Media PAIA request reveals evidence underlying South African Competition Commission dawn raid

By Tyla-Lee Coertzen

Following the South African Competition Commission’s (“SACC”) dawn raids conducted on eight major South African insurance firms in August of 2022, a popular South African news resource, News24, was successful in a Promotion of Access to Information (“PAIA”) request to gain access to the court documents which granted the SACC permission to conduct the dawn raid.

In our previous update on the matter, we recorded that the SACC conducted a dawn raid on the following insurance firms: Discovery Limited; Hollard Insurance Group (Pty) Ltd; Momentum, a division of MNI Limited; Old Mutual Limited; BrightRock Life Limited; FMI, a division of Bidvest Life Limited; Professional Provident Society Limited, and South African National Life Assurance Company (Pty) Ltd. The dawn raids were conducted as part of the SACC’s ongoing investigation into potential collusion between insurance firms.

Collusion is described as a per se prohibition in the South African Competition Act, 89 of 1998 (as amended) (“the Act”). This means that competitors who are found to have colluded with each other may not raise efficiency defences. Mere participation in a restrictive horizontal practice will attract administrative penalties and imprisonment.

The PAIA request provided News24 with access to certain evidence including emails circulated between insurers which the SACC believes to have taken place since 1989. According to News24, the SACC alleges that historically, the insurers formulated a ‘rate book’ in which information regarding information regarding prices of certain products were recorded. This rate book was allegedly exchanged between insurers. Thereafter, it is alleged that the insurers exchanged floppy disks with sensitive pricing information. In more recent times, it is alleged that pricing information was uploaded onto password protected online platforms, and the passwords were shared between insurers. The SACC also alleges that technical information regarding the design of products were shared, thereby allowing insurers to decrease competition amongst themselves. To see the full News24 article on the matter, click here.

Primerio director, John Oxenham, who notably acted for the leniency applicant in the infamous bread cartel says: “After a lengthy hiatus, it is apparent that the SACC is using significant investigative tools in an effort to uncover and prosecute potential cartel conduct. In the past, this mechanism of investigation, namely dawn raids, has been of significant effect in assisting the agencies to fulfil its mandate of preventing corrupt activity.”

Fellow Primerio director. Michael-James Currie said “one of the key challenges, for all parties involved, in cases where the alleged conduct was often historic, there is a lack of credible witnesses to contextualize certain evidence. It very often happens that evidence, when considered in isolation, presents a very different picture than what truly transpired”.

The Risk of Price Regulation: A Review of Recent Abuse of Dominance Cases in South Africa

By: Michael-James Currie, Gina Lodolo and Nicola Taljaard 

As aptly put by Campton P[1]it is probably safe to say that in the developed world, competition is now accepted as the best available mechanism for maximizing the things that one can demand from an economic system in most circumstances. Economic regulation is increasingly perceived to be at the opposite end of the spectrum – it tends to leave a larger number of people with a reduced real income and a lower standard of living.” 


Regulatory intervention in the competition law arena, which is aimed at ensuring markets function optimally and are competitive, is the essence of most traditional competition law regimes. There is, however, an increasing risk of over regulation and over enforcement which may undermine incentives to invest and innovate, ultimately leading to a dampening effect on pro-competitive conduct.

Competition enforcement should principally be aimed at ensuring features of the market do not distort competition on the merits. It should not be used as a tool for price regulation. In this paper, we explore some of the recent abuse of dominance cases in South Africa – most notably the “price gouging” cases – adjudicated during the height of the Covid-19 pandemic and flag several risks that may materialize if those cases are to be used as blueprints for future enforcement activity.

In this paper we explore the benchmarks set out in what was the leading jurisprudence on excessive pricing in South Africa, namely the Sasol Chemical Industries Limited v Competition Commission[2]  before the Competition Tribunal (“Tribunal”) and Competition Appeal Court  (“CAC”)[3] respectively and how the excessive price test and standards against which excessive pricing cases have recently been adjudicated, has developed – both in terms of the amendments to the legislation as well as recent cases assessed under the “price gouging” rubric. This is particularly topical as we expect to see an increase in the number of excessive pricing cases brought in South Africa.

In the CAC decision of Babelegi,[4] however, Judge Dennis Davis himself noted the challenging nature of the excessive pricing doctrine for competition authorities, as it “requires them, to a considerable extent, to act in the manner of a price regulator”.[5] He further notes in relation to these challenges, that the decision by the CAC in Babelegi was even more complicated in light of the fact that it had to be “determined through the prism of an excessive pricing provision” which was not specifically designed for the complex and novel conditions brought about by the pandemic.[6] 

Against this backdrop, we discuss the Sasol case as well as unpack the price gouging cases and highlight several concerns associated with an overly interventionist approach in prosecuting perceived excessive pricing cases.

Excessive pricing: Unpacking the Sasol Benchmark

Excessive pricing cases have been inherently difficult to sustain by the South African Competition Commission (“SACC”), especially in industries where there are low barriers to entry. This is because, in ordinary circumstances, for an incumbent firm to charge excessive prices, they need to be a quasi-monopolist, otherwise the charging of excessive prices typically encourages entry by third parties as there are pecuniary profits to be made. This new entrant would ordinarily result in the incumbent reducing prices to ultimately reach competitive levels. In simple terms, the market self regulates.

Before discussing the price gouging cases, it is useful to briefly sketch an overview of excessive pricing cases in South Africa and the clear benchmarks set in Sasol. In this regard, the CAC in Sasol noted the complexity associated with excessive pricing cases in that: “[p]ricing power derives from market power. However, the mere possession of market power is not contrary to competition law. Indeed, some important source of market power is innovation and other, pro-competitive conduct. The rents derived from the possession of market power will, in most circumstances, sooner or later attract new entrants, the more so if the dominant incumbent takes ‘excessive’ advantage of its privileged position. And so, the effort to acquire market share and, therefore, pricing power and the attention it attracts from rivals are an important driver of the competitive process.”[7]

Notwithstanding the likelihood that the market will find a way to self-regulate through the threat of new entrants, when considering an excessive pricing case, there are further factors that need to be taken into consideration to determine whether the price is indeed excessive. For example, the Tribunal in Sasol considered the risk versus reward dynamic and the reasons why a dominant firm “is able to charge a price above the economic value of the good or service”.[8] An oft used example is prevalent in the context of patents. A patent holder is conferred a statutory monopoly position and is entitled to charge prices which are substantially above the cost of producing the patented product. This is because, simply put, a manufacturer must be entitled to benefit from the risks of developing a patented product (which has no guarantee of success) as well as the costs associated with failed attempts. If a firm is deprived of the ability to potentially earn substantial profits if they are successful in developing a patented product, why take the risk in trying to develop such a product in the first place. This would clearly deprive consumers of innovation.

