Category: commissioners

Breaking: CCC withdraws its recent Merger Practice Note

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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To remind our readers, we had previously reported on AAT as to this (now rescinded) note as follows (Feb. 11, 2021):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 CCC Chief addresses World Competition Day, lays out future of COMESA antitrust policy

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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

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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.

Kariuki gets World Bank advisor post

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Competition Authority of Kenya (CAK) Director-General Francis Wang’ombe Kariuki, MBS, will serve on the panel and contribute to its annual publication, the “World Development Report” for the upcoming calendar year. An archive of the Bank’s prior Reports is available for review here.

The Kenyan WallStreet publication quotes Kariuki as saying:

“The appointment takes cognizance of the fact that competition law enforcement has a role to play in poverty alleviation and that data is a highly-prized asset among companies, which can be leveraged for [either] development or socioeconomic harm. … Private firms may use data to deter the entry of upcoming firms, thereby limiting or preventing competition to the detriment of the consumers, specifically eroding their purchasing power and choice.”

Kariuki is a former COMESA Competition Commission Board member and a founding member and first chairman of the African Competition Forum.

COMESA seeks replacement for CCC’s Dr. Lipimile

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The COMESA Competition Commission has announced that it is accepting applications for the position of Director of the CCC until the end of October.  Says Andreas Stargard, an antitrust practitioner with Primerio Ltd.:

“The post is currently held by Dr. George Lipimile, the agency’s first and, therefore by definition, most influential chief.  Dr. Lipimile has certainly steered the comparatively young Commission into the right direction during its formative years, notably overseeing a complete makeover of the merger-notification procedure early on in the process, after much criticism of the initial system.

We are curious to see who will replace him in March 2021, as Dr. Lipimile’s term expires at the end of February.  Will it be a true competition-law expert, or will it be a politically-motivated appointment made by the COMESA Secretariat, pushing for someone who is more of a trade lawyer or, worse, economic protectionist.  What the CCC needs now to continue gaining international recognition and respect (from its peer agencies, as well as from commercial parties!) is a qualified antitrust attorney who understands the law & economics aspect of competition practice, and who will apply these principles neutrally throughout the COMESA region!”

Dr. Lipimile
George Lipimile, CEO, COMESA Competition Commission

Back in 2015, we quoted Mr. Stargard as follows, suggesting a path forward for the agency:

“If the CCC steps up its enforcement game in the non-transactional arena, it could become a true force to reckon with in the West.  I can envision a scenario where the CCC becomes capable of launching its own cartel matters and oversees a full-on leniency regime, not having to rely on the ‘follow-on enforcement’ experience from other agencies abroad.  The CCC has great potential, but it must ensure that it fulfills it by showing principled deliberation and full transparency in all of its actions — otherwise it risks continued doubt from outsiders.”

It remains to be seen who the Director’s replacement will be and which of these topics will dominate her or his agenda, if any.  The Director’s term is for 5 years, offering a salary of between $70,000 and $83,000.  Details on the opening can be found here.  Only Member State nationals can apply.  Interestingly, COMESA member states’ antitrust enforcers likewise posted the announcement on their individual web sites:

COMESA Competition Commission: 2019 Regional Sensitization Workshop

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On 9-10 September 2019, the Comesa Competition Commission (CCC) hosted its 6th  “Regional Sensitization Workshop for Business Reporters on Competition Law and Trade Developments within the Common Market” workshop in Nairobi, Kenya as part of its advocacy initiative to promote competition law and enforcement activities across the COMESA region.

AfricanAntitrust, having attended last year’s event, was again invited to attend the event and senior contributor and competition lawyer, Michael-James Currie, attended the event on behalf of AAT and participated in a serious of panel discussions and informal interactive sessions with members of the CCC and Competition Authority of Kenya.

Attendees

The workshop was well attended with a year on year increase in attendees reflecting the importance and popularity of this initiative. The CCC should be congratulated on a well organized and structured workshop.

Patrick Okilangole, Board Chairperson of the CCC, opened the event by highlighting the importance of competitive domestic markets to  “realize the benefits of trade; multilateral and bilateral trade agreements recognize the need to guarantee that restrictive business practices do not hinder the positive effects of free trade”.

Protectionist policies was identified by Okilangole as one of the key impediments to effective regional growth and trade. More specifically, Okilangole highlighted the following consequences of protectionist policies:

“(i)     Ineffective competition policy frameworks. Over the past few years, competition law has been enacted in several Member States of the Common Market. However, in some countries, competition frameworks have included:

(ii)      unjustified and discretionary exemptions, for example, utilities managed by the state in key economic sectors,

(iii)     lack of sufficient investigative powers and tools in the current national and regional legislation to deter anticompetitive behaviour,

(iv)    lack of independency in decision making since competition agencies report to and their decisions may be vetoed by a ministry, and

(v)     significant government intervention in markets such as price controls in potentially competitive markets, controlling essential products, margins, and geographic areas.”

Okilangole reaffirmed the true hallmark of an effective competition law regime, namely that competition law should be focused on protecting the competitive process and not a particular competitor. “The rules are not meant to punish large companies on account of their size or commercial success. The key feature of the competition rules is to create a level playing field for all business players in the market.”

