published (in addition to the Hearing Procedure and Settlement Guidelines). The draft Guidelines comment period expired today, 12 November 2021.

The Guideline establishes a two-step methodology when determining a fine to be imposed on undertakings. The first step will see the Commission set a “base amount” for each undertaking or association of undertakings. The second step provides the Commission with the necessary discretion to adjust the base amount, either upwards or downwards, having consideration of any aggravating, mitigating or any other factors (Section 5(1)(a)-(b)).

The “base amount” will be set with reference to the undertaking’s turnover in the Common Market from the previous financial year and by applying the following methodology:

  • The base amount will be a proportion of the turnover and will depend on the nature, degree and gravity of the infringement and multiplied by the number of years of the infringement (Section 5(8)).
  • The Guideline deems the following as aggravating factors:
    • Nature and gravity of the infringement (Section 5(10)(a));
    • Duration of infringement(Section 5(10)(b));
    • Extend of consumers affected in the Member States and any action taken by the company to mitigate or remedy the damage suffered by consumers (Section 5(10)(c)).
  • The Guidelines propose the following base proportion of turnover to be applied:
    • Cartel conduct: a base of 5% of turnover;
    • Other horizontal conduct: a base of 4% of turnover;
    • Abuse of dominance: a base of 3% of turnover;
    • Restraints: a base of 2% of turnover;
    • Consumer protection violations: a base of 1% of turnover;
    • Mergers implemented in contravention of the Regulations: a base of 2% of turnover;
    • Failure to cooperate with the Commission: a base of 0.5% of turnover; and
    • Other infringements: a base of 0.5% of turnover.
  • The following aggravating circumstances may result in the increase of the base amount:
    • Continuation or repeat of the same or a similar infringement: basic amount will be increased by 3% of the amount of the fine for each infringement;
    • Refusal to cooperate with or obstruction of the Commission’s investigation: basic amount will be increased by 5% of the amount of the fine;
    • Where an undertaking is a leader in, or instigator of the infringement: basic amount will be increased by 4% of the amount of the fine.
  • The Commission may reduce the basic amount if the following mitigating factors exist:
    • Cooperation: decrease in the basic amount by 5% of the fine;
    • First offender: decrease in the basic amount by 3% of the fine;
    • Justifications on efficiency and consumer benefit: decrease in the basic amount by 0.5% of the fine;
    • Termination of the infringement: decrease in the basic amount by 0.5% of the fine;
    • Negligence: decrease in the basic amount by 0.1% of the fine; and
    • Extent of involvement in the infringement: decrease in the basic amount by 0.5% of the fine.

A reduction of a fine could be granted, upon request, solely on the basis of objective evidence that the imposition of the fine would irretrievably jeopardize the economic viability of the undertaking concerned and cause its assets to lose all their value (Section 5(21)).

COMESA Competition Commission logo

CCC draft Guidelines (no. 2/3): ‘Hearing Procedure’

COMESA Competition Commission seeks input on Determination of Hearing Procedure Guidelines

By Gina Lodolo

We previously published an analysis of the regional antitrust enforcer’s recently-published “Settlement Guidelines”.

In this article, we briefly discuss the Hearing Procedure draft which has been published (in addition to the Administrative Penalties Procedure and Settlement Guidelines).  The draft Guidelines have been published for public stakeholder comments due by 12 November 2021. Fundamentally, the COMESA Competition Commission (“CCC”) emphasizes that, during its investigative proceedings, the principles of natural justice must be adhered to, in the sense that the parties have the right to be heard.

Hearings will be conducted during either of the following stages:

  1. The hearings during the investigations process;
  2. Hearing by the Director before publication of notice of compulsory recall of defective goods; and
  3. Hearing before the Committee for the Initial Determination (“Committee”) of cases.

The CCC notes that in regard to hearings for the initial determination of cases, hearings are not intended to be the major source of information because the primary method of information gathering will be gleaned from responses received from the
“Notice of Investigation” that will first be sent in terms of  Article 21(6)(a) and 22(1) of the Regulations.

When will the CCC hold hearings?

  1. May hold hearings during investigations (at any time);
  2. Shall hold a hearing:
    • Before making recommendations;
    • Before taking decisions; and
  3. (In its consumer-protection role only:) Before the CCC publishes a notice of a compulsory product recall.

