East Africa, ECONAfrica, ECOWAS, Egypt, Extra-judicial Factors, jurisdiction, Kenya, legislation, Meet the Enforcers, mergers, new regime, Nigeria, no antitrust regime, Patel, predatory pricing, Price fixing, Protectionism, public-interest, South Africa, Tanzania, Uncategorized, Unfair Competition

Beyond Pure Competition Law – Is Africa Leading the Way Forward in Antitrust Enforcement?

To all our Africanantitrust followers, please take note of the upcoming American Bar Association webinar on 2 July 2019 (11amET/4pmUK/5pm CET) titled:

“Beyond Pure Competition Law – Is Africa Leading the Way Forward in Antitrust Enforcement?”

In what promises to be a highly topical (telecon) panel discussion, Eleanor Fox, Andreas Stargard, John Oxenham, Amira Abdel Ghaffar and Anthony Idigbe will:

  • provide critical commentary of the most recent developments in antitrust policy across the African continent;
  • highlight the most significant legislative amendments and enforcement activities in Africa; and
  • analyze some of the key enforcement decisions.

South Africa, Nigeria, Egypt, COMESA and Kenya are among the key jurisdictions under the microscope.

Practitioners, agency representatives, academics and anyone who is an antitrust enthusiast will find this webinar to be of great interest. Not to mention companies actually active or looking to enter the African market place.

For details on how to participate, please follow this Link

 

 

 

 

 

 

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AAT exclusive, legislation, Morocco, Telecoms

Moroccan telecom sector gets competition regulation

AAT has learned that the fledgling Moroccan antitrust regime, which has never quite come off the ground, is now being supplemented in a sector-specific regulation, namely the recently gazetted Droit [Law] no. 121.12.

The new law supplements the competition guidance specifically for telecommunications carriers, including high-speed internet and fibre-optic cable service providers, without repealing the main piece of antitrust legislation (Law no. 104.12 on the Freedom of Prices and Competition), whose key regulatory body — the Competition Council (Conseil de la Concurrence) — only recently became active in December 2018.  Law 121.12 now confers full investigative authority to the National Telecommunications Regulatory Agency (ANRT), which it enables to review complaints of anti-competitive behaviour, roaming agreements between competitors, and the like.

Andreas Stargard, a competition practitioner with Primerio, notes that “the law is primarily focussed on conduct issues and does not cater for any transactional / merger regulation, which remains the province of Law 104.12 and its crucial (and much debated) ‘40% domestic market share’ hurdle for notifications in the Kingdom.”  Stargard notes that the Competition Council’s web site is still — despite the agency’s recent personnel appointments — merely an “empty store-front of a site, without any substantive content.”

The new telecom-specific regulation is likely to have an impact on, and was influenced by, the limited state of play in the sector, which has been dominated for decades by state monopoly Maroc Telecom, whose would-be competitors such as Orange and Inwi have recently filed complaints against the dominant firm, mostly for refusals to deal, being denied access to indispensable networks, roaming agreements, and the like.

Says Stargard: “The new law will take such disputes out of the lengthy judicial process in court and allow the ANRT to investigate and render decisions on its own, including the power to fine up to 5% of a company’s turnover.

We will update AAT once further details become available.

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AAT exclusive, legislation, new regime, Nigeria, Unfair Competition, West Africa

Breaking News: Nigerian Competition Act Signed into Law

Nigerian President Muhammadu Buhari has signed the Federal Competition and Consumer Protection Bill into law (the “Competition Act”).

nigeriaAfter years of deliberations, the legislative process is now complete, and with the establishment of a Competition Commission and Competition Tribunal, Nigeria is the latest African jurisdiction to establish a dedicated antitrust authority.

From a merger-control perspective, the Competition Act and the Commission’s jurisdiction will ultimately supersede the ‘placebo antitrust’ role historically played by the Securities and Exchange Commission (SEC), which has thus far received and assessed merger notifications above certain turnover thresholds, pursuant to the Investments and Securities Act.  The Act repeals the Consumer Protection Act, which did not contain stand-alone antitrust provisions.

Michael-James Currie, a competition lawyer advising clients across Africa, says the new Competition Act applies broadly to all commercial activities within Nigeria, but also to conduct outside of Nigeria (if the person or company is a Nigerian resident or incorporated in Nigeria or products are sold into Nigeria).  Furthermore, any acquisition or change of control of a business or asset outside of Nigeria which results in the change of control of an asset or business in Nigeria will also fall within the jurisdiction of the Competition Act.

The Commission has substantial powers, including considering and approving mergers, declaring business practices as amounting to abuse of dominance, prohibiting price discrimination or declaring unlawful any agreement which is in contravention of the Competition Act.