The Tribunal’s major gist in the Sasol case was that Sasol, as a previously State-Owned Enterprise (“SOE”) achieved its dominance by virtue of State support as opposed to risk and innovation.[9] Accordingly, the Tribunal found that Sasol had engaged in excessive pricing. Sasol, however, successfully had the Tribunal’s finding overturned on appeal.

In short, the CAC applied a revised costing calculation mechanism which led to the conclusion that Sasol had implemented substantially lower mark-ups in comparison to those calculated by the Tribunal, and in relation to this determination, established that returns that are above economic value are not unreasonable per se.[10] Further, the CAC in Sasol noted that pricing is not excessive merely because it is above economic value, rather, such pricing should be substantially higher than the economic value: “some measure of latitude has to be given to firms with regard to pricing. If not, a court will become a price regulator”.[11]

While the CAC deviated slightly from the Tribunal in imputing significant importance to the question of how Sasol obtained its market position, the CAC and Tribunal still aligned to the extent that innovation and risk-taking “may have a bearing on economic value of its product and the reasonableness of the price” – it is, however, not a “license for patent holders to engage in excessive pricing”.[12]   

Subsequent to Sasol, the Competition Act, 18 of 2018 (“Amendment Act”) came into force to provide that when determining whether a price is “excessive”, the SACC must inter alia, take into account  “the structural characteristics of the relevant market, including the extent of the respondent’s market share, the degree of contestability of the market, barriers to entry and past or current advantage that is not due to the respondent’s own commercial efficiency or investment, such as direct or indirect state support for a firm or firms in the market”.8 (own emphasis) 

Further, the Amendment Act changed the test for excessive pricing from “a price for a good or service which bears no reasonable relation to the economic value of that good or service; and is higher than [a certain value]” to now provide that a price can be excessive where the price is “higher than a competitive price and whether such difference is unreasonable.”  This Amendment makes the position even more opaque. 

While cases such as Sasol remained the guiding precedent, the quantitative benchmarks were relatively clear. However, the outcome of the excessive pricing decisions in Dischem[13] and Babelegi, leaves much to be said about the certainty of excessive pricing cases to follow. In this regard, we argue below that the latter judgments create uncertainty considering their application outside of the ambit of the anti-price gouging regulations (“Regulations”)[14] and their deviation from the notion that excessive pricing may incentivize entry into the market and that the market self-regulates.

A Discussion of the Subsequent Price Gouging Cases

Price gouging occurs when sellers of goods and/or services increase their prices for these economic commodities to levels considered unreasonable or unfair, usually during periods of extreme supply or demand changes in the market.[15]

As a result of a short-term change in market conditions, price gouging is a form of excessive pricing which is usually subject to a different standard from the usual excessive pricing tests contemplated by competition laws.  

In order to address price gouging concerns in South Africa during the Covid-19 pandemic, the South African Government declared a State of National Disaster in March 2020, and published the emergency Regulations. These Regulations applied to both the supply and the pricing of certain ‘essential’ goods.[16]

In short, the Regulations prohibited firms from increasing prices unless it was directly proportional to a cost increase. Policy issues aside, the Regulations could not be faulted in so far as they were clear and ensured that all players in the market knew what the rules were – i.e., a key tenet of the principle of legality.

Notably, however, the two precedent-setting price gouging cases adjudicated before the South African Competition Authorities, were based on conduct which preceded the promulgation of the anti-price gouging Regulations. The Regulations were therefore not applicable, and the cases were adjudicated under the excessive pricing prohibition in the Amendment Act. Moreover, it was also the first excessive pricing cases to be adjudicated under the new amended excessive pricing test following the amendments to Competition Act 89 of 1998 (“Act”). As some final contextual background, these cases were brought on an urgent basis and parties only had a matter of a few weeks to prepare economic evidence in these cases.

The Dischem and Babelegi decisions, which both concerned instances where the respondents had increased the prices they charged for face masks during the initial stages of the Covid-19 pandemic, were decided within a month of one another.

Both parties disputed their dominance in the market. In Babelegi, it was not disputed that Babelegi only had less than 5% market share, yet it was held to be “dominant” based on short term market power. In Dischem, the Tribunal found it unnecessary to conduct a market share analysis as Dis-Chem’s market power was directly inferred from its conduct. The Tribunal held that Dis-Chem’s ability to significantly increase the prices of face masks all the while increasing sales volumes was direct evidence of Dis-Chem having market power. 

In Babelegi, the Tribunal held that a firm’s ability to increase prices within a short period of time is indicative of dominance and that market power or dominance must be determined with reference to context. In this regard, the Tribunal states that even small firms may have market power. In emphasis of the point that even small firms may be considered dominant,we note again that Babelegi had less than a 5% market share and was still deemed to have had market power as it had the ability to profitably increase its prices without providing any cost justifications.

Similarly, in Dischem, the Tribunal found that the SACC had established a prima faciecase of excessive pricing based on Dis-Chem’s ability to substantially increase its profit margins and pricing above what is reasonable, which, in relation to essential goods was held to be any increase whatsoever.

Although the CAC upheld the Tribunal’s decision in Babelegi, Judge Dennis Davis made the following noteworthy statement:

“These observations do not detract from the complexity of the task confronting this court, particularly in the present case where at the relevant time, government had not introduced bespoke price gouging regulations. As a result, the present case has to be determined through the prism of an excessive pricing provision [which] was not intended for use in the specific and unique conditions of a Covid 19 pandemic. The present case is mercifully somewhat more confined than might otherwise confront a competition authority in dealing with an excessive pricing case.”[17]

The CAC therefore acknowledged that the “price gouging” case was really a product of extreme market circumstances and an unfortunate lacuna in the regulatory environment. It should therefore not be used as a benchmark against which all future excessive pricing cases are adjudicated. Failure to consider the unique circumstances which both the Tribunal and CAC sought to emphasize throughout their respective decisions, will significantly water down the excessive pricing standards and most notably, create uncertainty for businesses in the pursuit of profit maximizing conduct fearing the risk of being sanctioned for taking advantage of short-term market fluctuations.

