COMESA, merger documentation, notification

New Merger Guidelines fail to revise Rules flaw, but adjust notification threshold upwards

COMESA Competition Commission logo

COMESA publishes new Merger Assessment Guidelines, uses back-door defintion to adjust threshold to >$5 million

On Friday, the COMESA Competition Commission published its 2014 Merger Assessment Guidelines, available here in PDF.  They finally replace the prior Draft Guidelines, which the agency’s Willard Mwemba had predicted would be finalised no later than June 2014.  The new final version fails to put a formal end to the technical zero-dollar notification threshold, but — through a back-door definition of what it means to “operate” in the COMESA region — does achieve the practical effect of terminating what AAT has dubbed the “zero-threshold contagion” – i.e., any transaction between parties with any turnover/revenue whatsoever within the common market of COMESA used to be notifiable.

We invite our readers to take a look at the entire document.  Rather than having the COMESA Board meet and re-draft the actual Rule, the CCC appears to have taken the short-cut solution of ex parte “Commission consider[ation]” of what it means for a company to “operate” in the organisation’s jurisdiction.  Section 3.9 re-defines “operat[ion]” of a COMESA company as follows:

3.9 The Commission considers that an undertaking only “operates” in a Member State for purposes of Article 23(3)(a) of the Regulations if its operations in that Member State are substantial enough that a merger involving it can contribute to an appreciable effect on trade between Member States and restriction on competition in the Common Market. For these purposes, the Commission considers that an undertaking “operates” in a Member State if its annual turnover or value of assets in that Member State exceeds US $5 million.

However, it notably maintains all references to the “Rules on Notification Threshold,” which continue to specify a “U.S. $ zero” threshold:

3.4 The Commission’s Board prescribed such threshold with Council approval in the Rules on Notification Threshold, the scope of which is also limited to mergers having a “regional dimension”(Rule 3). According to the Rules on Notification Threshold currently in force, the threshold of combined annual turnover or assets for the purposes of Article 23(4) is exceeded if:
(a) the combined worldwide aggregate annual turnover or the combined worldwide aggregate value of assets, whichever is higher, of all undertakings to the merger in the Common Market equals or exceeds US $ zero; and
(b) the aggregate annual turnover or the aggregate value of assets, whichever is higher, of each or at least two undertakings to the merger in the Common Market equals or exceeds US $ zero.

It is not as though the CCC’s staff were unaware of the critiques levied against their zero-threshold regime.  Mr. Mwemba stated back in February 2014 that the agency had been setting “the wheels in motion for the threshold to be raised.”  The Commission has been eportedly working with the World Bank’s International Finance Corporation to determine what the proper notification thresholds should be.  AAT also understands that other antitrust advisors — including former FTC Commissioner, Chairman, law professor and competition-law conference mainstay Bill Kovacic — were helping the young enforcement agency to design a more workable and internationally respected merger-review regime.

consumer protection, Extra-judicial Factors, merger documentation, mergers, Namibia, public-interest

Namibian merger control: 1st deal of 2014 gets conditions


Namibian Competition Commission Imposes Conditions on Mining Deal

The Namibian Competition Commission has given its first conditional approval of the year in a gold-mine transaction, imposing employment conditions that require the purchaser not to lay off any employees for a minimum of two years from the date of sale.

Unemployment concerns drive antitrust ruling

The Commission stated, per reporting on, that there were no reasons to block the deal on a lessening-of-competition grounds under section 47 of the Competition Act, but that it was “concerned about the effect of the sale on employment, hence the imposition of the above condition.”

AAT reported last year on the revision of the Namibian competition law to include consumer-protection provisions, which would allegedly bar M&A deals not only on pure antitrust grounds but also on a more broadly defined “unfairness” basis.

In the current deal, buyer Guinea Fowl Investments Twenty Six will acquire the Navachab gold mine from AngloGold Ashanti Namibia, which since last year has had gold-mining competition from one other player (B2Gold) in the domestic market.

First 2014 deal with conditions

We note that no other cleared transaction has had conditions imposed since the beginning of the calendar year, as shown by the agency’s May M&A update 2014:

Namibian NaCC approved deals as of May 2014

Namibian NaCC approved deals as of May 2014


COMESA, fees, legislation, merger documentation, mergers, new regime, notification

COMESA news of the day: web site down again; 5 “exemption” letters granted

COMESA Competition Commission logo

Site down – 5 “comfort letters in 5 months – Guidelines revision by June

In an almost farcical repetition of its information-technology woes, the COMESA Competition Commission’s web site ( is off-line, yet again, after having been successfully hacked multiple times.  Whether the latest outage is due to a similar attack or simply (and hopefully) due to its webmaster’s shoring up the competition enforcer’s IT security measures remains to be seen.  (We have not yet heard back from the agency’s leadership on our request for information on the online data safety of parties’ submissions.)

In more substantive news, IFLR reports that the CCC has issued five so-called “Comfort Letters” since December 2013, exempting otherwise notifiable transactions from the duty to file (as well as the concomitant payment of the (high) filing fees), where the actual nexus to the COMESA region was negligible or non-existent.  This may help explain some of the lackluster filing statistics on which we reported previously.

The report also quotes the CCC’s head of mergers, Mr. Willard Mwemba, as saying that the revision of the Competition Guidelines should be finalised by the end of June 2014.

BRICS, COMESA, fees, merger documentation, mergers, new regime, notification

Slow-going M&A statistics in COMESA before anticipated threshold revision

COMESA Competition Commission logo

Strong numbers from early 2014 did not hold up

After posting a record three merger notifications in January, the COMESA Competition Commission has seen its M&A filing statistics decline to zero in February and merely one in March.

As we have reported here (optimistic for 2014) and here (pessimistic on 2013 statistics), COMESA’s notified M&A deals have seen erratic ups & downs.  Not surprising, perhaps, if one considers the exquisite confusion that has reigned since the inception of the young antitrust authority about filing thresholds and fees.

The current ebb in notified deals (despite the record set in January) reflects, in our view, the impending end of the current “zero-threshold” regime in COMESA, which was foreshadowed by The CCC’s head of mergers, Willard Mwemba, back in late February 2014.  Quite understandably, parties to ongoing transactions are willing to risk “flying under the radar” if the agency has de facto admitted that the zero-dollar filing threshold is unworkable in practice.

We are curious to see what impact the vacuum of the pending revision to the COMESA merger rules will have on filing statistics going forward, until a more sensible threshold is set by the agency.  For now, with the latest notification #4/2014 (fertilizer and industrial products acquisition by Yara International ASA of OFD Holdings Inc.*) the stats look like this:

* we note that in the notice, the CCC erroneously set the deadline for public comment prior to the notice date itself, namely as “Friday, 28th February, 2014.”

competition law antitrust Africa

COMESA CCC M&A filing statistics as of March 2014

agriculture, Botswana, COMESA, jurisdiction, Kenya, Mauritius, merger documentation, mergers, Mozambique, notification, Uganda, Zambia

COMESA merger stats: January ’14 outperforms first 6 months of 2013

COMESA Competition Commission logo
Three merger notifications in one month set new record for COMESA Competition Commission.

After commenting on the rather lackluster statistics of the first 11 months A.D. 2013, we observed that some deal-making parties might be “flying under the radar” and asked the question:

Combine Point 4 above (low filing statistics) with the zero-threshold and low nexus requirements that trigger a COMESA merger notification, and the following question inevitably comes to mind: With such low thresholds, and the certain existence of commercial deal activity going on in the COMESA zone, why are there so few notifications?