From an investigatory perspective, the Commission may subpoena witnesses or, upon obtaining a search warrant, conduct dawn raids, consistent with international best practices.

Any reviews or appeals in relation to a decision taken by the Commission may be made to the Competition Tribunal.

In relation to prohibited conduct, any agreement which has the effect or likely effect of preventing, restricting or distorting competition in any market is unlawful. Currie notes that the Act in particular prohibits collusive arrangements but also various forms of unilateral conduct include tying or bundling or limitations on the production or distribution of goods. John Oxenham, director at Primerio, echoes these sentiments and confirms that the Act provides for a rule-of-reason analysis.  He notes further that, in addition to the above general prohibitions, the Act also prohibits minimum resale price maintenance.

Fellow Primerio Director, Andreas Stargard, notes that the “monopolisation” prohibition against abuse of dominance mirrors those typically found in most jurisdictions; the wording of the Act appears to be influenced largely by the South African Competition Act.  That said, the test for dominance is essentially whether a firm is able to exert market power and, unlike South Africa, cannot be based on market-share thresholds alone.  In sum, he concludes:

“This latest piece of competition legislation was first introduced in 2011 by Rt. Hon. Yakubu Dogara from Bauchi State, who perhaps not surprisingly happens to be an attorney, and co-sponsored by Sen. Ahmed Lawan (Yobe North).

Its now final — and successful — iteration that was signed into law this week brings Africa’s largest economy into the fold of modern antitrust jurisdictions.  Many have called for this to happen for years [see hereand here).  Our firm’s West Africa team is eager to work on matters arising under the Act.”

The Bill's sponsor, Rt. Hon. Yakubu Dogara

One of the Bill’s sponsors, Rt. Hon. Yakubu Dogara

In terms of penalties, an antitrust violation attracts both a potential administrative penalty (capped at 10% of the respondent’s annual turnover) and criminal liability for directors who commit an offence, notes Currie, pointing to a  maximum of three years imprisonment as a fairly severe white-collar sentence potential.  It remains unclear to-date whether the turnover calculation for purposes of the administrative penalty determination refers to local or worldwide revenues, observes Stargard.

In relation to merger control, Oxenham notes that the Competition Act provides further clarity as to the type of transactions which require mandatory notification, notably including joint ventures, which were previously not identified by name under the SEC’s legislative regime.  The Act has introduced both de facto and de jure forms of control as potential triggers for merger notification. The Commission has not yet published Regulations which will prescribe turnover thresholds for “small” and “large” mergers. Both Oxenham and Currie point out that based on the wording of the Act, there seems to be a substantial amount of similarity between the Nigerian Act and the merger control process in South Africa including time frames involved and the introduction of public interest assessment in merger control.

This is not surprising, as the South African Competition Commission (SACC) has, through the African Competition Forum, been instrumental in advocating a robust competition regime. Furthermore, Oxenham suggests that there may be substantial amount of cooperation and assistance provided by the SACC to their Nigerian counterparts.

[AfricanAntitrust will provide further updates in relation to the Nigerian Competition Act and appreciates the input from leading antitrust practitioners and the on-going support of the Primerio team. To contact a Primerio representatives, please click here ]

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draft, Ghana, legislation, new regime, no antitrust regime, politics

Ghana slowly inches towards antitrust law

As one of two key West African nation states (the other being Nigeria), Ghana still lacks functioning competition legislation at the close of 2018.  Adding to the chorus of calls for the introduction of a Ghanaian antitrust act, the local branch of the global advocacy group CUTS (“Consumer Unity and Trust Society”), has now asked the government to ensure a currently pending draft competition bill becomes law in 2019.  The bill is, at present, before the Ministry of Justice and the Attorney General’s Department for further consideration, prior to being presented to Parliament.

ghana

Speaking on the topic of “Competing Without Market Rules” at the annual U.N. World Competition (Antitrust) Day, CUTS’ local director is quoted as deploring the absence of any competition policy or law, allowing unscrupulous firms to engage in conduct that would be deemed illegal virtually anywhere else and impeding the proper functioning of the Ghanaian market in the process.

Notably, Ghana’s Minister of Trade and Industry, Alan Kyeremanten, provided a written statement, noting that the country’s government was formulating its approach to competition policy with an eye toward enacting a law that would go beyond the relatively ineffectual Protection Against Unfair Competition Act, dating back to 2000 (Act 589).  Goals of enacting a more effective competition legislation would be to promote private sector development, economic growth, poverty reduction and increasing Foreign Direct Investment.