Following the Dischem and Babelegi decisions, in Tsutsumani,[18]the Tribunal decided the first case under the Regulations, read with section 8(1)(a) of the Amendment Act, wherein which it also confirmed that the Regulations were not in force during the complaint period of Babelegi.[19]  Tsutsumani emphasised the importance of “context” (as also emphasised in the Babelegi CAC decision) – being the unprecedented Covid-19 pandemic.[20] In this regard, to determine whether the price was “excessive”, the Tribunal in Tsutsumani applied the various benchmarks set out in section 8(1)(a) and 8(3)(a)-(f)[21] of the Amendment Act. In this regard, to determine whether a price that is higher than a competitive price is unreasonable, the Amendment Act, in section 8(3)(b)(f), provides for consideration of “any regulations made by the Minister, in terms of section 78 regarding the calculation and determination of an excessive price.”  It was within this framework that the Tribunal applied the Regulations to ultimately make an adverse finding against Tsutsumani.

To establish dominance, the SACC, however, relied on Dischem to find that, even though Tsutsumani only entered the market during the pandemic, its market power could be inferred by its pricing.[22]  Even though Tsutsumaniargued thatthere were 18 other alterative suppliers who responded to the Request for Quote from the South African Police Service, the SACC went further to place reliance on Babelegi wherein it was found by the CAC that “a store, by merely having PPE products in the context of such excess demand could enjoy market power. Multiple firms – even stores located in the same shopping mall – could conceivably exercise market power in the supply of PPE vis-a-vis their customer”.[23] The Tribunal again, however, in making a finding that Tsutsumani was dominant, emphasized that Tsutsumani was a “lucky monopolist” that capitalized on a crisis and further that even though there were alternative suppliers, “the lucky monopolist might not be a single firm in the relevant market. Given the exogenous factors, multiple firms can be found to be dominant during the crisis[24] – thereby confining its decision to this crisis context only.[25]  

Interestingly, in Tsutsumani, the Tribunal suggests that the National Disaster Regulations prescribe a 10% benchmark.[26] This appears to be an error as the National Disaster Regulations suggest that “any markup” may be scrutinized. The error arises likely by a reading of the Dischem[27] and Babelegi[28]   decisions where the SACC considered the United States wherein a 10% markup during price gouging situations is usually the benchmark. Accordingly, in conjunction with the uncertainty created regarding the conferring of short-term market power as a benchmark for dominance, there is further uncertainty as to what profit margin may prima facie be viewed as excessive. This results in a lack of clarity in how businesses can ensure that price increases are proportionate to cost increases in circumstances where the increase is usually benign. This places a significant administrative burden on firms and an unjustified increased cost of compliance.  It would be preferable if there was a clear materiality threshold so that competitively benign or cost justified price increases do not get caught in the snare of an overly conservative approach to excessive pricing.

Accordingly, the context in which these cases were decided is instructive. The risk, however, of the price gouging decisions finding application in other markets or other market circumstances is not immaterial. The incoming Commissioner of the SACC has expressly stated that the price gouging cases provide a basis for the SACC to implement the amendments to the Act – these include not only excessive pricing but also amendments to the price discrimination (and several other abuse of dominance) prohibitions. In this regard, newly appointed Commissioner, Ms Doris Tshepe, whose role is inter alia to fulfil the mandate embodied in the amendments to the Act, stated that [w]hat the Commission did, together with the Competition Tribunal and the CAC [Competition Appeal Court], during the COVID crisis, was to show that there is capacity to find and deal with matters as efficiently as possible. We could learn and use those lessons to try and implement the amendments [to the Competition Act].”[29] The Commissioner added further that “[w]e don’t have 10 years to set precedents on the new amendments. There is an urgency, we are in a crisis, our economy is in crisis, and in order to achieve desirable outcomes we are going to have to work a bit faster”.[30] 

Accordingly, while much of this paper has been dedicated to the price gouging cases, the principles underpinning these cases may well be used in pursuing other sectors or instances of market shocks which are unrelated to the Covid pandemic. We suggest that this would pose a significant risk of regulatory intervention and amount to quasi-price regulation.

Market Inquiry Powers: A Power Tool to Price Regulate  

In addition to the lower standards and approaches to market power and excessive pricing, we note that the amendments to market inquiry provisions in the Act provide expansive and far-reaching powers to the SACC to pursue behavioral and structural remedies.

Previously, the SACC’s powers, following the conclusion of the market inquiry, were limited to making recommendations to the Legislature to address any perceived features in the market which hinder effective competition. The SACC now has powers to directly impose any remedy (except penalties), including behavioral and structural remedies (the latter to be confirmed by the Tribunal) directly following the conclusion of a market inquiry. Unlike the sanctions for abuse of dominance findings, which are typically the imposition of an administrative penalty by the Tribunal, the SACC could notionally impose more direct pricing related remedies following a market inquiry.

The test against which the SACC will assess whether any features distort competition is also lower than the “substantial lessening of competition”. While market inquiries typically do have lower standards, the power to make behavioral or structural remedies based on a standard that does not require a showing of substantial lessening of competition poses a significant risk to firms.

To date there have not been any market inquiries which have been concluded (although there are several which have, or will soon, commence) and hence it is too early to make any pronouncements on the manner in which market inquiries are used as an investigative tool to price regulate markets. Suffice to note in this paper that the SACC has an important responsibility not to overstep and utilize its broad powers in pursuing perceived distortions by price regulating markets.


The price gouging cases in South Africa are somewhat unfortunate. While they protected the public from significant price hikes for critical products during the pandemic, the urgent manner in which they were brought and the fact that they were the first cases assessed under the amended excessive pricing prohibitions, has resulted in an application of the excessive pricing test which may not be fit for purpose. Notwithstanding the CAC’s cautionary remarks that context matters in excessive pricing cases and that Covid-19 posed unique challenges, the principles set out in those cases are likely to be utilized in pursuing cases unrelated to the Covid-19 pandemic. Excessive pricing cases, which are pursued too liberally based on short term market power and without clear benchmarks as to what constitutes “excessive”, amounts to price regulation (or at least an attempt to price regulate). This risk should be guarded against by the competition adjudicative bodies.  Having clear anti-pricing gouging regulations in instances of national disasters published (as they were in South Africa albeit after the conduct in respect of the precedent setting price gouging cases took place) would be preferable to using traditional excessive pricing tests and frameworks to penalize firms who only temporarily possess market power due to a demand or supply shock.