Well, the young agency’s stats have picked up some steam in 2014, it would seem: based on a review of its online document repository, the CC has received a whopping three notifications in January alone.  They are, in chronological order:

  1. Mail & courier services: FedEx / SupaSwift – a transaction involving the acquisition of a South African courier with operations in multiple COMESA member states, Botswana, Malawi, Mozambique, Namibia, Swaziland and Zambia.
  2. Agricultural distribution and financial services: AgriGroupe / AFGRI Ltd. – Mauritian SPV AgriGroupe seems to be taking AFGRI (listed on the JSE) private.  The target has operations in multiple COMESA countries.
  3. Generic pharmaceuticals: CFR Inversiones SPA / Adcock Ingram Holdings Ltd. – Chilean CFR is buying all of South African off-patent pharmaceuticals manufacturer Adcock’s shares. Notably, the buyer has no COMESA activities; target is active in Kenya, Malawi, Rwanda, Sudan, Swaziland, Uganda and Zimbabwe.
(c) AAT

Merger notification stats for COMESA as of Feb. 2014


  • Activity has increased dramatically.  Is it a coincidence & a statistically irrelevant blip on the radar screen?  This remains to be seen. The parties are – unlike last year’s – not “repeat parties” and therefore the increase in notifications seems to be natural/organic growth, if you will, rather than a case of the same bear falling into the same honey-trap multiple times…
  • The Competition Commission has listened to its critics (including this blog). Notably, the CC now clearly identifies the affected member-state jurisdictions in the published notice – a commendable practice that it did not follow in all previous instances, and which AAT welcomes.

Post-scriptum: Adding up the total 2013 tally of notifications, the Tractor & Grader Supplies Ltd / Torre Industrial Holdings transaction (notified after our prior statistics post in November 2013) brought the sum-total of COMESA merger filings to 11 for FY2013.

COMESA, fees, legislation, merger documentation, mergers, new regime, notification, personnel

COMESA merger rules to change in April 2014 at the earliest

COMESA Competition Commission logo

Breaking news: A senior source at the COMESA Competition Commission (“CCC”), has confirmed that the CCC is currently finalising proposed amendments to the Regulations.

The amendments being debated seek to change, crucially, the applicable thresholds for merger notifications to the CCC and to clarify the definition and (potentially lower?) amount of the administrative notification fees.

For the amendments to come into force, they require approval from the COMESA Council of Ministers.  The Council convenes once a year, now likely in February.  The source adds that, as the amendments will only be finalised toward the end of February, an extraordinary session of the Council of Ministers will likely need to be convened to consider the amendments to the Regulations.  Such an extraordinary session may take place in April 2014.  The amended Regulations will only become enforceable upon approval by the Council.

That is, the way things are looking today, any change to the COMESA merger rules will occur in half a year at the earliest

In practical terms, this means that the dual dilemma of the “zero-threshold contagion” and the inordinately high filing fees currently affecting the CCC’s merger-control regime (and resulting in rather low merger-notification statistics of less than one per month) will continue to hamper the young agency and its customers for the foreseeable near-term future.

We will report back once we have additional details on the precise language of the proposed amendments.

BRICS, COMESA, fees, full article, jurisdiction, Kenya, legislation, merger documentation, mergers, Mozambique, new regime, notification, personnel

The Zero Threshold Contagion

Published in this month’s “The Threshold,” the American Bar Association’s merger-focused quarterly journal:

The Zero Threshold Contagion — Too Little of a Good Thing in Pan-African Merger Control

Andreas Stargard [1]

Fittingly for this publication, international merger control poses a threshold problem.  One may call it the “zero-threshold contagion.”  On January 14, 2013, it spread to the newest member of the growing number of worldwide merger-control regimes: the victim in this particular instance was COMESA[2] – a multi-jurisdictional body with a vast geographic span across 19 eastern and southern African economies, home to a population 25% larger than that of the United States.


With the inception of the COMESA Competition Commission’s (“CCC”) operations, certain corporate transactions “with a regional dimension” are now subject to mandatory merger notification.  Whether or not this notification requirement has a suspensory effect on the notified transaction[3] is but one of the many ambiguities pervading the young merger regime, which applies a “substantially prevent or lessen competition” test, in addition to other, less-common criteria for merger analysis.  A fair question arises: “What exactly are the rules?”

Much of the commentary on the CCC’s emergence has been critical, mostly focused on the many ambiguities in the system, and occasionally going as far as questioning the agency’s mandate, competence, and extraterritorial reach.  This article lays out the objective underlying facts behind COMESA, which are often little understood.

Having a merger-control regime – more broadly speaking, a competition law[4] – in the region is neither surprising nor a sudden development.  The statute has been in existence for a decade, and the advent of the CCC merely represents the pinnacle of a rather long regional history that was to lead, quite predictably, to its implementation.

To understand the impetus behind this final chapter in the gestation of supra-national antitrust law in Africa, it helps briefly to recall COMESA’s history.  Its goals were premised ab initio on economic progress in the region, having evolved from its precursor “Preferential Trade Area for Eastern and Southern Africa” (1981) into the COMESA of today (1994).  COMESA’s establishing Treaty, drafted two decades ago, left no doubt that competition law would become a key focus area for the organization.[5]  After all, one of COMESA’s primary stated goals is a “wider, harmonised and more competitive market.”[6]

It is against this historical backdrop that the organization enacted its Competition Regulations and Rules in 2004.  Yet, a decade later, the Regulations remained empty legislative vessels, as there was no enforcement body to apply them.[7]  Elsewhere, I have called the phenomenon of the gap between existing antitrust legislation and its lack of enforcement the “missing policeman rubicon.”  The COMESA competition regime finally crossed that river when the CCC, headquartered in Malawi, became operational in January of this year under the leadership of George Lipimile.  Its launch finally awakened the dormant antitrust statute and its merger-control regime.

From tabula rasa to Established Enforcement – a Rocky Road without a Threshold

Almost a year into the CCC’s existence, one may ask how the various pieces of the enforcement puzzle have come together?  Filling in the blank canvas on which Mr. Lipimile’s agency is building its administrative platform has not come without hiccups, as well as numerous pragmatic questions raised about how COMESA will achieve its stated mission.  First and foremost among these is the threshold question.

As readers of this publication are keenly aware, when advising clients on the perennial question of “where must we file,” law firms commonly operate on the basis of a piece of coveted and fiercely guarded work product, created over the course of decades and regularly updated, in all likelihood, by a junior attorney: in short, a jurisdictional matrix showing key variables such as per-party deal-value or revenue thresholds, (disfavored) market-share tests, exceptional minority shareholding or control rules, and other unique characteristics of each of the ten dozen or so merger regimes currently in operation worldwide.

It is a safe bet that the attorneys who had the misfortune of having to add the COMESA section to their firm’s matrix in early 2013 were scratching their heads at the (then virtually unexplained) language governing CCC merger enforcement.  Their first question was: What’s the revenue threshold?  Short answer: None.

The statute requires parties to have combined worldwide and regional aggregate revenues or assets, whichever is higher, of at least “COM$ Zero.[8]  The CCC’s explanation for this de facto non-existent threshold has been that “different Member States are at different levels of economic development and hence a realistic threshold can only be determined after the Regulation has been tested on the market.  Therefore, the threshold shall be raised after a period of implementation of the Regulations.”[9]

In addition to the threshold issue, it has also remained unhelpfully vague what it means for a business to “operate” within COMESA – e.g., are mere import sales sufficient?  How many of the parties to the transaction must be commercially active in the common market?  Does a COMESA notification discharge all filing obligations vis-à-vis member-state competition authorities, even those whose markets are primarily affected by a given transaction (i.e., is the CCC a true one-stop-shop)?  Are acquisitions of minority shareholdings out of scope?  How is the (seemingly unduly steep) filing fee actually calculated?