Okilangole’s remarks were echoed by the Chief Executive Officer of the CCC, George Lipimile who emphasised the need to move away from protectionist policies in order to realise the benefits that flow from increased regional trade.

Restrictive business practices, particularly abuse of dominance practices and collusion were identified by Lipimile as being particularly prevalent within COMESA and that increased enforcement activities are required, both by the CCC and regional agencies, to detect and prosecute anti-competitive behaviour.

The workshop was also used as an opportunity to present and engage on the CCC’s Guidelines on Restrictive Business Practices (which were approved in April 2019). The objective of the Guidelines is to provide greater clarity, predictability and transparency in relation to the analytical framework which will be used to evaluate alleged anti-competitive conduct. The Guidelines also provide greater guidance on the process and circumstances in which the CCC may grant exemptions.

The CCC was well represented (so to was the CAK) and senior investigators, analysts and members from the executive team provided useful insights into the enforcement activities of the CCC as well as what lay ahead in the pipeline. Attendees were invited to engage, debate and where appropriate raise concerns regarding the efficacy of competition law enforcement in COMESA. It is this willingness to be open and engage proactively with constructive criticism which is perhaps the hallmark of this CCC initiative and certainly welcomed by the attendees.

As to enforcement updates, the CCC put together comprehensive presentations both in relation to merger control and restrictive business practices more generally. We highlight some of the more noteworthy developments below.

Merger Control

Willard Mwemba, manager of mergers and acquisitions at the CCC, confirmed that over 230 transactions have been notified to the CCC between 2013 and July 2019. Of these, 17 were approved subject to conditions.

From a merger trend perspective, the CCC witnessed an increased shift in merger notifications in traditional sectors, such as agriculture and construction, to emerging sectors such as energy, banking and financial services with the most active member states including Kenya, Zambia, Mauritius, Zimbabwe and Uganda.

As to merger activity in COMESA, Mwemba confirmed that there has been a decrease in merger activity in the first half of 2019, largely as a result of a decrease in global activity and that the value of transactions that occurred within the first half of 2019 dropped from USD 527 billion to USD 319 billion for the same period in 2018. This is also consistent with the 19% decrease in the number of notifiable transactions globally.

The combined total turnover value of all mergers assessed by the CCC to date amounts to over USD 110 billion. Although 2019 figures were not presented, the CCC highlighted that total Foreign Direct Investment in COMESA grew in 2016 from USD 18.6 billion to USD 19.3 billion in 2017 representing nearly half of Africa’s total FDI inflows. Again, highlighting the significance of the COMESA market in the global space.

Enforcement Activities

Although the CCC has had an active merger control regime in place for many years, a number of commentators have raised the lack of robustly investigated and prosecuted abuse of dominance or cartel cases as a key hindrance to effective competition law enforcement in COMESA. While the CCC acknowledges that more should be done in this regard, below is a list of non-merger matters which the CCC has concluded in past three years:

Exemptions

Matter Sector Affected Member States
Assessment of the supply agreement between Eveready East Africa Limited and Supreme Imports Limited Lighting bulbs Burundi, DRC, Ethiopia, Kenya, Malawi, Rwanda, Sudan, Uganda, Zambia
Assessment of the supply agreement between Eveready East Africa Limited and Sayyed Engineers Limited Writing implements East Africa
Assessment of the supply agreement between Eveready East Africa Limited and Chloride Egypt SAE Automotive Batteries Burundi, DRC, Ethiopia, Kenya, Rwanda, Uganda
Assessment of the Distribution Agreement between John Deere (Proprietary) Limited and AFGRI Zimbabwe Private Limited Agriculture Equipment Zimbabwe
Assessment of the Distribution Agreement between the Wirtgen Group and the Motor Engineering Company of Ethiopia Agriculture and Construction Equipment Ethiopia
Assessment of the Distribution Agreement between the Wirtgen Group and UMCL Limited Agriculture and Construction Equipment Comoros, Mauritius, Seychelles
Assessment of the Distribution Agreement between the Wirtgen Group and Sodirex SA, Madagascar Road Construction Machinery Madagascar
Application for the Joint Venture Agreement between Kenya Airways PLC, Koninklijke Luchvaart Maatscahppij NV (KLM) and Societe Air France SA Aviation Kenya
Assessment of the distribution agreements between Unilever Market Development (Pty) Limited and Distributors in the Common Market  FMCGs DRC, Madagascar, Mauritius,

Determination of Anti-Competitive Conduct: Procedure of Commission on its own volition

Matter Sector Affected Member States
Investigation into the Distribution Agreements entered into between Eveready East Africa Limited and Clorox Sub Saharan Africa Bleaching agents East Africa
Investigation into the Distribution Agreements entered into between Parmalat SA (Pty) Limited and its Distributors Milk and dairy products Eswatini, Malawi, Zambia and Zimbabwe
Investigation into the Distribution Agreements between Coca-Cola Beverages Africa and Distributors in the Common Market Non-alcoholic beverages Comoros, Ethiopia, Uganda

False or Misleading Representation 

Matter Sector Affected Member States
Misleading Advertising by Fastjet Airlines Limited Aviation Kenya, Uganda, Zambia, Zimbabwe

The CCC also confirmed that they are currently conducting a number of market screening initiatives across priority sectors. Following the conclusion of these screening exercises, the CCC will decide whether to prosecute any firms engaged in restrictive business practices.