The SACC has, however, indicated in several instances, either directly or indirectly, that the principles set out in the price gouging cases will be utilized going forward. Combined with the SACC’s expanded market inquiry powers, there is a material risk of over regulation in pursuit of price regulation which is not what competition law was designed for.

[1]            Crampton P “Striking the right balance between competition and regulation: The key is learning from our mistakes.” OECD 16-17 October 2002.

[2]            Sasol Chemical Industries Limited v Competition Commission 48/CR/Aug10 (“Sasol Tribunal”).

[3]            Sasol Chemical Industries Limited v Competition Commission 2015 (5) SA 471 (“Sasol CAC”).

[4]            Babelegi Workwear and Industrial Supplies CC v The Competition Commission of South Africa 186 CAC (“Babelegi”).

[5]            Babelegi Para 41.

[6]            Babelegi Para 43.

[7]            Sasol CAC Para 2.

[8]            See Sasol Tribunal Para 101 and Para 94 read with footnote 44 wherein it was stated that “the real distinction to be drawn lays in those advantages which are the product of the dominant firm’s own innovation, risk taking and investment, for example stemming from the patent or an innovation. For example, if a firm invests particular software or innovates and then patents, it will enjoy certain advantages as a result this would be a return for its own efforts and risk taking and innovation and should be rewarded”.

[9]            See Para 76 of Sasol Tribunal where it was stated that “the principal issue thus was whether or not one should take SCI’s feedback cost advantage into account in favour of SCI, given the peculiar circumstances as alleged by the Commission, namely that this advantage is not as a result of SCI’s own risk taking and innovation, but the result of its history of state support”.  

[10]          Sasol Tribunal Para 174.

[11]          Sasol CAC Para 184.

[12]          Sasol CAC Para 173.

[13]          Competition Commission of South Africa v Dis-Chem Pharmacies Limited CR008Apr20 (“Dischem”).

[14]          The Consumer and Customer Protection and National Disaster Management Regulations and Directions GN R350 GG 43116, 19 March 2020.

[15]          W Boshoff “South African Competition Policy on Excessive Pricing and its Relation to Price Gouging during the Covid-19 Disaster Period”(2020) 0 SAJE 1.

[16]          J Oxenham & MJ Currie “Covid-19 Price Gouging Cases in South Africa: Short-term Market Dynamics with Long-term Implications for Excessive Pricing Cases”(2020) 11 JECLAP.

[17]          Babelegi Workwear and Industrial Supplies CC v Competition Commission of South Africa CR003Apr20 para 41.

[18]          The Competition Commission v Tsutsumani Business Enterprises CC COVCR113Sep20 (“Tsutsumani”).

[19]          Tsutumani Para 3.

[20]          Para 13.

[21]          Section 8(1)(a) of the Amendment Act provides that “it is prohibited for a dominant firm to— (a) charge an excessive price to the detriment of consumers or customers”. Further section 8(3)(a)-(f) of the Amendment Act provides that “any person determining whether a price is an excessive price must determine if that price is higher than a competitive price and whether such difference is unreasonable, determined by taking into account all relevant factors, which may include— (a) the respondent’s price-cost margin, internal rate of return, return on capital invested or profit history; (b) the respondent’s prices for the goods or services— (i) in markets in which there are competing products; (ii) to customers in other geographic markets; (iii) for similar products in other markets; and (iv) historically; (c) relevant comparator firm’s prices and level of profits for the goods or services in a competitive market for those goods or services; (d) the length of time the prices have been charged at that level; (e) the structural characteristics of the relevant market, including the extent of the respondent’s market share, the degree of contestability of the market, barriers to entry and past or current advantage that is not due to the respondent’s own commercial efficiency or investment, such as direct or indirect state support for a firm or firms in the market; and (f) any regulations made by the Minister, in terms of section 78 regarding the calculation and determination of an excessive price.”

[22]          Tsutsumani Para 61.

[23]          Para 62.

[24]          Para 71.

[25]          Para 70. In this regard even though there were alternative suppliers, the South African Police Service lacked sufficient information on the status and available volumes from other suppliers and feared that they would be able to obtain the stock required.

[26]          Tsutsumani Para 90.

[27]          Dischem Tribunal Footnote 66.

[28]          Babelegi Tribunal Para 98-103.

[29]          Media Statement: New Competition Commissioner Doris Tshepe says she is Ready to Push Boundaries and be Innovative (2022) (Available at 1.

[30]          Media Statement: New Competition Commissioner Doris Tshepe says she is Ready to Push Boundaries and be Innovative (2022)(Available at 1.

Competition Commission Releases Online Intermediation Platform Market Inquiry Provisional Summary Report

By Nicola Taljaard

On 13 July 2022, the South African Competition Commission (“Commission”) released a Provisional Summary Report (“Report”) on the Online Intermediation Platforms Market Inquiry (“OIPMI” or “Inquiry”) which was initiated on 19 May 2021. The Commission initiated the Inquiry following reason to believe that certain features of the online intermediation platforms market could be impeding, distorting or restricting competition.

The Commission placed specific emphasis on getting small and medium enterprises (“SMEs”) and historically disadvantaged persons (“HDPs”) to participate in the relevant markets, and premised the Inquiry on the following competition and public interest considerations in relation to market features:

  • Hampering competition between the actual platforms;
  • Hindering competition between business users or undermining consumer choice;
  • Giving rise to abusive treatment of business users; and
  • Which may have disadvantageous impacts on the ability of SMEs and/or HDPs to participate in the market.

The Commission further noted a lack of participation by HDPs as a common thread which prevails in the online intermediation platforms market, which seems to languish in an untransformed state relative to the broader South African economy.

The remedial action proposed in the Inquiry ranges in severity based on the impacts which the market features have on competition, particularly in relation to SMEs or HDPs. The leading platforms on which the remedial actions are proposed are the Apple App and Google Play stores, Takealot, Property 24 and Private Property, Autotrader and, and Airbnb, Mr. Delivery and UberEats, and Google. Although the Commission did not consider it necessary to enter a dominance inquiry, it did remark that these platforms show features of dominance when considering their positions in the respective markets.

In addition to the more general constructive proposals, the Commission also suggests provisional remedies which are more robust, including against Google, stating that it plays an integral role in how consumers interact with relevant platforms. In this regard the Commission intends to further its inquiry into the viability of keeping Google Search as the default search on mobile devices in South Africa.

