The booming voice of eminent antitrust scholar and GW Law professor Bill Kovacic easily surmounted the small technical microphone glitches at COMESA’s celebration of its Competition Commission’s first 10 years in Malawi (#CCCat10years), giving the keynote address.
His accessible speech, given in front of a diverse audience comprised of senior ministers and policy makers, lawyers, enforcers, and media representatives, focused on practical examples covering three key topics of public expenditures, subsidies, and the removal of entry barriers.
On state spending, he noted the attendant “global epidemic of collusion and corruption”, in areas as simple, but important to development, as transportation infrastructure. “We don’t always need to debate ‘digital markets’ or ‘big tech’, we can also highlight the importance of basic road-building on increasing trade and measurably growing economies” across Africa. But these areas of public expenditures are invariably hampered by corrupt or collusive tendering and similar cartel conduct — important focus areas for the COMESA CCC to enforce.
In the area of public subsidies, Kovacic proposed a future collaborative working relationship between antitrust enforcers, legislators, and those ministries that allocate state subsidies, ideally to non-incumbents (giving the NASA vs. Space-X example to make his point) so as to enhance market entry.
The CCC should enhance market access by making barriers to entry “more porous” for newer small competitors, with Kovacic using the famous 1982 Bell Telephone/AT&T U.S. antitrust precedent to highlight the practical value of competition law to society and innovation of new, better, and cheaper products and services.
Anniversary of CCC’s 2013 Creation to be Celebrated, Developments Discussed
Next week, African heads of state, ministers of trade and commerce, the secretary general of the 21-member state COMESA organization, Commissioners, and several heads of various competition agencies across the region, from Egypt to Eswatini & from Mauritius to Malawi, will join antitrust practitioners, legal experts, business people, and journalists in celebrating the occasion of the 10-year anniversary of the COMESA Competition Commission in Lilongwe, where the agency is headquartered.
Of course, AAT will be there to cover it.
As leaders of this august publication will know by now, our authors have followed the development of the CCC since its very beginning: from the nascent stages of having only a rudimentary staff and foundational rule documents, lacking sufficient guidance for practitioners and businesses alike, to the significant developmental stage under its first chief executive officer, Dr. Lipimile, who built out his enforcement team to coincide with the stellar growth of the CCC’s “one-stop-shop” merger notification statistics and attendant agency reviews (hiring economists and lawyers alike from across COMESA member nations) — and culminating, so far at least, in what we have come to call “CCC 2.0”: the latest iteration of the vastly successful multi-jurisdictional antitrust body, now led by its long-term member Dr. Willard Mwemba.
Under Mwemba’s aegis, the Commission has advanced well beyond a mere ‘rubber-stamping’ merger review body, as some had perceived the fledgling agency in its very early years (approx. 2013-15). The triple-C has since then begun to launch serious investigations into price-fixing, monopolization, attempted monopolization, gun-jumping, as well as market allocation schemes and secretly implemented transactions that parties had failed to notify.
While ‘antitrust is on our minds’, we note here for the record that, beyond its “competition” ambit that mostly remains in our focus at AAT, the CCC’s enforcement mission also includes a fairly large “consumer protection” brief, and the agency’s dedicated unit has investigated areas of consumer concern as broad as airline practices, imported faulty American baby powder, online ‘dark’ practices, pay-TV, and agricultural product quality disputes (milk and sugar come to mind) between Uganda and Kenya, to name only a few…
Our publication, together with several of the business journals and newspapers across the southeastern region of Africa, will report in great detail on the events, and possible news, to take place next week. Says Andreas Stargard, a competition practitioner with Primerio International:
“I look forward to hearing from these leaders themselves what they have accomplished in 10 years, and more importantly what they wish to accomplish in the near to mid-term future. In addition, I have a feeling that we may be treated to some truly newsworthy developments: I could imagine there being either confirmation or denials of the circulating rumour that the COMESA merger regime will soon become not only mandatory, but also suspensory. As most attorneys practicing in this arena know by now, the current Competition Regulations are not suspensory, which may be deemed too restrictive by the group’s Secretariat and its agency leadership in terms of its enforcement powers. After all, it is much more difficult to unscramble the egg than to never let it drop in the pan from the get-go!