In brief, the need for significant clarification was abundantly clear early on.  To its credit, the CCC did follow international best practices and released its explanatory Guidelines in draft form for public comment in April.  The Guidelines cover not only the procedural steps and substantive analysis applied by the agency, but also some of the uniquely regional topics, e.g., the “public interest criterion” under Article 26 of the Regulations – an additional analytical (most would say solely socio-political) criterion that goes far beyond orthodox antitrust principles, muddying the waters of pure merger-control assessment and arguably diluting outcome predictability to the point of a “black box.”  In response, commentators from across the globe (including the American Bar Association) provided their critical response during the summer, in the hopes of ensuring the young agency’s smooth evolution from blank slate to rational and proportionate merger enforcer.

It is now – almost one year into the COMESA competition saga – ever more evident that significant confusion (and parties’ resulting aversion to filing) remains.  One piece of readily available empirical evidence demonstrating this fact is the lack of any meaningful number of merger notifications.  It is no secret that many private practitioners follow the rule that, in the absence of clarity and meaningful thresholds, COMESA simply constitutes “no-go territory” for merging firms.  Such advice has led not only to an instinctive discounting of COMESA’s relevancy, but also directly to the CCC’s subdued statistics: the agency has received only nine ten notifications in the first ten eleven months of its existence.  Compare this rate (which averages less than one per month) to the estimated number of filings received by another relatively young antitrust watchdog in a developing economy, the Indian Competition Commission (which has received more than 5 notifications per month).

In short, the view persists among global competition counsel that parties can, in commercial practice, simply dispense with a CCC filing that would otherwise be technically required.  Weighing the risk of non-notification (“Is the CCC willing to bring an enforcement action for failure to notify?” – “Does it have adequate resources to sue?”) against the costs, burden and unpredictability of doing so has, in practice, often resulted in a decision not to notify.

This attitude, in turn, revives the dilemma of the “missing policeman”: even if he is physically present, an enforcer who lacks authoritative presence will remain ineffectual – a danger that is only aggravated if the rules he is to apply are not clearly laid out.

The lackluster statistics also raise the further question whether COMESA simply “bit off too much” on the merger-control front, especially when one considers its zero-dollar thresholds, small staff, fragmented supra-national infrastructure, and other factors that call into question its viability (e.g., jurisdictional disputes with some of its member states).  In 2012, senior outside advisers had warned the CCC that – with a zero-dollar threshold and almost no nexus requirement – it was either going to be flooded with de minimis notifications or receive virtually none whatsoever, as parties would simply ignore the mandate.  Thus far, the latter has turned out to be the case.

COM$0, No Nexus, and a Hefty Price Tag – Recipe for Disaster?

The zero-threshold dilemma ranks perhaps as the most significant among the criticisms leveled at the CCC.  Yet, it does not stand alone in the confusing arsenal of statutory language that routinely perplexes counsel advising merging parties with commercial activities in the region.

Lack of Clear Jurisdictional Nexus

At present, a merger transaction[10] is technically notifiable where only one of the parties operates within more than one member state of the common market.  This sets the stage for perverse possibilities: a transaction with a target jurisdiction that, to this day, does not have a domestic antitrust law will nonetheless require a CCC notification with its attendant colossal filing fee.  Worse, the same goes for the acquisition of a target that has no operations whatsoever within COMESA, but where the acquirer alone operates in two member states.

A prime real-life example is the recent COMESA approval of Total’s acquisition of Shell’s Egyptian gas operations.[11]  Pursuant to the terms of the published decision – which is marred by the omission of crucial terms, thereby rendering a meaningful interpretation difficult – the CCC determined “that the transaction has a regional dimension in that both [sic!] the acquiring firm operate [sic!] in more than one COMESA Member State.”[12]  Is it both or just one?  The decision proceeds to identify only the states in which the acquirer is active and does not mention those in which the target has any cognizable operations.  In yet another notified transaction, only the acquiring party had operations in three member states, whereas the target was admittedly “only active in Nigeria, and has no operations in any of the COMESA Member States.”[13]

In essence, under the present regime, even transactions with a de minimis nexus to the region are subject to notification – a rather blatant jurisdictional overreach when compared to international best practices, as enunciated for instance by the ICN in its Recommended Practices for Merger Notification Procedures or in the OECD’s counterpart guidance.  These provide for the generally accepted principle that the parties’ commercial activities on the relevant market must have a material nexus to the reviewing jurisdiction, i.e., the merger must be likely to cause an appreciable competitive effect within the territory of the reviewing jurisdiction, such that notifications are only required for “those mergers that have an appropriate nexus with their jurisdiction.”[14]

In its present form, the net cast by the COMESA merger regulations is woven far too finely, as it catches transactions in which only the acquirer operates in the Common Market.  Should the status quo persist through the next iteration of the merger rules’ amendments, the CCC will entrench itself as being out of sync with accepted best practices and will have cemented an inopportune example of extraterritorial overextension in global merger enforcement.

A (Pricey) Tollbooth on the African Merger Interstate

Other areas of criticism may sting even more, however.  A two-fold key problem of the young merger regime has been (1) its confusingly worded filing-fee provision and (2) the perceived exploitation thereof by the CCC.  Tackling these briefly in turn, it is almost an understatement to call the fee provision[15] ambiguous or unclear – its indiscriminate use of “higher of” vs. “lower of,” with no transparent identification of the relevant reference points, is a prime example of avoidably poor legislative drafting.

The publication of a barrage of (incorrect, as it turns out) news flashes and client alerts by law firms prompted the CCC, to its credit, to issue corrective guidance shortly after its inception: on February 26, 2013, it clarified that the half-million-dollar figure was in fact the maximum filing fee.[16]  In the words of the CCC: “When a merger is received, the [CCC] will first calculate 0.5% of the combined turnover of the merging parties.  [It] will then calculate 0.5% of the combined value of assets of the merging parties. [It] will then compare results in 1 and 2 above and get the higher value.  [It] will then compare this higher value to the COM$500,000.”[17]

As a practitioner’s rule of thumb, if the combined annual revenues or asset values of the notifying parties are (U.S.) $100 million or more, the administrative fee will be the maximum $500,000.

The agency’s clarification notwithstanding, it goes without saying that the resulting fees (including miscellany)[18] will nonetheless be exorbitant.  The filing fee alone is vastly disproportionate to the deal values of all but the largest transactions.  Indeed, it constitutes by far the highest merger notification fee in the world (keeping in mind that the global filing-fee scale ranges from the EU’s €0 fee to the United States’ $280,000 maximum).

According to a March 2013 CCC letter, the agency undertook a “preliminary assessment” of expected notification fees, concluding that the cost of a (presumably one-stop-shop) COMESA filing would be “much lower than that of the national competition authorities and this has resulted in the cost of doing business (notifying using the COMESA route) being reduced by about 43.4%.”[19]  It admits, however, that this early estimate was just that – a guess, as it had “not yet concluded any merger investigation for one to have a basis for any comparisons.”[20]

Since then, the CCC has nonetheless taken full advantage of its “tollbooth” role.  For instance, as reported in various business journals,[21] it billed the parties to the pharmaceutical Cipla transaction at the maximum level possible, cashing in half a million U.S. dollars in the process.  It is difficult to recreate the CCC’s unstated methodology of its “preliminary assessment,” but under no hypothesis would the Cipla parties’ national filing fees have matched, much less exceeded, the COMESA fee.