The OIPMI came to the provisional conclusion that the digital economy is deficient in relation the country’s transformation goals and deviates significantly from the transformation trends of other traditional industries. The lack of transformation in most of the industries investigated as part of the intermediation platforms continues to display major barriers to entry for HDP entrepreneurs. This conclusion is particularly pertinent in light of the ever-widening digital divide.  

The Commission has made all of the documents and public submissions in relation to the Inquiry, as well as the Summary Report (which can be accessed here) available on its website. The public has six weeks within which to submit comments to the Summary Report, after which the Inquiry body has committed to consider the views and incorporate changes, where appropriate, to the final report and findings which will be released in November 2022.

South African Competition Tribunal Hands Down Another Price-Gouging Case: Face Masks Supplier Fined Maximum Penalty

By Michael-James Currie and Nicola Taljaard

[Currie is a director at Primerio and Taljaard is a lawyer at Primerio]

On 28 April 2022, the South African Competition Tribunal (“Tribunal”) handed down a decision in which it found Tsutsumani Business Enterprises (“Tsutsumani”) had contravened the excessive pricing prohibition contained in section 8(1)(a) of the Competition Act (“Act”). The conduct relates to the supply of face masks by Tsutsumani to the South African Police Services (“SAPS”) during the early stages of the Covid-19 pandemic.

The case against Tsutsumani is the first time that the Commission has successfully prosecuted a company for price gouging in the context of a public procurement process. The Commission did, however, successfully prosecute two companies for supplying masks at excessive prices at a retail level. In 2020, the Tribunal, in Competition Commission v Babelegi Workwear and Industrial Supplies CC (“Babelegi) and Competition Commission of South Africa v Dis-Chem Pharmacies Limited (Dis-Chem) the Tribunal found the respondents guilty of excessive pricing. In the latter case, the Tribunal warned that ‘material price increases of essential items such as surgical masks, even in the short run, in a health disaster such as the Covid-19 outbreak, warrants its intervention.’ This warning has certainly proved to be a serious one in light of the Tsutsumani case.

Tsutsumani is a general trader who participated in a tender for the urgent supply of face masks to South African Police Services (“SAPS”) during the first hard lock-down in South Africa. The complaint, lodged by SAPS to the Commission on 5 May 2020, alleged that Tsutsumani had engaged in price gouging following a major and unprecedented surge in the demand for face masks.

The Tribunal recognized the precarious position SAPS found themselves in as it required nine million masks per month during the relevant period and found that Tsutsumani acted exploitatively towards the SAPS by quoting the State entity R16.25 million for a 500 000 bulk mask supply order during April 2020. The determination that this price was excessive was made following evidence being led showing that Tsutsumani added a mark-up of 87%, giving them a 46% gross margin per mask. The monetary reward amounted to approximately R5.3 million in excessive profits alone. In accordance with the fines prescribed by legislation, the Tribunal fined Tsutsumani the maximum administrative penalty of 10% of its relevant turnover, amounting to a total of R3 441 689.10.

Assessing the South African price gouging cases purely from a competition law point of view, the Tribunal’s price gouging cases do raise several concerns regarding the extent to which excessive pricing – or abuse of dominance cases more generally – may be prosecuted in future. Most notably, the earlier price gouging cases found a firm which had only a 5% market share to be dominant on the basis that the firm possessed “market power”, albeit for a very short period, as a result of the Covid 19 pandemic. Basic economic principles tell us that price is typically influenced by the demand-supply relationship. Assessing “market power” with reference to a very short time frame notionally means, therefore, that any factors which give rise to a demand surge or supply shortage, may confer “market power” on a firm who may be subject to scrutiny if they increase their prices subject to such demand/supply pressures. Such a short term approach to assessing market power also naturally excludes any assessment to consider likely market entry or incentives to increase supply to respond to the demand surge.

Although the Tribunal and the Competition Appeal Court sought to emphasise the unique market dynamics due to the pandemic, the economic and legal principles set out in these decisions could be expanded to other cases beyond circumstances as significant as a global pandemic. It would be preferable if there were clear rules published as to when firms (even small firms) are at risk by raising prices during a state of national disaster (such as those which were in fact published in South Africa but only after the alleged conduct subject to the price gouging cases took place). While one might have some sympathy for the competition authorities wanting to protect consumers during the pandemic, by departing from traditional approaches to assessing excessive pricing cases so as to address price gouging concerns risks potentially undermining certainty and makes it difficult for firms to internally assess their conduct against the relevant benchmarks. The enforcement and application of competition law, like all laws, should always strive to advance legal certainty. This is why deviating from a body of international precedent and best practice should not be easily departed from. If it was clear that price gouging cases such as those prosecuted to date were only applicable during states of National Disaster that would go a long way to providing such certainty. But there is no basis why complainants are not able to apply the principles set out in the price gouging cases to all sorts of market dynamics which may ordinarily lead to significant price increases. We have already noted the Commission’s public warning to domestic airliners not to increase prices when a certain airliner carrier had its licence temporarily suspended for a few days. A case entirely unrelated to the pandemic.

So, with a lower standard against which to prosecute excessive pricing cases and the introduction of a reverse onus on the respondent to demonstrate that its prices are not excessive (in particular instances), coupled with a potentially much lower threshold against which to find a firm is “dominant” than traditionally the case, we expect to see more excessive pricing complaints being pursued.

South African Competition Commission Prosecutes Facebook for Abuse of Dominance

By: Gina Lodolo

On 14 March 2022, the South African Competition Commission (“Commission”) referred a complaint against Meta Platforms Inc is the parent company of WhatsApp Inc (“WhatsApp”) and Facebook South Africa (hereafter jointly “Meta”), to the Competition Tribunal (“Tribunal”) for allegedly engaging in abuse of dominance.

The referral follows WhatsApp (as part of the  Meta group) attempting to off-board GovChat from the WhatsApp platform. GovChat is a chatbot service connecting government to millions of citizens on issues of public concern (e.g. information on COVID-19 vaccinations and social grants). GovChat is reliant on the WhatsApp platform to function and connect users, without which its entire existence will be prejudiced.

GovChat utilizes WhatsApp for their services due to WhatsApp’s scale and consumer reach, however, Meta has attempted to off-board GovChat by placing reliance on WhatsApp’s terms and conditions to enforce a restriction against monetisation of confidential information through the use of consumer data obtained on the platform.

In this regard, the Commissions media release notes that “Facebook has imposed and/or selectively enforced exclusionary terms and conditions regulating access to the WhatsApp Business API, mainly restrictions on the use of data”.