Hearing procedure once it has been determined that a hearing will be held

  1. The CCC shall give fifteen working days notice to all of the parties involved;
  2. A notice will be published to invite interested parties;
  3. Notice of the main issue must be given within ten working days and will provide the main issues identified and the main questions that will be raised (any other questions may still be raised at the hearing as long as “they are reasonably related to the matter under investigation.

During the Hearing

  1. The Committee will test the evidence before it and interrogate the CCC’s team that conducted the investigation.
  2. The party under investigation will also be provided the opportunity to:
    • Clarify and develop the evidence that it provided during the investigation;
    • Comment on and rebut evidence and information supplied by other parties; and
    • Make further representations, which may, in relevant cases, address the question of whether a practice has public benefits that may offset any adverse effects on competition.

After a Committee has been convened to hear the matter:

  1. Any party required to attend the hearing must be given twenty-one days’ notice of the hearing date.
  2. Upon application by a party, a pre-hearing can be requested to confirm that all of the parties can attend the hearing and have received all documentation relied on by the other party.

After the conclusion of the hearing, a decision will be made by the Committee within forty-five days. If the Committee finds that the respondent has breached the Rules or Regulations, in “appropriate instances” a remedy can be discussed.

Any party has a right of appeal and will do so in accordance with Rule 24(d), (e) and (f) of the COMESA Rules, 2004.

CCC seeks input on Settlement, other, Guidelines

The Agency is seeking stakeholder comments with a deadline of Nov. 12th, 2021. The (draft) Settlement Guidelines are modeled expressly after European and Zambian precedent (as opposed to U.S.-American law, which is not mentioned as a source), and include key provisions that lay out the procedure envisioned by COMESA.

In this article, we discuss the Settlement Guidelines draft, which has been published (in addition to Hearing Procedure and Fines Guidelines). Key elements for a respondent party entering into the Settlement procedure outlined in the draft include:

  • Settlement (negotiations) may occur “before or after having sight of the Commission’s case.” (Section 3.7);
  • that any settlement, other than in Article 20 proceedings, must include an admission of liability (Section 4);
  • settlements are to achieve “procedural efficiency” and the “possibility of setting a precedent.”  (Ibid.);
  • a rather onerous 4-factor list of requirements demanded of parties opting for a settlement procedure, including (a) liability acknowledgement, (b) commitment to pay CCC’s fines or other remedies imposed pursuant to the Regulations (with an understanding that the party has been made aware of the maximum fine amount previously), (c) acknowledgement of procedural transparency, and (d) agreement not to seek additional access to the file or request further hearings on the matter. (Section 6);
  • both the CCC as well as the affected party may withdraw from the procedure, with notice (Ibid., points 3-6);
  • submissions made during the settlement procedure are not publicly available (nor to complainants), instead they are only made available for viewing (not copying) to other addressees of the investigation who are not settling (Ibid., point 7);
  • COMESA member state competition authorities (NCAs) will be sent copies of the settlement submissions, under the same safeguard rules (Ibid., point 8);

Section 8 covers CCC investigations pursuant to all Articles other than Art. 20, i.e., Arts. 18, 21, and 22 investigations brought by the Commission.  It lays out a time frame and procedure akin to what AAT perceives as a “quasi-leniency regime”, as it requires similarly onerous commitments: admission of liability, full disclosure of evidence related to the conduct at issue and its “implementation”, as well as a commitment to cease and desist from engaging in the conduct.  The respondent party is subject to strict gag orders of non-disclosure of materials obtained during the investigation and settlement procedure, and it may propose “undertakings” to the CCC, which the Commission is not obligated to accept (point 7).

COMESA Competition Commission logo

The draft Settlement Guidelines highlight “efficiency, absence of subsequent litigation, and savings on resources” as three incentives for settlement (Section 12), although it is unclear to us how the CCC envisions to achieve legal certainty as to the second factor, namely protecting the settling respondent(s) from future follow-on litigation in other jurisdictions outside COMESA.  Clarity in this regard will be required, as this promise appears to be unenforceable as an extraterritorial application of the COMESA Regulations and Guidelines.