Recalling that one of the stated goals of COMESA is to create a “more competitive market,” one may ask whether the organization has lost its way?  Is it spitefully naïve or rather sadly perceptive to view the creation of the CCC as a short-sighted attempt by a developing region to extract a de facto tax on local businesses and foreign corporations interested in acquiring them – in effect thereby stifling regional growth and outside investment?

Sources who were present during preparatory meetings between CCC staff and international advisors from other enforcement agencies and academia confirm that, even prior to its becoming operational, the CCC affirmatively counted on taking full advantage of the high fees, perceiving them to be a source of funding elementary to the agency’s existence.  This anticipated revenue stream was viewed as so significant that members of the Kenyan Competition Authority (“CAK”) and the CCC engaged in an open quarrel over the ultimate recipient thereof and whether there would be any fee split among NCAs and the CCC.  This type of internal common-market discord eventually led to a “revenue-sharing agreement” of sorts.[22]  Yet, Kenya and COMESA have subsequently continued to disagree on whether COMESA has jurisdiction over certain notifiable transactions – leading to further ambiguity over whether COMESA will be a true “one-stop-shop”.  It stands to reason that the agencies’ prior fee dispute is but one reason for the CAK’s formal request for a “cooperation framework” between the authorities, in order to “operationalize” the two agencies’ joint mandate and to “actualize the interface.”[23]

Going Forward – Mixed Signs of Hope, But the Window is Closing

The silver lining amid clouds of confusion and disagreement surrounding COMESA’s merger-control provisions consists of universal anticipation of revamped legislation and guidance papers.  Since it is the most obvious shortcoming, the glaring zero-threshold provision will likely take center stage at the upcoming annual meeting of the COMESA Council, slated for December, which unites cabinet-level emissaries from all 19 member states.  The Council alone can amend the rules and regulations governing the CCC.  The agency, however, is presumptively in sole charge of its interpretive guidance relating to the legislation.  To date, the agency has not published a final version of its Guidelines.  It is therefore too early to conclude whether the submission of comments on the drafts by experienced practitioners and other experts has borne fruit.

In addition, while the public consultation procedure on the Regulations is well-intentioned in principle, its delayed start and lengthy duration indicate a protracted period of uncertainty and, thus, the continuing validity of inadequate legislation, i.e., the status quo.  The consultation’s implementation, effectiveness, and quality of outside advisers also remain to be determined.

In sum, COMESA’s competition enforcement has left many questions unanswered.  The low number of actual merger notifications is a direct reflection of parties’ and practitioners’ unease at dealing with the CCC.  Crucial elements of the agency’s ultimate success will almost certainly include the clarification of its existing rules as well as the adaptation of its merger legislation to real-life exigencies, such as fundamentally inverting the current ratio of high filing fees and low thresholds.

[1] Andreas Stargard is a partner in the Brussels office of Paul Hastings.

[2]Common Market for Eastern and Southern Africa,” of whose 19 members only a minority of jurisdictions currently have domestic antitrust laws (Egypt, Kenya, Malawi, Mauritius, Seychelles, Swaziland, Zambia and Zimbabwe).  Notably, COMESA excludes South Africa, by far the largest economy in the region, which has its own merger control regime.

[3] The COMESA Regulations do not clearly provide for a prohibition on closing prior to clearance, although the formal Notification Form (No. 12) contains language indicating suspensory effect.  CCC’s staff has made informal comments at various conferences stating that the regime was not suspensory.  However, the last legislative word has not been spoken on the issue, or if it has, it remains ambiguous.

[4] This article focuses on the merger-control aspect not only because it is the Threshold’s topical focus.  COMESA’s broader antitrust rules (on abuse of dominance or cartel prohibition) are not yet fit subjects for comment, as they have simply not seen any application in practice as of this writing.

[5] See, e.g., COMESA Treaty Art. 55 (establishing a regional competition law framework and foreshadowing implementing Regulations); Art. 52 (prohibiting certain types of state aid, “which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods”); Art. 54 (anti-dumping); see also Arts. 76, 85, 86, 99, 106.

[7] SeeCrossing the Competition Rubicon: Internationalising African Antitrust through COMESA,” Concurrences Law Journal, Vol. 3-2013, co-authored with John Oxenham.

[8] A so-called “COMESA dollar” is a monetary accounting unit pegged (since May 1997) to the U.S. dollar at a fixed 1-to-1 exchange rate.

[9] Draft Merger Assessment Guideline, §1.3.

[10] That is, the “direct or indirect acquisition or establishment of a controlling interest by one or more persons in the whole or part of the business of a competitor, supplier, customer or other person.”  Art. 23 COMESA Competition Regulations

[11] CCC Decision, Total Outre Mer S.A / Shell Marketing Egypt and Shell Compressed Natural Gas Egypt Company, October 18, 2013 (public version), available online at

[12] Id.

[13] CCC Merger Inquiry Notice No. 7 of 2013, Notice of Inquiry into the Transaction involving the Acquisition of Provident Life Assurance Company Limited by Old Mutual (Africa) Holdings Proprietary Limited, available online at

[14] OECD Recommendation of the Council on Merger Review I.A.1.2.i.

[15] Rule 55(4) of the amended COMESA Competition Rules reads as follows: “Notification of a notifiable merger shall be accompanied by a fee calculated at 0.5% or COM$500000, or whichever is lower of the combined annual turnover or combined value of assets in the Common Market, whichever is higher.”

[16] The “greater of” calculus in the provision instead refers to the half-percent of “assets” versus “revenues,” according to the CCC.

[17] “Interpretive Meaning Of The Notification Fee Pursuant To Rule 55(4) Of The Amended COMESA Competition Rules,” available online at:

[18] Fees for notifications are not the only party-sponsored revenue source, as the November 2012 amendments to the Competition Rules also prescribe a $10,000 fee each for applications for authorization and for exemption orders.  See Amended Rules 63(1) and 77(4).

[19] Letter from CCC, dated 22 March 2013, at §17, available online at

[20] Id. at 16

[21] See, e.g., “Regional competition body for COMESA under fire for inflated merger filing fees,” Business Day (8/20/2013), available online at:

[23] February 14, 2013 letter from CAK Director-General Kariuki to the CCC’s Mr. Lipimile.  The Kenyan Attorney General subsequently issued a ruling against COMESA jurisdiction over certain Kenyan transactions in March 2013.  See

COMESA, Egypt, fees, merger documentation, mergers, new regime, notification

Some COMESA Merger-Control Musings on the Latest Notification

COMESA Competition Commission logo

It’s been a little while since we last published a note on COMESA.  When there is little substantive news to report, statistics often yield a topic to write about.  And so it is with COMESA.  The statistic at hand: On Monday, 18. November 2013, the Competition Commission announced that it had received its tenth merger notification.