The selective enforcement by Meta and attempts to off-board GovChat from the WhatsApp platform, according to the Commission, potentially violates Section 8(d)(ii) of the Competition Act 89 of 1998 (as amended) (“Act”) which prohibits a dominant firm from abusing its dominance by “refusing to supply scarce goods or services to a competitor or customer when supplying those goods or services is economically feasible”. In the alternative, the Commission alleges that Meta has engaged in an exclusionary act or refused to give a competitor access to an essential facility when it is economically feasible to do so (under section 8(1)(b) or 8(1)(c) of the Act).

The Commission has requested the Tribunal to:

  1. Impose the maximum penalty permitted under the Act, being 10% of Meta’s turnover;
  2. Interdict Meta from off-boarding GovChat; and
  3. Declare void exclusionary terms and conditions that are selectively applied in a manner that prevents potential competition by restricting access to the WhatsApp platform for potential competitors.

In its media release, the Commission stated that “access to digital markets is dependent on access to digital platforms including as in this case, access to an important digital communication platform”.

Primerio Director, Michael-James Currie notes that this complaint referral follows an interim relief application whcih GovChat successfully obtained against Facebook and WhatsApp in the beginning of 2021 in terms of which WhatsApp was prohibited from off-boarding GovChat.

This case, says Currie also coincides with a very proactive drive by the Competition Commission to consider competitive effects in digital markets in South Africa.

The case also suggests that the Competition Commission considers the existing rules regarding abuse of dominance as being adequate to address competition concerns in the market.

For more background information click here

To access the Competition Commission media release, click here


By Joshua Eveleigh

On 08 February 2022, the Competition Commission (“Commission”) released a press statement indicating that it had referred a matter to the Competition Tribunal (“Tribunal”) for the prosecution of Roche Holding AG (“Roche AG”), and its subsidiaries, Roche Bassel and Roche South Africa.

The nature of the Commission’s referral is premised on allegations that Roche AG and its subsidiaries had imposed excessive prices for Trastuzumab, a breast cancer treatment drug, in contravention of section 8(1)(a) of the Competition Act 89 of 1998 (“Competition Act”). As a result of the alleged conduct, the Commission has estimated that an excess of 10 000 breast cancer patients were unable to afford Trastuzumab between the period of 2011 and 2019.

In its press statement, the Commission placed particular emphasis on the fact that the alleged conduct bore the greatest impact on poor women who “…cannot access essential treatment because they cannot afford to pay for it. This is so even for the minority of women who belong to medical schemes.”

Notably, the recent Constitutional Court decision in Competition Commission v Mediclinic (“Mediclinic”) has had a seemingly profound impact on the Commission’s approach towards the present matter. In Mediclinic, the Constitutional Court emphasised the importance of the Constitution when interpreting and adjudicating competition law – specifically in regard to section 27, the right to have access to health care services. In its judgment, the Constitutional Court referred to both the Tribunal and the Competition Appeal Court (“CAC”) as state institutions that have the obligation to facilitate the Bill of Rights and to promote the right of access to health services. As a result of the Mediclinic judgment, the Commission has stated that the alleged conduct results in the prevention of access to health services, in contravention of section 27(1)(a) of the Constitution.

Due to the egregious nature of the alleged conduct, the Commission states that it is seeking that the maximum penalty be imposed against Rosche AG and its subsidiaries. In this regard, section 59(2) of the Competition Act provides that the maximum administrative penalty that may be imposed “may not exceed 10 per cent of the firm’s annual turnover in the Republic and its exports from the Republic during the firm’s preceding financial year.”

The Commission’s referral to the Tribunal and the grounds on which it relies, emphasises the overarching significance of the Mediclinic judgment in that an alleged conduct’s impact on the Bill of Rights, and public policy considerations as a result, is now preeminent consideration to be had respect of all aspects of competition law.

Primerio International partner, Michael-James Currie says the South African Competition Commission has been one of the most active agencies globally insofar as prosecuting excessive pricing cases is concerned, but and have had limited success to date. Subsequent to the amendments to the Competition Act in 2018, there has not been a case that has been fully litigated before the adjudicative bodies.

It will be interesting to see how this case progresses and the extent to which non-traditional competition factors are ultimately taken into account in interpreting the scope and application of the excessive pricing provisions contained in the Competition Act.

Nigeria: The Federal Competition and Consumer Protection Commission Talks to Primerio in Relation to Competition Law Enforcement Trends and Policy

*Compiled by Jemma Muller and Tyla Lee Coertzen


On 25 November 2021, Primerio International hosted an online “fireside chat” with representatives from the newly established Nigerian Federal Competition and Consumer Protection Commission (the “FCCPC”). The discussion, led by Michael-James Currie (Director at Primerio International), shed light on the FCCPC’s practices and focus points which were highlighted by Eme David-Ojugo (Chief Legal Officer at the FCCPC) and Yemisi Oluyode (FCCPC merger’s analyst).

[If you would like to access the full discussion, click here]

The importance of the newly established FCCPC in Nigeria is undisputed. Nigeria’s GDP is the largest economy on the African continent. As such, good competition law policy is of significant importance not only locally but across the continent more generally. As the African Continental Free Trade Agreement and competition policy in Africa is being negotiated, it is critical that there are strong voices from a variety of national territories and agencies, particularly from those economies which are more developed. This will ensure balanced policy and effective competition enforcement which prioritises free trade.

This Primerio fireside discussion with the FCCPC provided great insight into the current state of play with reference to policy and enforcement trends in Nigeria.

The Status of the Agencies

The FCCPC and the Competition and Consumer Protection Tribunal (the “CCPT”) were established by the Federal Competition and Consumer Protection Act, 2018 (the “FCCPA”) in March 2021 and are the  competition and consumer protection authorities in Nigeria. The authorities were established in order to promote fair, efficient and competitive markets in the Nigerian economy.

The FCCPA is, in many respects, similar to the South African Competition Act,1998 (as amended) (the “SACA”). Furthermore, Ojugo noted that the FCCPC is fortunate to have experience from across the world to utilize and that international antitrust precedent serves as a guide to the FCCPC.

Currently, the FCCPC is active in both merger control and in the enforcement of restrictive practices and has played a proactive role in pursuing its objectives. Ojugo described the FCCPC as having an “open door policy” whereby it encourages parties to engage directly with the FCCPC to assist the FCCPC in developing and improving its practices accordingly.