Also, the CCC may reveal its plans in relation to a leniency programme for cartel conduct, which is plainly in order!”
Beyond that, Stargard surmises, participants at the almost week-long event may be treated to news about the CCC’s thoughts on digital markets, sectoral investigations, and the Commission’s upcoming “beyond-mere-merger” enforcement activities.
Today, the East African reported on a stunning admission by the Chief Executive Officer of Kenyan mobile telco heavyweight Safaricom (itself no stranger to AAT telco competition reporting and proprietor of the massive M-Pesa mobile money network across East Africa). In the article, fittingly entitled “Safaricom rules out price war in Ethiopian market“, the business report quotes Mr. Peter Ndegwa as saying:
“From a pricing perspective, our pricing strategy is generally to be either in line or just slightly at a premium, but not to go for any price competition. The intention is actually generally to be closer to what the main operator is offering, especially on voice.”
Safaricom’s senior exec made his curious confession on a recent investor call. Says Andreas Stargard, a competition attorney with Primerio: “On these investor conference calls, there are usually several analysts and reporters on the line, listening in, and they commonly are also recorded. This would mean there exist clear prima facie evidence and several witnesses to these statements, as reported by the East African source.” He adds: “It remains to be seen whether any of the several competent authorities will investigate Safaricom’s express statement of a de facto ‘non-compete’ between the Ethiopian incumbent and the Kenyan upstart,” with the former (Ethiotel) boasting 54m subscribers, as opposed to the latter’s mere 1m users in-country.
POSSIBLE INVESTIGATIONS
When asked which government authorities would be authorized to investigate Safaricom’s “no price war” policy expressed by Mr. Ndegwa, according to the newspaper, Mr. Stargard noted that, beyond the domestic Ethiopian telecoms regulator, there existed at least two (2) competent antitrust bodies with jurisdictional authority: “For any potentially anti-competitive conduct occurring in Ethiopia that may have a cross-border effect (as mobile telephony usually does — especially with a foreign, here Kenyan, operator involved as well), I could see either the Ethiopian Trade Competition and Consumer Protection Authority (“TCCPA”) or the supra-national COMESA Competition Commission (“CCC“) under Dr. Mwemba’s reinvigorated leadership stepping in.”
As the latter has made clear in several public pronouncements recently, the CCC is poised to continue its non-merger enforcement streak, that is: investigating and prosecuting restrictive business practices, such as cartels and cartel-like behaviour. “We call it, CCC 2.0,” Stargard adds half-jokingly. He notes that both the TCCPA and CCC have all the necessary legislative instruments in hand to proceed with a preliminary investigation on the basis of the above quotes published by the East African:
In Ethiopia, the TCCPA could argue that “expressly avoiding a price war” is possibly in violation of Article 7(1) of the Ethiopian Trade Competition and Consumer Protection Proclamation (“Article 7(1)”), which provides that “(1) An agreement between or concerted practice by, business persons or a decision by association of business persons in a horizontal relationship shall be prohibited if:…(b) it involves, directly or indirectly, fixing a purchase or selling price or any other trading condition, collusive tendering or dividing markets by allocating customers, suppliers territories or specific types of goods or services”.
For COMESA, the CCC has conceivably two legislative tools at its disposal: First, Art. 16 of the Regulations (“Restrictive Business Practices”) prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices which (i) may affect trade between member states, and (ii) have as their object or effect the prevention, restriction or distortion of competition. Provision is then made (in Art. 19(4)) for the Article to be “declared inapplicable” if the agreement, decision or concerted practice gives rise to efficiencies and the like. Importantly, even though Art. 16 also applies to by-object practices, provision is made for an efficiency defence. Second, the CCC could resort to Art. 19 (“Prohibited Practices”), which focusses on “hard-core” cartel-like practices. Art. 19(2) provides that Art. 19 applies to agreements, arrangements and understandings, while sub-sections (1) and (3) provide that it is an offence for (actual or potential competitors) to fix prices, to big-rig or tender collusively, to allocate markets or customers, and the like.