Here are a few observations on the deal (Total Egypt LLC/Chevron Egypt SAE & Total/Beltone Capital Holdings) that spring to mind:

  1. Geography: While the recitals fail to mention any common-market dimension of the transaction, it seems to be centered on COMESA member state Egypt.  On the face of it, this appears to be an Egyptian deal, and as we have become accustomed to, it is hard to infer from the published information what the nexus to the common market is.
  2. Repeat party: The notified deal involves a repeat customer of the CCC, namely the oil & energy company Total.  A different Total subsidiary had filed for (and has since obtained) approval of another transaction in March: the previous Total/Shell deal, also centered on Egypt, was notified in July.  To our knowledge, Total is the first repeat COMESA-notifying party in the CCC’s history.  This may well be a positive sign for the CCC.
  3. Two-for-One, please! The CCC observes in its November 18th notice that it actually received one single notification for de facto two transactions: the Chevron and the Beltone deal.  But the parties were quick to point out – smartly so, some would say – that the deals were closely “interrelated” and therefore should be treated as one transaction for purposes of COMESA review.  Bottom line: only one notification = only one merger filing fee (!) to pay, which can, as we know, easily hit the half-million dollar mark.  In the end, the CCC bought the argument and allowed the parties to make only one single notification.
  4. Overall statistics: 11 months and 10 merger notifications.  That equals less than 1 filing per month.  With such a low number, the CCC is certainly not on track to beat other young competition-law enforcers’ merger stats (such as India’s Competition Commission, which has received an average of over 5 notifications per month since its inception two years ago).
  5. Flying under the radar: Combine Point 4 above (low filing statistics) with the zero-threshold and low nexus requirements that trigger a COMESA merger notification, and the following question inevitably comes to mind: With such low thresholds, and the certain existence of commercial deal activity going on in the COMESA zone, why are there so few notifications?  Are parties simply ignoring the notification mandate?  And if so, what is the CCC — an enforcement agency, after all — doing about this?
  6. Cute or lax? As with other official documents on the CCC’s web site, even this mere 2-pager contains what appears to be an unintended inclusion of internal CCC notes that the agency failed to delete prior to publication.  It reads as follows: “[these abbreviations are not explained anywhere above].”  Someone forgot to review the [short] notice, which has been up for 3 days now, and which does diminish the appearance of professionalism.  More importantly, it calls into question the ability of the agency to edit its own documents carefully, redact properly, and thus its capability to maintain the confidentiality of party or non-party submissions.  Quoth the Raven: “I wish to assure you that all the information you will make available to the Commission shall be treated with the strictest confidentiality and will only be used for the purpose of this inquiry,” as the standard closing CCC paragraph goes…
In conclusion, the most important practical tip for parties contemplating deals in the COMESA region is perhaps the upshot of Point 3 above: Get a package deal! There is now precedent that the CCC permits such combined notifications, which should allow parties to wrap multiple transactions into one lower-cost filing, thereby avoiding what I am calling in an upcoming article the CCC’s “(Pricey) Tollbooth on the African Merger Interstate“…
COMESA, legislation, merger documentation, new regime, personnel

UPDATED: COMESA Competition Commission reported to have selected consultancy for review of Guideliens

COMESA Competition Commission logo

NOTE (10 Sept. 2013): Responding to this blog post written yesterday (below), Mr. Willard Mwemba contacted me and kindly clarified that (1) the CCC had not yet appointed or otherwise selected a consultant and (2) the review process is centered on the COMESA competition Regulations and not the Guidelines.

According to an article that appeared on 6 September 2013 in BusinessDay/BDLive, the head of COMESA CCC‘s merger unit Willard Mwemba has revealed that the CCC has supposedly already chosen the consultancy tasked with aiding the agency in revamping its competition regulations.

The article states: “He said they have already appointed a consultant to address the critical questions.”  The remarks were reportedly made at this year’s seventh annual conference on competition law, economics and policy hosted by the South African Competition Commission in Johannesburg.

If true — i.e., if the CCC has indeed already selected a team of consultants to support its (commendable) effort to review and evaluate its own competition-related Regulationsthis would directly contravene the stated deadline of 30 September 2013 for submission of bids (para. 10.9 in the RFP) for said tender (RFP No. CCC/30-08-2013/1).  See our prior reporting here.

It remains to be seen whether this is the case, or whether the task of “address[ing] the critical questions” mentioned by Mr. Mwemba is in fact a distinct project from the one that is the subject of the formal Request for Proposal issued by the CCC(Note: This is now clarified, as per the headline above, as Mr. Mwemba has explained that the BDLive article misquoted his statement.)

BRICS, COMESA, dominance, FAQ, fees, jurisdiction, Kenya, legislation, merger documentation, mergers, new regime, notification, personnel, South Africa

“Crossing the Competition Rubicon”: Internationalising African Antitrust through COMESA

John Oxenham & Andreas Stargard

(PDF of article as published in Concurrences)

Crossing the Competition Rubicon: Internationalising African Antitrust through COMESA

As published in HORIZONS / Concurrences Law Journal (vol. 03-2013) Institute of Competition Law, re-published under licence.

English Abstract: Antitrust publications were abuzz with “COMESA” in recent months. Yet, neither the decades-old pan-African organisation nor its Competition Regulations are novel. What’s new is that COMESA’s Competition Commission has finally — and suddenly — opened its doors and begun operations, already having reviewed two merger filings. This paper examines the economic advantages of COMESA for the region, analyses its role as a multi-national enforcement body, and identifies the pitfalls the agency will face in its inaugural year.
French Abstract: Les publications en droit de la concurrence étaient en effervescence avec « COMESA » ces derniers mois. Pourtant ni l’organisation pan-africaine, ni ses règlements concurrence ne sont nouveaux. Ce qu’il y a de nouveau, c’est que la Commission de la Concurrence du COMESA a finalement — et tout à coup — ouvert ses portes et a commencé ses opérations, ayant déjà examiné deux dossiers de fusion. Cet article examine les avantages économiques qu’offre COMESA pour la région, il analyse son rôle en tant qu’organe d’exécution multinational, et il identifie les pièges dont devra faire face la CCC durant sa première année.


1. The Common Market for Eastern and Southern Africa has recently grabbed international legal headlines. Its acronymic title, COMESA, now firmly features in the awareness of most competition lawyers. The organisation is not new, however, nor are its Competition Rules and Regulations. The multi-national body itself dates back at least twenty years, and the Regulations were finalised and (technically) entered into force in 2004.

2. Why all the ruckus in 2013 then ? The reason is straight-forward : Antitrust law does not self-execute. It needs an enforcer, public or private. That enforcement agency now exists.

I. Alea iacta est: A new supranational competition authority is born

3. For the past decade of the Competition Regulations’ theoretical existence, they dwelled in the nether region of unenforced laws – their Article 18 prohibition on abuse of dominance effectively had equal legal footing as the rule against a pedestrian jaywalking at a red stoplight : with no policeman in sight, either goes unpunished.

4. COMESA crossed the “missing policeman” rubicon on 14 January 2013, when the Competition Commission (“CCC”) saw the light of day. With the advent of its operation – as well as that of the supervisory body, its Board of Commissioners – also comes the enforcement of the full spectrum of competition legislation embodied in the Regulations (merger control, unilateral conduct, cartels, and so on). Its impact will be felt by economic actors across an area spanning 19 member states, 12 million km2 and a population of over 389 million [1].

5. The basics of the COMESA Regulations and the CCC’s powers are already well-documented elsewhere and do not merit repetition here. Instead, this paper is focussed on two broader policy points : (1) the law’s potential beneficial impact on the region as a whole ; and (2) the pitfalls and prospects of successful execution by the CCC. As the CCC has seemingly (and with good reason) done, we emphasise first and foremost the new merger-control regime, rather than other vertical and horizontal restrictive practices that are also, in principle, within the agency’s enforcement powers but remain entirely untested for now.