In 2021, The FCCPC published various Draft Regulations and Guidelines which it is in the process of finalising. Among these are the:

Restrictive Practices Enforcement – the FCCPC’s use of Dawn Raids

During the “fireside chat”, the FCCPC emphasized the use of dawn raids in its investigative processes in accordance with section 27 of the FCCPA. Dawn raids are generally unannounced and provide the authority with various powers to inspect, search and make seizures. In this regard, the FCCPC has received specialist training from the Federal Trade Commission (the “FTC”). The FCCPC has made use of dawn raids, particularly in the freight forwarding industry.

Prior to conducting dawn raids, the FCCPC is required to obtain a warrant from the Judge of the Nigerian Federal Court of Appeal. Under section 29 of the FCCPA, such a warrant permits the FCCPC to:

  • enter and search the place or premises specified on one occasion within 30 days of issue at a reasonable time;
  • use reasonable assistance to do so;
  • use as much force as is necessary to gain entry or breaking open any article or thing;
  • search and remove documents or anything that may be considered relevant to the investigation;
  • make copies of documents that may be considered relevant to the investigation; and
  • to require any person to reproduce or assist in providing relevant information.

The FCCPC is only permitted to conduct a search without a warrant if it has reason to believe that an entity has contravened the FCCPA or any related Regulations. In this instance, a sworn affidavit from the Executive Vice Chairman will be required.

During the “fireside chat”, Currie explored the FCCPC’s due process and procedural fairness standards that would ordinarily be followed by the FCCPC during such investigations. In response, Ojugo mentioned how the FCCPC will either institute investigations on its own initiative or following receipts of third party complaints. With regards to the latter, Ojugo noted that the FCCPC will usually carry out surveillance in order to verify the intel they receive. Ojugo explained that the FCCPC makes use of these types of procedures, as opposed to requesting information or documents, as the FCCPC is well aware that market participants will not generally be willing to provide relevant materials that would assist the FCCPC in its investigations.

Ojugo noted that while the FCCPC is given wide investigative powers, it must obtain authorisation by a Judge of the Federal High Court, and moreover that industries and firms can be assured that the FCCPC will not come in as a “bull in a China shop”. Rather, the FCCPC is intent on developing its capacity and understanding relevant markets before taking drastic interventionist measures. The FCCPC aims to maintain order, inform firms of their rights (particularly to legal representation) and aims to maintain coordination and cooperation in executing a search warrant. Furthermore, while the FCCPC is entitled to search personal items, it will only utilise information that is relevant to its investigations. In this regard, Ojugo pointed out that it is a criminal offence to obstruct the FCCPC’s investigation and the FCCPC may choose to prosecute in this instance. Moreover, refusal to cooperate with the FCCPC will serve as an aggravating factor when the FCCPC considers and calculates any resultant administrative penalties.

Overall, the approach the FCCPC has adopted in relation to restrictive practices enforcement encapsulates sophisticated investigative tools and is commendable. One potential risk foreseen in this regard is that the FCCPC retains possession of all information as opposed to a third party.

Leniency Policy, Penalty Guidelines, Criminal Sanctions

An important discussion point during the fireside chat related to the FCCPC’s approach in relation to leniency, penalties and criminal sanctions.

  • Leniency Policy

According to regulation 26 of the FCCPC Restrictive Agreements and Trade Practices Regulations (the “RATPR”), any party which is involved in a restrictive agreement or trade practice which is in contravention of the FCCPA may apply for immunity from sanctions or for reduced sanctions under the FCCPC’s Leniency Rules. While the RATPR refer to Leniency Rules, it is to be noted that these are not yet available. It is expected that the FCCPC will introduce a formal set of rules with regards to leniency in due course. Currently, the FCCPA does cater for leniency albeit on an informal basis. In this regard, the FCCPC has the discretion to grant immunity and does so to a party who is the first to submit evidence that will assist the FCCPC in its investigation. Moreover, cooperation with the FCCPC may result in it deciding to lessen the administrative penalty which is ultimately levied against the infringing but disclosing party. Furthermore, the FCCPC requires an infringing party to make a full disclosure and admit their liability by way of a written undertaking. However, Ojugo notes that even if a party enters into cooperation with the FCCPC, it does not necessarily mean that such a party is free from prosecution. Ojugo suggested that the FCCPC would require an admission of guilt and full disclosure from alleged offenders in order for the FCCPC to consider providing such an offender with leniency. However, the FCCPC retains discretion in deciding whether leniency is provided. There is a foreseen risk in this regard. Parties who allegedly contravene the FCCPA would have to provide a full disclosure of their conduct if they wish to be granted immunity but immunity is not guaranteed and parties may still be liable for criminal prosecution.

  • Penalty Guidelines

With regards to penalties, the FCCPA includes penalties for specific offences, namely price-fixing, conspiracy and bid-rigging. As mentioned above, the FCCPC recently published Regulations regarding the calculation of administrative penalties. Oluyode confirmed that the formula for calculating administrative penalties is complicated and cannot be done by parties alone. When deciding on a penalty, the FCCPC will utilise mitigating and aggravating factors in order to determine a party’s liability, and ultimately retains the discretion when deciding on the ultimate administrative penalty to be levied. As such, it is imperative that parties cooperate fully with the FCCPC as this will likely work in their favour, depending on the nature of the offence. Oluyode also noted that whether a global firm or a local firm is fined will depend on the circumstances of each case and which firm has caused the violation. The FCCPC will likely fine a firm on its worldwide turnover in an instance where it is the global firm who engages in or causes contraventions of the FCCPA. Local turnover is to be used when the local firm engages in or causes a contravention.

  • Criminal Sanctions

The FPPCA does make provision for criminal offences for competition related violations. In this regard, the FCCPC will exercise its discretion in deciding whether to prosecute criminal offences per section 113(2) of the FFCPA wherein the FCCPC is given powers to prosecute or to refer violations of criminal offences under the FCCPA to the Attorney-General of the Federation and the Minister for Justice. It is, however, the Nigerian courts who are tasked with convicting the crime.

Merger Control

The FCCPC is responsible for analysing merger transactions to prevent any negative impacts on competition arising as a result thereof. It has implemented a suspensory merger regime. Currently, the FCCPC has not rejected any mergers but has approved various mergers subject to structural and behavioural conditions. Currie commended the FCCPC on the implementation of its online merger notification portal which it implemented as a result of the Covid-19 pandemic. It allows parties to notify their mergers and take part in pre-consultation notifications with the FCCPC in an efficient and sophisticated manner. Oluyode noted that since its implementation, the running of the portal has been smooth and merger notifications have been received through the portal.