DEFENCES
Safaricom and its domestic competitor (the government-owned, former absolute monopolist, Ethiotel) may of course offer — preemptively or otherwise — a pro-competitive explanation for their alleged “non-compete” agreement. However, in attorney Stargard’s view, such defences must be well-founded, non-pretextual, and they would be well-advised to have contemporaneous business records supporting any such defences at the ready, should an antitrust investigation indeed ensue.
“Indeed, it may appear to the authorities that Mr. Ndegwa’s quoted concession of ‘We won’t compete on price’ may be a sign of capitulation or at least a ‘truce’ between Safaricom and Ethiotel,” he surmises, “because as recently as mid-December [2022], the incumbent monopolist [Ethiotel] had threatened legal action against the Kenyan newcomer, claiming that Safaricom had ‘harrassed’ the incumbent’s customers and caused loss of service due to its actions.” An incoming competitor’s attempt at avoiding a civil lawsuit between it and would-be competitors would, of course, not constitute a legal defence to forming a (formal or informal) non-compete agreement on pricing, he adds.
“We have extensive experience counseling clients on how to successfully — and aggressively — defend against accusations of price-fixing, whether the allegations involve tacit collusion or express price or market-allocation cartel behaviour. While the parties here would likely not have a formalistic statute-of-limitations argument at their disposal, given the recent nature of the conduct at issue, I could imagine there being eminently reasonable ways of showing the harmless nature of the conduct underlying the, perhaps misleading, investor-call statements made by the executive,” he concludes.
The Competition Authority of Kenya (CAK, or the Authority) issued a public notice to members of professional associations who are seeking to set minimum chargeable fees for their members notifying them that they need to comply with the provisions of the Competition Act. The Competition Act (the Act) provides for parties to file an application for an exemption on behalf of any association whose agreements may contravene the Act. Notably, the determination of an exemption application factors in public-interest considerations. In addition to this, when an exemption is granted, the same is not perpetual the period of validity of the exemption is at the discretion of the Authority.
Regulation of professional bodies is governed by different sources under Kenyan law. This can occur either through statutory law or rules issued by the professional bodies themselves. In Kenya we have professional bodies regulated by statute and others are wholly self-regulatory. This in turn brings in the issue of self-regulation and regulation by statute. As such, if a professional body is allowed by law to prescribe fees applicable for certain services offered by members of that association. Therefore, in such an instance then the Authority cannot fault such an association because the actions of the association are sanctioned by the law. In such an instance, the correct course of action would be the Authority to first seek intervention from the courts to declare such activities authorized by the law as unlawful and if successful, then any future activities of the association that involve the prescription of fees will be subject to an exemption application.
In 2017, the Institute of Certified Public Accountants of Kenya (ICPAK) made an exemption application in regard to prescribing of fees charged by its members and the same was rejected by the Authority. Following the rejection of their application ICPAK has opted to bypass the Authority and has begun to push for the prescription of the fees through the law and in 2020, they published the proposed remuneration order. Similarly in 2020, the Engineers through the Engineers board of Kenya also have the draft scale of fees for professional engineering services.
As mentioned above, there is the issue of self-regulation versus regulation by statute. Relevant Kenyan law includes the Statutory Instruments Act, which provides for the making, scrutiny, publication and operation of statutory instruments. Statutory instruments include but are not limited to rules, guidelines or by-laws made in execution of a power conferred by an existing statute. It is important to mention the Statutory Instruments Act because under this law, all statutory instruments are required to carry out consultations with the Authority to establish whether the proposed instrument restricts competition. It is however unclear whether the opinion of the Authority matters because despite complying with this requirement. What would be interesting to watch for now is whether ICPAK is successful in its quest for setting of professional fees there being a gazette notice where the CAK rejected its exemption application over the same subject matter.