As part of the CCC’s efforts in detecting and investigating anti-competitive behavior, the CCC has increased its collaborative efforts with domestic member agencies and has established the “Restrictive Business Practices Network” to increase the efficacy of cross-border cases.

Currie Panel Discussion

[Michael-James Currie speaking on a panel discussion on “How to improve the quality of reporting on regional integration and competition law related matters” facilitated by Mr Mwangi Gakunga from the Competition Authority of Kenya]

Conclusion

In light of the tripartite negotiations between SADC-EAC-COMESA as well as the negotiation of competition policy in terms of the African Continental Free Trade Agreement, it is imperative that the CCC develops an effective competition enforcement regime which assists and incentivizes free trade across the relevant markets. To do so, the CCC must be equipped with the necessary resources to ensure that it has the capacity to effectively execute its policies.

Despite the significant challenges faced by the CCC, it is encouraging to note that the CCC is taking a more robust approach to detecting and prosecuting anti-competitive practices in the COMESA market and are endeavoring to do so in accordance with international best practices.

If the CCC is able to deliver on the objectives and action items which were discussed in detail at the workshop, then there is every reasons to look forward to a more active CCC in the months to come with interesting cases likely to be brought to the fore.

 

 

 

 

 

 

 

COMESA news: Uganda gets on board, fields new CCC Board Chair

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For the small but growing segment of COMESA Competition Commission observers in the world, some recent developments relating to a key member state may have gone unnoticed: the CCC held a training workshop for Ugandan officials, including over 110 ministerial District Commercial Officers, in sensitizing them to competition-law issues, spotting antitrust offences, and catalysing the enactment of robust competition legislation in the East African nation, whose GDP exceeds $25 billion and has exhibited consistent growth over the past several years.

CCC’s Uganda training workshop

Says Andreas Stargard, a competition partner with African boutique firm Primerio Ltd.:

This development of the CCC supporting domestic antitrust enforcement and legislative efforts is not only affirmatively required by the COMESA Treaty, obligating member states to enact legislation comporting with the CCC Regulations, but has long been foreshadowed by CCC officials.

For example, at this year’s region-wide sensitization workshop held by the CCC in Nairobi, Kenya, the agency’s leadership assured me personally that they would undertake these capacity-building programmes throughout COMESA member states, especially those with less-developed competition-law regimes, including Uganda.

CCC Board Chair Patrick Okilangole (Uganda)

Uganda is a key COMESA country that does not have a functioning antitrust enforcement body or underlying legislation.  Mr. Stargard adds that “the CCC’s choice of Uganda as a target jurisdiction may, in addition, also have been influenced by the fact that the current CCC Board Chairman is Patrick Okilangole, a Ugandan national,” whose appointment to the Commission’s Board was recently renewed in July.

#COMESA21: New member states, new commissioners

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#COMESA21

In a milestone enlargement of the (now formerly) 19-member COMESA region, Tunisia and Somalia have acceded to the trade bloc at the 20th COMESA Summit on 19th July 2018, creating #COMESA21 – Africa’s largest free trade region.

Their application to join had been pending since 2016.  Under the Treaty, the new members will be bound by the provisions of the Treaty and must deposit their formal instrument of acceptance of the terms of admission with the Secretary General, together with an instrument of accession pursuant to Articles 194 and 195 of the Treaty with regard to a State admitted to full membership.  Says Primerio’s Andreas Stargard, “with the privilege of membership comes the obligation of agreeing to abide by the antitrust rules promulgated under the COMESA Treaty.  This includes the Competition Commission’s procedural and substantive rules and notably its merger regulations.  It remains to be seen how the still weakened bureaucratic structure of the Somali Republic will be able to implement the strictures of a working competition-law regime…”

Indeed, the CCC’s recent Notice No. 2/2018 provides that “the provisions of the COMESA Competition Regulations of 2004, and its accompanying rules, shall be enforceable in the territories of the Republic of Tunisia and the Federal Republic of Somalia with immediate effect.”

Personnel News 2018

In addition to gaining two new member states, COMESA also underwent personnel changes, adding an experienced antitrust practitioner, Zimbabwean Competition and Tariff Commission director, Ellen Ruparanganda, as one of the nine CCC commissioners, for a term of three years.  Besides Ms. Ruparanganda, Francis Lebon (Seychelles), Ali Hamadou Ali Kako (Djibouti), Thembelihle Dube (Eswatini, formerly Swaziland), Danson Buya Mungatana (Kenya), Michael Teklu Beyene (Ethiopia), Charlotte Wezi Malonda (Malawi), Islam Tagelsir Ahmed Alhasan (Sudan), and Brian Muletambo Lingela (Zambia) were also sworn in.