6. The new competition regime has not emerged without escaping criticism in the press and in law firms’ client alerts. Certain aspects of the feedback are particularly noteworthy, as they may have a fatal impact on the merger-control regime and indeed could render it unworkable in practice. The two key reproaches levied are (1) the “zero threshold” for mergers to be notified, and (2) that a two-party transaction must be notified even though one of the firms has no nexus to the COMESA market at all. In effect, were the COMESA merger provisions taken literally, “all” transactions falling within the ambit of a notifiable merger, regardless of how small or how removed from the common market area, would be notifiable under penalty of 10% of the merging parties’ turnover in the Common Market [2].

7. The CCC has already indicated, however, that it will address these issues in its final Guidelines and, potentially, in revisions to the Regulations themselves. Its willingness to adapt – hopefully swiftly – is commendable. It must change its initial broad-brush notification approach to accommodate the reality that the purchase of a competing road-side lemonade stand by another juice vendor in Nairobi is simply not a competitive concern justifying the legal mandate for formal notification with a multi-national antitrust authority. Compliance with ICN Recommended Practices I.A and I.B is fundamental for a pragmatic solution and, not least, to forestall the facile spread of misconceptions about the CCC’s perceived mission as well as, frankly, the danger of international ridicule [3].

8. In addition to the criticism levelled against it by third-party observers, the CCC has also sustained an early blow from within, as there has been a jurisdictional tug-of-war between the CCC and Kenya (notably a COMESA member state). The fairly little-noticed matter involves the control of acquisition of shares, interest or assets among local firms in Kenya. Uncertainty as to who the responsible regulatory authority was for such intra-country dealmakers has resulted in the Kenyan Attorney General issuing an opinion giving the Competition Authority of Kenya (CAK) authority to act as the sole agency with the mandate to clear “local” mergers and acquisitions. It shields local firms from the COMESA regime as far as purely domestic transactions are concerned. The CCC’s formal letter response to a contemporaneous blog posting by the authors on the dispute highlights the risk posed by vaguely worded filing requirements as far as “local” mergers are concerned : “[I]t is our considered view that CAK has failed to comprehend the advice by the Attorney-General which … specifically states that CAK shall continue to exercise its jurisdiction on local mergers and acquisitions. It is our understanding (…) [he] has not referred to merger transactions with regional dimension. This is the correct position” [4].

9. Regardless of the outside criticism and internal jurisdictional skirmish, at least two mergers have already been notified to the CCC as of the writing of this article, and others are underway. By comparison to another “newborn” merger authority’s performance – the Indian CCI, which was created in June 2011 – these numbers are arguably on the low end. The CCI saw a total of 51 and 62 merger filings in each of its first two years, respectively. At the CCC’s current pace, it will likely not surpass a dozen notifications in its inaugural year, although we view the first four months since its inception as non-indicative of future filings and anticipate that the rate will increase significantly.

II. Measuring COMESA’s success

10. To create a functioning, universally respected, supra-national competition authority ex nihilo is neither easy nor enviable, and to measure its success at only the half-year mark of its existence would be premature. Therefore, a perhaps more meaningful analysis of the short history of the CCC’s performance should focus on other benchmarks than the insufficient merger statistics that are available as of now. We identify some cognisable waypoints below, which may guide future evaluation of the CCC’s performance.

1. Best practices

11. The CCC’s release of formal Guidelines – dealing with, inter alia, such expected topics as merger control and market definition, as well as uniquely region-focussed topics such as the public interest criterion of the COMESA Regulations – has provided welcome and early guidance to businesses and competition practitioners alike. What’s more, the Guidelines’ pre-release in draft form, and the CCC’s concomitant request for public comment, conforms to international best practices for competition agencies and has allowed international commentators and global bodies (such as the American Bar Association) to provide valuable insight ex ante, before it is “too late” and enforcement blunders occur. It is too early to determine the extent to which the public comments will be taken into account and the Guidelines tweaked, however.

12. In addition, while simple in principle, it is hard to overstate the value inherent in clear, English-language agency documentation, made available on a professional, functioning, and well-designed web interface. The CCC offers all of the above, and fares well when compared to several of the more established competition agencies’ public profiles (including the clarity, updated nature, and accessibility of their documentation), in contrast to MOFCOM or other more senior agencies elsewhere.

13. In sum, the CCC’s pursuit of best practices from the get-go emphasises the overarching goal of “fairness” embedded in its basic charter, as well as its “ongoing efforts to clarify and publish guidance about its enforcement policies and practices” [5].

2. Organisational health

14. An enforcement agency is only as good as its enforcers, just as a law firm’s real capital is human in nature, consisting of its attorneys. That said, there does exist a benefit of having an enforcement body with a significant history and consistency of practice, regardless of present leadership, which is : institutional memory and resulting predictability for the outside practitioner of the agency’s enforcement actions and decisions. Here, this positive externality of having a long-lived authority with established practice is lacking.

15. The CCC is based in the administrative capital of Malawi, Lilongwe, and currently only fields eight staff members, which may be an issue if and when merger notifications increase. On the plus side, COMESA’s anticipated multi-national staffing portends longevity, institutional memory, and the potential for a – conceivably constructive and beneficial – “revolving door” staffing policy between NCAs and the CCC. Yet, with only two mergers notified to date and in light of its infancy, we view these criticisms as less relevant.

3. Regional enforcement and cohesion

16. One of the professed goals of COMESA’s CCC is to “achieve uniformity of interpretation and application of competition law and policy,” not only as part of its own enforcement within the CCC’s proper jurisdiction, but moreover “within the common market” as a whole [6]. In a region that has often lacked these features, such an approach is doubtless welcome. Based on the CCC’s pronouncements [7], the agency supports increased uniformity among member states’ domestic competition enforcement, in addition to its own exclusive enforcement over matters with a COMESA dimension per Article 3 of the Regulations.

17. One of the historical motivations for a pan-African competition enforcer was the realisation of member states that “with globalization, markets continued to extend beyond national boundaries and the national laws, and their enforcement institutions were no longer sufficient to deal with the new market problems of the region. To address these problems of enforcing multi-jurisdictional competition cases, a regional approach to the competition cases with regional coverage was found to be the solution.” [8]

18. Having a strong infrastructure in place has the potential to prevent pure competition policy and its application from descending into nationally politicised issues, as exemplified by anticompetitive government aid measures designed to prop up inefficient para-statal “domestic champion” enterprises.

4. Cost and time savings

19. The one-stop-shop concept which underlies the CCC’s raison d’être brings with it potential efficiencies of scope and scale, and is, in principle, a sound one. Its prime exponent is arguably one of the most successful multi-national competition enforcers, namely the EU Commission. Its current competition commissioner called it one “of the EU’s success stories making sure that consumers benefit from products and services to choose from at competitive prices whilst allowing companies to get their mergers reviewed swiftly.” [9] Today, over 70% of pre-notification referrals seek one-stop-shop review by the EU Commission in lieu of individual national filings.

20. As for the CCC, its merger mandate is similar, i.e., to enhance the efficiency of notification (one in lieu of potentially eight) and the consistency of review (obtaining one single outcome rather than potentially divergent results in different member countries). Moreover, its promise is to lower parties’ transaction costs : according to its own statement, the agency has already undertaken a “preliminary assessment” of the anticipated notification fees, concluding with the prediction that the cost of a COMESA filing will be “much lower than that of the national competition authorities and this has resulted in the cost of doing business (notifying using the COMESA route) being reduced by about 43.4%.” [10]

21. Taking this initial assessment at face value would be premature, however. The CCC admits that it “has not yet concluded any merger investigation for one to have a basis for any comparisons yet.” [11] Moreover, it is unclear from the CCC’s quoted statement whether the entire cost of notifying (including counsel fees, avoidance of duplication before multiple NCAs, and other opportunity-cost savings) is being reduced or merely the filing fees.