Associations that self-regulate fall squarely within the jurisdiction of the CAK and that is why the Authority has in the past successfully pursued contraventions by trade associations like in 2016, the association members in the advertising industry who were involved in price fixing were penalized. This can be compared to the activities of the Law Society of Kenya which are governed by statutes which empower it to recommend to the Chief Justice fees to be charged in relation to certain services offered by its members.
In conclusion, while the CAK may be justified in its quest to reign in the behavior of professional associations that are engaged in conduct that may amount to price-fixing, there needs to be a balance in the approach the CAK takes, where protection of fair remuneration is taken into account while preventing what would amount to abusive conduct. That being said, the CAK should also consider challenging the other laws that are in place that allow the professional associations to engage in conduct that it believes should be subject to an exemption application.
The Competition Tribunal (“Tribunal”) recently handed down a precedent-setting decision in the case of Majid Al Futtaim Hypermarkets Limited vs Competition Authority of Kenya and Orchards Limited which will not only set the scene on how the competition authorities will tackle the enforcement and assessment of buyer power in Kenya but will also have substantial consequences for retailers in Kenya.
In casu Orchards Limited (“Orchards”) alleged that Majid Al Futtaim Hypermarkets Limited (“Majid”) abused its buyer power. Majid is the operator of the supermarket “Carrefour”, which is supplied with probiotic yoghurts by Orchards. Majid was alleged to have abused its buyer power by: transferring commercial risks to Orchards; refusing to receive Orchards’ goods for reasons which could not be ascribed to Orchards; unilaterally terminating or de-listing the commercial relationship without notice and for no justified reason; applying rebates and listing fees marked as discounts; and requiring Orchards to deploy staff as its own cost.
The Tribunal ultimately upheld the Competition Authority of Kenya’s (“CAK”) judgment in finding, inter alia, that Carrefour abused its buyer power in relation to Orchards. While the Tribunal’s decision brings much-needed clarity on various issues, in particular how it will conduct its assessment of buyer power, which represents an area in competition law that has historically been unregulated, the assessment itself appears to only brush the surface in an analysis which typically (and with regard to comparative jurisdictions) necessitates a robust and thorough analysis.
The Commission, in reaching its decision vis-à-vis the existence and abuse of buyer power, based its decision on the Competition Act No 12 (“Act”), the Buyer Power Guidelines under part III of the Act, and international best practice. Section 24(2B) of the Act stipulates that the authority, in determining buyer power, must take into consideration:
“a) the nature and determination of contract terms;
b) the payment requested for access to infrastructure; and
c) the price paid to suppliers”
Section 24(2D) of the Act stipulates that buyer power means:
“…the influence exerted by an undertaking or group of undertakings in the position of a purchaser of a product or service to obtain from a supplier more favorable terms, or to impose a long-term opportunity cost including harm or withheld benefit which, if carried out, would significantly be disproportionate to any resulting long-term cost to the undertaking or group of undertakings.”
Of particular concern is the Tribunal’s approach and rationale in determining whether Majid had buyer power and whether it had abused its buyer power. Importantly, the Tribunal appears to be jumping the gun so to speak in expressing that “…the influence of power of the buyer becomes evident when the buyer engages in the offending conduct” and therefore, “by engaging in conduct which amounts to abuse of buyer power, there’s buyer power”. (our emphasis)
According to the Tribunal, the Act defines buyer power by reference to its effects. In casu, “abuse” was evidenced by, inter alia, declining to renegotiate terms, onerous rebates and listing requirements, and the refusal to take delivery of products that were delivered. This represents a notable departure from traditional competition law assessments of buyer power in various respects. In South Africa, for example, the assessment first centres around the existence of buyer power (which requires the buyer to be dominant), followed by whether there has been an abuse of that buyer power. Michael-James Currie from the Primerio International team notes that the Tribunal has essentially put the cart before the horse and notes that astute competition law counselling requires these trends and policy shifts to be well considered.