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BRICS, Extra-judicial Factors, legislation, public-interest, South Africa

SA Competition Act officially amended – serious consequences for businesses

South Africa has amended its antitrust laws, first introduced to the country in 1998 via its Competition Act.  Parliament ratified the amendments (which still have to be rubber-stamped by the National Council of Provinces, a mere formality) yesterday over the serious objections of the opposition parties.  The new law will give significant interventionist powers to the Minister for Economic Development, Ebrahim Patel, as well as introduce lower (or even reversed) burdens of proof for the Competition Commission (SACC) to make its case, after a long-running string of court losses and appellate defeats has seen the SACC’s track record weakened, observers say.

As reported on AAT Monday, a panel of Africa-focussed competition specialists had just recently convened in Johannesburg, warning the South African business community about the high probability of the Bill’s passage, as well as addressing the adverse effects the Bill will have on doing business in South Africa as a medium to large size market player (measured in market share, not merely revenue) or simply as a foreign-owned corporate.

Minister Patel speaks

Minister Patel

Interviewed yesterday in Cape Town, where the Amendment Act was ratified by South Africa’s Parliament, Primerio competition practitioner Andreas Stargard commented: “As we foreshadowed at our conference less than a week ago, the likelihood of the Bill passing was high.  Political, populist pressure was simply too strong for this amendment — which had been introduced as a so-called ‘prioritised bill’ that could be fast-tracked — not to pass.  We view the likely effects of it as a serious departure from commonly accepted best practices in the international world of antitrust law, as we outlined to our clients at the Johannesburg conference.  I will be curious to hear what Commissioner Bonakele’s comments on these critiques will be at Friday’s conference at New York University“, referring to an event sponsored by NYU and Concurrences, at which the SACC Commissioner is expected to deliver a panel speech later this week.

Commenting on the purported social transformational goals, South African competition partner John Oxenham adds: “There is a relentless push from government (not only Mr. Patel) to use the Competition Act as a tool to speed up its broader social and transformation goals.  The underlying reasons for this Amendment are rather straightforwardly conceded by the current, and arguably presently fluctuating, administration: the Bill was ostensibly designed not to enhance competitiveness in the traditional antitrust sense, but rather to address so-called market concentration and perceived unequal ownership patterns in the SA economy.”

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AAT exclusive, COMESA, commissioners, legislation, new regime, Uganda

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

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.

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AAT exclusive, legislation, minerals, new regime, Oil & Gas, public-interest

Angola does Antitrust: Latest addition to world’s competition-law regimes

After its 2017 administration change, the Republic of Angola is eager to join other African nations with nascent competition-law enforcement regimes: Having been approved by a unanimous majority of 183 votes in parliament, the new Angolan competition act is expected to be enforced by the also newly-established “Competition Regulatory Authority” (“ARC”) in short order, before year’s end, according to experts.

According to reports, the Angolan law (comprising 56 articles across 8 chapters) prominently includes principles such as the public-interest criterion and “rules of sound competition in morality and ethics.”

Says Andreas Stargard, an antitrust/competition and white-collar attorney with Primerio Ltd.: “These are concepts often deemed non-traditional in the antitrust laws in the Western hemisphere.  Yet, public-interest considerations are increasingly common in African competition-law legislation and indeed often form the basis for otherwise difficult to justify pragmatic enforcement decisions we now encounter more frequently across the continent, both in merger and non-merger cases.”

Angola is a member of the African Union and the SADC (Southern African Development Community), whose most prominent member, the Republic of South Africa, has a comparatively long history of including public-interest considerations in its two decades of antitrust enforcement.  As to the general concept of Angola finally adopting a competition-law regime, it appears that a key driver was the anticipated diversification of the domestic economy:

“A functioning Angolan competition regime (meaning not only the statute but also including an effective enforcement agency) is long overdue, as recognised by the recently elected Angolan president, João Lourenço,” says attorney Stargard. “By supporting enactment of the Competition Bill, Mr. Lourenço has made good on his campaign promise from 2017 to incentivise foreign direct investment, increase domestic business growth, and — importantly for the population — encourage price competition in local consumer goods markets, as the cost of living in Angola is among the highest on the African continent”.

One of the drivers of the new government’s push for FDI and organic GDP growth is the desire to de-link the Angolan economic dependence from oil prices and production, and possibly also from China (which remains the country’s largest trading partner by far). Angolan fossil fuel and diamond exports — together by far the largest sectors of the economy, and as commodity industries, quite naturally subject to collusion risk and/or monopolistic practices, according to Mr. Stargard — have yielded at best inconsistent benefits to the country’s population at-large, and President Lourenço’s pro-competition intitiative appears to support the diversification of his country’s lopsided economy historically focused on mining and resource extraction.

 

 

 

 

 

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