22. One potential procedural avenue to ensure lower average fees would be to introduce the equivalent of “short-form” notifications for transactions with little to no competitive concerns or nexi to any COMESA member state. Assuming the truth of the CCC’s assertion, however, it will be difficult for parties to squabble with expected cost savings that will slash their pre-merger legal expenditures by almost half.

23. Whether the CCC will have sufficient regulatory “bite” remains to be seen, as neither approval nor divestiture or prohibition decisions have been taken yet. It is noteworthy that the first parties to notify transactions to the CCC, however, have been highly reputable global electronics and pharmaceutical firms, respectively, represented by experienced competition counsel. Their decision to notify with the young and – at that moment still entirely untested – competition authority is, in our view, a vital sign of success for the CCC. Some observers at the EU in Brussels and at the OECD in Paris have called the high level of the pioneering notification a “stroke of luck” for the CCC, as the quality of the Philips/Funai deal will give pause to other foreign firms that may have otherwise chosen to ignore the COMESA regime. “Transaction No. 1” thus has the potential to provide the necessary initial bite to the virgin CCC’s regulatory jaw.

5. Other externalities benefitting the common market and its participants

24. A functioning antitrust regime is beneficial to economic actors at all levels, from producers and importers down to the end user [12]. With COMESA’s joinder of competition-law jurisdictions, that benefit accrues to the entire region, especially as only a minority of member states have an antitrust law at present, with varying levels of enforcement [13].

25. When considering investments in Sub-Saharan Africa, one thinks of a single jurisdiction (for example, South Africa or Botswana). A functioning CCC will result in international investors considering COMESA instead of individual member states, promoting cross-border investments and thus enhancing COMESA’s attractiveness and competitiveness within the region as a destination for foreign direct investment.

26. In this respect, the most important advantage realised by COMESA is, in principle, the elimination of multiple merger filings in various African jurisdictions in respect of a single transaction which results in a cross-border merger transaction. Accordingly, the COMESA one-stop-shop structure saves significant amounts of time and money, obviating the parties’ need to examine and comply with each individual member jurisdiction’s merger guidelines and regulations, not to speak of multiple filing fees for a single cross-border transaction.

27. The establishment of COMESA as a competition watchdog is largely welcomed in the region and appears to be on a promising international path, as well. Teething problems like thresholds, timing and jurisdictional reach are hopefully close to finalisation, which will provide greater clarity to merging parties. If the CCC and the Board manage the process of “righting the ship” well and in a timely fashion, we envisage that the COMESA competition regime will actually “enhance” the region’s economic attractiveness for both foreign and local investors, and will promote rather than stifle cross-border transactions.

III. Righting the ship : Finishing the river crossing

28. Balancing its economic and legal benefits with the CCC regime’s present shortcomings prompts the inevitable question what the implications are for future cross-border merger notifications. To realise its full potential of fostering regional growth, it is vital that the COMESA ship is righted urgently.

– Merger thresholds need to be revised, if not outright introduced, as it is plainly non-sensical to have a zero-turnover threshold. The CCC itself appears to recognize this crucial deficiency, as it claims that : “Small companies that fall below a given threshold will not need to undergo the authorisation process.” [14] Properly-scaled thresholds, i.e., thresholds that are appropriate for the region’s economy, will also permit the CCC to ensure an efficient allocation of enforcement resources, avoiding the risk of being flooded by de minimis merger-control filings that would otherwise require review.

– Article 23(3) of the Regulations implies that transactions would be notifiable to the Commission even if only one of the merging parties operates in two COMESA Member States and the other merging party does not operate in “any” COMESA Member State. This is also emphasized in the Guidelines on Merger Assessment, which suggest that a merger is notifiable even if only one of the merging parties has activities in at least two COMESA Member States and the other party has none. This would mean that a merger must be notified, or is otherwise subject to COMESA scrutiny, even if there is no nexus between one of the merging firms and the Common Market. If this interpretation is indeed maintained, we believe that it will place an undue burden on potential merger parties and undermine one of the crucial objectives of any merger regime : to gain international acceptance.

29. Absent swift rectification, these concerns may render the COMESA Competition regime unworkable. At best, they will merely deter parties from making a notification (hoping for lack of enforcement). Worse, these regulatory uncertainties may cause undertakings to abandon potential transactions entirely.

30. Addressing the issues identified above is imperative to ensuring the CCC’s viability as a recognised international competition authority. In addition, we believe that the agency faces other – perhaps less serious, yet nonetheless important – obstacles on the final leg of its proverbial river crossing :

– COMESA’s express inclusion of so-called “para-statals” (i.e., fully or partial government-owned enterprises) within the penumbra of its jurisdiction under Article 3 is commendable and indeed important, given the comparative prevalence of such enterprises in the region and the risk of abuse inherent in their transformation into privatised businesses. The CCC must be careful, however, not to be side-lined by the member states’ governments, as the Regulations’ prior-exemption exception of Article 3(2) presents a potentially appetising jurisdictional loophole for dominant para-statals being shielded from review by the CCC.

– The Guidelines’ indirect reference to EU rules poses a threat of commingling divergent standards and interpretive assessments thereof, e.g., applying guidance on the SIEC standard to an SLC regime.

– The trigger date for notification is also not clear. Article 24(1) requires notification within 30 days of a “decision to merge.” The Guidelines indicate that a decision to merge is “construed when there is established a concurrence of wills between the merging parties in the pursuit of a merger objective.” Neither the commercial nor the legal meaning of this phrase is entirely clear and will make it difficult for companies to determine when to notify a transaction, resulting in the risk of facing penalties for late filing. Clarification of all relevant “notification triggers” is therefore highly desirable from the perspective of affected undertakings.

– While the CCC’s previously identified “preliminary assessment” of the anticipated fees appears to claim otherwise, we are of the (likewise preliminary) view that COMESA’s merger filing-fee is not in accordance with other jurisdictions. These fees constitute a danger that may help to undermine COMESA’s international and legal acceptance. Especially when compared to established global regimes – such as the EU’s DG COMP or the German Bundeskartellamt (with no and relatively low filing fees, respectively) – the potential fees COMESA may charge notifying parties under its Rules pose a serious threat to the regime’s legitimacy.

– On a positive note in this regard, the CCC has taken notice of – and acted swiftly in response to – critics’ public comments relating to the initially vague arithmetic determination of the CCC’s filing fees. The alternative two-part provision contained a connecting “higher of” reference, which caused unintended confusion among competition practitioners [15]. Many a law firm’s initial assessment and subsequent public client alert therefore referred to COMESA fees being the “greater of” the two computational bases. The CCC stepped in within merely weeks and issued clarifying guidance. While it did not correct the ambiguous language in the Rule itself, it issued a public notice of Interpretive Meaning of the Notification Fee Pursuant to Rule 55(4) of the Amended COMESA Competition Rules on 26 February 2013, thereby putting an end to speculation that filing fees would indeed be calculated on the higher-of basis.