By engaging in what appears to be an ex-post assessment, the Tribunal’s judgment does not provide much insight or guidance to parties on how to ensure their conduct is aligned with the relevant provisions or how to negotiate trading terms common to commercial practice without facing potential accusations of abuse of buyer power.
Precedent on “buyer power” is scarce and therefore the precedent set by the Tribunal on the matter is of considerable importance both in Kenya and throughout Africa. When viewed comparatively the legislative framework governing “buyer power” in South Africa differs from the Tribunal’s judgment mainly on the requirement of “dominance”.
Section 8(4)(a) of South Africa’s recently amended Competition Act provides;
“It is prohibited for a dominant firm in a sector designated by the Minister in terms of paragraph (d) to directly or indirectly, require from or impose on a supplier that is a small and medium business or a firm controlled or owned by historically disadvantaged persons, unfair:
(i) prices; or (ii) other trading conditions.”
Contrastingly, the Buyer Power Guidelines under Kenyan law state:
“It is not necessary for the buyer to have a dominant position in the market. Although the provisions of abuse of buyer power are included under the provisions of abuse of dominant position, when assessing conduct that amounts to abuse of buyer power, proof of dominance is not a mandatory criteria.”
Additionally, the Tribunal did not undertake a robust assessment of the relevant market, or an analysis of potential foreclosure concerns, consumer welfare or efficiency. Rather, and instead of focusing on anti-competitive effects (which jurisdictions such as South Africa undertake), the Tribunal appeared to be more concerned with fairness to suppliers.
What remains to be seen is how the Tribunal will distinguish between, inter alia, those buyers who extract favourable trading terms by virtue of being dominant in the market vs those buyers who are not, without first undertaking a comprehensive assessment of the buyer’s position in the market.
This judgment, being the Tribunal’s first in relation to the abuse of buyer power, will shape the way in which buyer power will be assessed in Kenya. As such, it is vital that the competition authorities provide comprehensive guidance and much needed certainty to businesses.
The latest episode #122 of Sheppard Mullin’s popular NOTA BENE podcast features Primerio’s Andreas Stargard, exploring “Africa Q2 Check In: Economic Growth and Relevance.”
Africa continues to strive for economic growth through various trade partnerships and foreign investments, but long-standing challenges remain an impediment in certain respects. Is Twitter’s decision to open an African base in #Ghana any indication of the continent’s economic potential? We’re joined by #Africa competition and markets expert, Andreas Stargard, a co-founding senior member of Primerio Ltd., as he shares insights on Africa’s economic outlook in Q2 of 2021.
You can listen to it for free on all major ‘podcatchers,’ including here:
As the local Daily Monitor reports, landlocked COMESA member state Uganda — ruled since January 1986 by authoritarian president Museveni — has failed to make requisite payments under the COMESA Treaty to the supra-national regional organization. Its arrears date back over two years, according to sources, and amount to roughly U.S. $4 to 5 million. Arrears carry with them a 1% per annum interest rate.
COMESA’s Secretary General has officially reprimanded the Ugandan government and placed the nation on the organization’s “sanction bracket.”Andreas Stargard, an attorney with Africa boutique law firm Primerio Ltd., notes that being sanctioned carries with it the nation-state’s loss of all privileges of COMESA membership, including its key free-trading benefits, during the duration of the sanctions being imposed. “It also means that Ugandan officials are not permitted to address official COMESA bodies, nor are Ugandan citizens permitted to be appointed to, or hired by, COMESA organs. It remains to be seen whether this suspension of Uganda will impact competition-law enforcement in any direct, appreciable way — what comes to mind is merger notification and the impact that Uganda’s being sanctioned may have on cooperation between the CCC and Ugandan authorities.”
The outstanding debt is all the more concerning as Museveni’s administration, in an attempt to cling to power after 35 years, recently reportedly spent large sums out of the state’s coffers on military-grade weaponry to prepare for the chaos precipitated by the recent hotly-disputed elections.