– The need for original copies to be filed with the notification goes against the global trend of leading enforcement agencies, such as the FTC or DG COMP, increasingly allowing filings to be made electronically. It hinders efficiency and increases administrative and timing burdens on the parties, which is inconsistent with the CCC’s stated objectives and, indeed, contrarian to the developments of the 21st century.

31. Several international networks and associations comprising members from various antitrust jurisdictions worldwide have provided significant contributions to the CCC, working closely with the agency to propose practical and workable solutions to the identified hurdles. Organisations that have provided input include the International Competition Network (ICN) (which currently includes 128 agency members from 111 jurisdictions and is the most extensive network of competition authorities worldwide) and the American Bar Association’s two sections of Antitrust Law and of International Law. They have offered the CCC assistance, particularly in the provision of commentary and proposed amendments to the merger assessment guidelines, suggesting workable (and tested) solutions in relation to the various teething problems it faces [16]. We note that there is a fine line between receiving offers of support and the affirmative seeking of advice – we would encourage the CCC to undertake the latter at all stages of its developmental process, as its legitimacy in the eyes of the global competition community will only be enhanced, not reduced, by its efforts to integrate itself into the global network of enforcers. As has been the mantra of many an NCA official’s speeches over the past decade, convergence of international antitrust regimes is crucial to effective enforcement on the one hand and rational decision-making by businesses on the other. For COMESA to fall in line with the global trend of convergence, the CCC must not shy away from seeking the input of other, more advanced sister agencies and organisations such as the ICN, which – in our experience – are always glad to provide their support.

32. Finally, one key inquiry faced by any nascent international legal regime is whether the unified, single decisions made under a harmonised legal system are likely to be superior to the alternative, i.e., the sum of those applying diverse national laws [17]. Even if uncoordinated domestic regimes are deemed inefficient, it does not automatically follow that a single multi-national regime will yield more pareto-optimal outcomes [18]. Historically, there have been three main criticisms levied against international antitrust regimes. They include higher monitoring costs, higher enforcement costs, and the loss of innovation [19]. Considering each of them in detail would breach the bounds of the present article. Suffice it to note that some scholarship suggests agency costs to be higher at an international level, with the concomitant effect that bureaucrats will have more ability to fashion rules in their own interest [20]. A parallel risk is that the multi-national process may appear more opaque than the more established and well-known domestic procedures, resulting inter alia in greater difficulty of monitoring those responsible for carrying out enforcement policy, as well as less innovative (because less diverse and more static) approaches to enforcement or resolution of conflicts [21]. An international regulator outside the direct control of government may pursue interests distinct from its members, which may not mirror the interests of the citizens living in the member states. Taken together, these risks may cause a global regime to appear less in the public interest than maintaining the sovereignty of individual domestic rules [22].

33. While these critiques may have valid application in developed countries with mature competition authorities where a global harmonised regime is being considered, they appear somewhat neutralised in the case of COMESA. For one, a majority of the Member States did not have pre-existing competition-law regimes, and the remainder of the NCAs were arguably inexperienced and not developed. We submit that having at least a functioning and well-funded competition enforcement regime — centralised or decentralised — is more beneficial that having none at all.

IV. Conclusion

34. As with every rubicon worthy of its proverbial name, COMESA’s crossing of the antitrust divide has advanced beyond the point of no return. And rightly so : the efficiency gains, consumer benefits, and appeal to investors derived from a stable, transparent and predictable competition-law enforcement that transcends national borders all promise a net positive return. We see this prospect holding true despite early teething problems, as the CCC appears to be in the process of rectifying most, if not all, of them in due course.

35. The CCC’s future enforcement performance being in line with international best practices will be the ultimate litmus test for increased investment in the region and COMESA’s economic growth. One gladly wishes to take the CCC by its word in describing the impetus behind the unified antitrust regime : “cooperation and transparency in procedures [are] essential for business as they would not be subjected to excessive costs arising from multiple, parallel and poorly coordinated investigations.” [23] Businesses probably could not agree more – but a mere mission statement is a far cry from actual, competent enforcement. For the time being, the CCC’s ship hasn’t made it to the other river bank and is still traversing unpredictable rapids.

36. The near future will doubtless reveal several important benchmarking metrics of the CCC’s merger review performance, for instance : how many transactions are notified ? How quickly can the authority render decisions on most routine notices ? How robust is its underlying economic and legal reasoning ? It may take additional time before a complex merger demanding in-depth analysis will challenge the CCC to show its true analytical prowess and administrative ability to deal with difficult cases.

37. The CCC has the features and multi-national support that allow it, in principle, to become a robust regional competition authority. That said, its success is not a foregone conclusion, and the agency must ensure that it has the sanctioning not only of COMESA’s regional member states and domestic NCAs, but also of the broader international antitrust community.


[1] Even when compared to the worldwide GDP leader and key historical role model of multi-national competition-law jurisdictions – the European Union – these figures are impressive for a comparatively young African agglomeration of economies. (By comparison, the EU has 27 member states, a population of 501 million, and a GDP of $16 trillion.)

[2] Article 24 of COMESA Competition Regulations 2004.

[3] The “missing-nexus” and “zero-dollar” threshold problems have caused several antitrust experts – including private practitioners, EU Commission officials and US enforcement agency representatives – to scoff at even a passing mention of COMESA as a relevant jurisdiction to take into account when counselling clients on worldwide merger-notification obligations. The CCC must act with speed and determination to rectify these problems to maintain its bona fides vis-à-vis both its international sister agencies as well as private parties appearing before it.

[4] Letter from COMESA Competition Commission, dated 22 March 2013 (“CCC March letter”), at § 14, available online at

[5] CCC news release, COMESA Competition Commission Seeks Public Comments on its Draft Guidelines, available at :

[6] Art. 1 of COMESA Competition Regulations, December 2004, available at….

[7] For instance, Art. 5 of the Regulations, and the CCC’s mandate that national competition laws in the region “should increasingly come into alignment.”

[8] CCC March letter, at § 5.

[9] J. Almunia, Commission Vice President and Competition Commissioner, Mergers : competition authorities agree best practices to handle cross-border mergers that do not benefit from EU one-stop shop review, 9 November 2011. See also J.J. Parisi, A Simple Guide to the EC Merger Regulation, January 2010 (“The EC Merger Regulation (ECMR) was intended to provide a ‘level playing field’ in a ‘one-stop shop’ for the review of mergers with significant cross border effects.”).

[10] CCC March letter, at § 17.

[11] Ibid. at § 16.

[12] The European Commission’s 2012 report on competition policy showed that without an effective European competition policy, the internal market cannot deliver its full economic potential. The COMESA Regulations’ Preamble notably posits the tripartite goals of “economic growth, trade liberalisation and economic efficiency” as drivers for the regional antitrust regime.

[13] Egypt, Kenya, Malawi, Mauritius, Seychelles, Swaziland, Zambia and Zimbabwe.

[14] COMESA CCC Frequently Asked Questions.

[15] Rule 55(4) of the amended COMESA Competition Rules reads as follows : “Notification of a notifiable merger shall be accompanied by a fee calculated at 0.5% or COM$ 500 000, or whichever is lower of the combined annual turnover or combined value of assets in the Common Market, whichever is higher”.

[16] Ibid.

[17] JO McGinnis, The Political Economy of International Antitrust Harmonization, 45 Wm. & Mary L. Rev. 549 (2003), p. 555.

[18] Ibid, p. 555.

[19] Ibid, p. 560.

[20] Ibid.

[21] Ibid, at p. 560, 565.

[22] Ibid, p. 561

[23] CCC March letter, at § 5.