February 17th, 2021: TODAY, the COMESA Competition Commission (“Commission”) released the following statement, wishing “to inform the general public that the tenure of office of Dr George Lipimile who was the Director and Chief Executive Officer of the Commission for the past ten years, came to an end on 31st January 2021.“
Dr Lipimile was appointed by the COMESA Council of Ministers as the first Director and Chief Executive Officer of the Commission in February 2011. He served in this capacity at the Commission for ten years during which time he played a pivotal role in the establishment of the Commission as the first fully operational regional competition authority in Africa and the second fully functional regional competition authority in the world after the European Commission. Dr Lipimile tirelessly worked towards the enforcement of the COMESA Competition Regulations and Rules. He dedicated his time at the Commission in strengthening the institution with but not limited to:
Growth in its staff compliment;
Creating sound legal framework;
Processes and Procedures for enforcement of the Regulations;
Advocacy and technical assistance to COMESA Member States; and
Setting up the necessary corporate governance systems.
Further, the Commission wishes to announce to the general public that Dr Willard Mwemba has been appointed as the Acting Director and Chief Executive Officer of the Commission from 1st February 2021 until such time the substantive Director of the Commission is recruited. The Commission wishes to congratulate Dr Mwemba on his appointment as the Acting Director and Chief Executive Officer of the Commission.
Incoming Mwemba & outgoing Lipimile
Andreas Stargard, a Primerio competition lawyer who knows both men from having notified transactions to the CCC as well as socially, says that “an era is now concluded — namely the ‘Genesis Era’ of the CCC, as George was its very first, and thus formative, leader. That said, I am deeply assured by the appointment of Dr. Mwemba to his post as acting Director, as he is of utmost competence and I have no doubt will guide the Commission in the right direction in this new ‘CCC 2.0 Era’ after Dr. Lipimile’s departure.”
Africa is a continent of 1.2 billion people. From a consumer potential standpoint it matches China or India. Yet historically, it has suffered from the lingering shadows of its colonial past, in addition to its current fractures, hostility, and ever-present corruption.
The continent is emerging fast, however, and is quickly accelerating into the 21st Century marketplace both from an investment and growth opportunity. From the digital revolution and increased free trade, to innovation in various industries, Africa may be the next market frontier to unfold into accelerated multinational presence.
In this podcast episode (available gratis on Apple, Spotify, and Sheppard Mullin‘s web site), Michael P.A. Cohen is joined by Africa competition and markets expert, Andreas Stargard, as he shares his insight to help multinationals navigate the African landscape.
What do the Africa markets look like from a multinational business opportunity perspective?
Which countries in Africa have established markets? Which ones have growth potential?
How and why has China’s investment and influence across Africa intensified over the last couple of decades?
What type of digital revolution is taking place in Africa?
Is there a huge opportunity for mobile money on the continent?
How is free trade shaping up across the African continent? How do the AfCFTA’s goals tie in?
What Free Trade cooperation agreements exist among the East, West and South African nations? Will they succeed?
Where is Africa leading innovations?
How will African wars and corruption impact its ability to grow a multinational marketplace?
Who’s speaking:
Michael Cohenis the creator of the Nota Bene podcast. He began his career as an Assistant Special Prosecutor, investigating and prosecuting organized crime involvement with the failure of local financial institutions in the early 1990s, and has since practiced globally at several top law firms. In 2015, Michael joined Sheppard Mullin’s storied antitrust practice with a goal of putting his 25 years experience to work to complement the firm’s longstanding antitrust litigation group, helping to bridge government antitrust enforcement in Washington, D.C. to the firm’s strengths in Brussels, San Francisco and Los Angeles.
A co-founding senior member of Primerio, a business advisory firm helping companies do business within Africa from a global perspective, Andreas Stargard is legal, strategic, and business advisor to companies and individuals across the globe. He focuses on antitrust and competition advice, white-collar counseling, contract dispute and negotiation, and resolution of global business disputes, including cartel work, corruption allegations and internal investigations, intellectual property, and distribution matters. He has written and spoken extensively on these topics and many others. Andreas also advises clients on corporate compliance programmes that conform to local as well as global government standards, and has handled key strategic merger-notification questions, including evaluation of filing requirements, avoidance strategies, cross-jurisdictional cooperation, and the like.
Following the (thus far rarely used) “Block Exemption” procedure under Section 30 (2) of the Kenyan Competition Act, the Competition Authority of Kenya (“CAK”) has proposed a new set of draft Guidelines as to competitor collaborations during the COVID-19 pandemic, so as to assist with the country’s economic recovery efforts. It specifies five (5) focus sectors, namely Manufacturing, Private Healthcare, Aviation, Travel & Hospitality, and Health Research. The Guidelines are ostensibly inapplicable to firms that engage in economic activity outside these five sectors.
In issuing its soon-to-be finalized guidance, the CAK wishes to provide “direction to undertakings in making a self-assessment as to whether the agreements, decisions or practices which they intend entering into will qualify for block exemption within the Covid-19 Economic Recovery Context without the need to seek the Authority’s intervention.” (A.(4))
A key aspect, in the view of antitrust litigator Andreas Stargard, is the renewed attention given to “public-interest factors” in competition law.
He believes that this concession to non-traditional competition-law theory is “necessitated by the broad economic havoc COVID-19 has wrought, including on historically peripheral-to-antitrust aspects such as overall employment, public health, en masse business closures, and the like, which would normally not be highly relevant factors in the strict sense of conducting a rigorous competition-law analysis.”
Stargard continues that “Condition III of the CAK’s so-called ‘Self-Assessment Principles‘ expressly highlights this element, namely forcing firms to evaluate whether their proposed collaboration with competitive entities is ‘in the public interest, such as creation of employment’,” citing para. 11(vii) of the draft Block Exemption Guidelines on Certain Covid-19 Economic Recovery Priority Sectors.
The CAK’s proposal thus strongly echoes what its regional sister authority, the COMESA Competition Commission (“CCC”) openly discussed as early as July of last year. As we wrote in our assessment of the official CCC staff’s thoughts on competition enforcement amidst the pandemic in 2020:
The concept of non-competition factors (i.e., the public-interest element) was also raised, as there is a “growing debate on whether the pandemic may necessitate changes in [the] substantive assessment of mergers, e.g., towards more lenient consideration of failing firms.”
As Andreas Stargard observes, “just as COVID-19 is truly global, Kenya and COMESA are likewise not alone in their quest to master the difficult balancing act between sufficiently enforcing their domestic or regional antitrust laws versus allowing reasonable accommodations to be made for necessary competitor collaborations in light of the pandemic’s impact. Indeed, other enforcers have also made accommodations for such unusual collaborative efforts, given the emergency nature of the pandemic.”
In the U.S., the federal antitrust agencies have issued analogous guidance for competitors, issuing a joint guidance document specifically on health-care providers collaborating on necessary public-health initiatives. What stands out is the agencies’ express invitation for health-care players to take advantage of the (now-expedited to 7 days’ turnaround time) business-review/opinion-letter procedures. Mr. Stargard notes however that, unlike the Kenyan proposal of “self-assessment“by the affected entities, the American approach still necessitates an affirmative approach of the enforcers by the parties, seeking official sanctioning of their proposed cooperation by submitting a detailed explanation of the planned conduct, together with its rationale and expected likely effects.
By way of further example, in Canada, as the OECD notes, the government “has developed a ‘whole-of-government action’ based on seven guiding principles including collaboration. This principle calls on all levels of government and stakeholders to work in partnership to generate an effective and coherent response. These principles build on lessons learned from past events, particularly the 2003 SARS outbreak, which led to dedicated legislation, plans, infrastructure, and resources to help ensure that the country would be well prepared to detect and respond to a future pandemic outbreak.”
African Antitrust & Competition Law 