In the past year, the FCCPC has made significant development in merger control by publishing the various Regulations and Guidelines, which are accessible here on the FCCPC website. The FCCPC has also catered for a Negative Clearance procedure allows merger parties to ascertain clarity on whether their transaction will meet the definition of a merger and whether it must be notified to the FCCPC. The FCCPC recognises that consumer protection requires a joint responsibility by different regulators and agencies. It intended to provide for regulatory overlap in order to ensure complete coverage and protection of consumers. As such, while the FCCPC bears the responsibility of overall oversight over consumer protection, it intends to develop strategic alliances and encourages collaboration with different sector regulators.

 Section 92 of the FCCPA provides that a merger occurs when “one or more undertakings directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another undertaking” and may occur through the purchase or lease of shares; an interest in assets of an undertaking; the amalgamation or other combination with the undertaking; or a joint venture. Notifiable mergers must meet the above mentioned definition of a merger as well as meet the relevant merger thresholds set by the FCCPC. Mergers will be notifiable either where the parties to the merger in Nigeria have an annual turnover of above NGN 1 billion in the year preceding the merger; or where the annual turnover of the Nigerian target firm was more than NGN 500 million in the year preceding the merger. Mergers which do not meet the above threshold are classified as small mergers and need not notify their transaction, although section 95(3) of the FCCPC provides that within six months of the implementation of the merger, the FCCPC may require notification if it is of the opinion that the merger may substantially prevent or lessen competition in the market.

Mergers that meet the thresholds must obtain the FCCPC’s permission prior to implementation of the merger. As mentioned above, small mergers may be implemented without prior permission unless otherwise stipulated by the FCCPC. Oluyode clarified that while previously there was some confusion regarding the filing fees of foreign-to-foreign mergers, the FCCPC requires only the Nigerian local turnover to be used to calculate a filing fee.

In this regard, foreign-to-foreign merger approval is required by the FCCPC where a transaction taking place outside of Nigeria will have the effect of altering the control of a business, any part of a business or any asset of a business existing in Nigeria.

Of increasing importance in African antitrust law is the consideration of public interest factors in merger notifications. While the FCCPC representatives noted that the conditions the FCCPC has already imposed have related mainly to competition-based concerns, as opposed to public interest concerns, this does not mean that the FCCPC does not regard public interest concerns as important. The FCCPA prescribes that the FCCPC will consider whether a transaction can be justified on substantial public interest grounds. In this regard, the FCCPC will consider the factors in section 94(4) of the FCCPA, namely: the effect on a particular industrial sector or region; employment; the ability of national industries to compete in international markets; as well as the ability of small and medium scale enterprises to become competitive. Oluyode confirmed that the Minister of Trade, Industry and Investment may, at any point in time during a merger analysis, make his own representations concerning substantial and merger-specific public interest concerns which will be considered by the FCCPC.

Currently, the FCCPC has not published any of its decisions, however, it intends to begin publishing  its decisions on its website in the course of 2022 for public access.

What to expect going forward:

The FCCPC is set out for success, particularly having regard to the wide range of precedent available to it. As previously mentioned, the FCCPA was modeled off of South African competition legislation and the FCCPC intends to use the precedent of well-established jurisdictions such as those in Europe, the US and South Africa. Currently, the FCCPC is working on finalising its draft regulations and it is important that this is done timeously for the purposes of attaining clarity.

With regards to the extent to which parties who want to attain immunity from the FCCPC must admit their liability,  Currie noted that in many jurisdictions there is question on whether an admission of guilt is required or whether parties should be permitted to pay a penalty without a formal admission of guilt in their settlement. Often, the latter is a preferred option as parties usually prefer to pay a penalty to avoid the costs of litigation and civil follow-on damages. In response, Ojugo noted that as it stands, the FCCPC currently insists that parties take absolute responsibility for their actions. As a result, admission is an absolute requirement if a violating party wishes to benefit from the FCCPC’s leniency program. It remains to be seen whether an admission of guilt will continue to remain an absolute requirement. This will likely be addressed in the FCCPC’s Leniency Rules once they are published.

[Michael-James Currie is a competition lawyer and Director at Primerio. He serves as the Global Law Expert for Competition Law in Nigeria and is considered a leading competition lawyer across Africa including Best Lawyers for Competition Law in South Africa. He can be contacted at]

UPCOMING – Franklins & Primerio Hosted African Antitrust Event

If you haven’t registered yet, there are a few more hours to go before the Primerio and Franklin société d’avocats (Law Firm) first, of a series, webinar on Regulatory and Investment Risks in Africa kicks off at 3pm CET/SAST: 9am ET on 13 October 2021.

This session will explore antitrust developments in Southern and Western Africa and will be held in English and in French.

See link below to register (for free).

Speakers include: Andreas Stargard John Oxenham Joël Rault Lionel Lesur and Jérôme Michel

Click HERE to register

Mozambican Competition Authority Issues Ministerial Decree to Amend Merger Filing Fees

By Nicola Taljaard

On the 16th of August 2021, the Competition Authority of Mozambique (“CRA”) made certain vital amendments to its merger filing fees as per Decree no. 77/2021 (“Decree”). The amendments come at a crucial time considering the recent operationalisation of the CRA in Mozambique and long period of time for which the filing fees remained exorbitantly high. Until recently, the fees were inordinately high compared to both the neighbouring countries of Mozambique, as well as those on the broader global spectrum. The amendments consequently hold potential for improvement of the steadily strengthening African mergers and acquisitions market, and it is expected that similar developments will continue to follow.

It is provided in the Decree that the applicable filing fees are now 0.11% of the turnover in the year before filing with a maximum filing fee value of 2.25 million Meticais (approx. R530 000 as the exchange rate stands on 25 August 2021). Before this amendment was passed, Ministerial Decree no. 79/2015 set the applicable filing fee as an exceptionally high 5% of the turnover in the year before filing. This position was highly controversial, and potentially dissuaded potential investors.

An issue which remains unresolved following the publication of the Decree is that of the relevant companies’ turnover. Although the legislative procedure intended to clarify exactly which companies’ turnover should be used to determine the notification fee, it has failed to do so. However, upon interpreting Article 12 of the Competition Law Regulation systematically, it may be concluded that the turnover applicable to the transaction is that realised in Mozambique in the preceding financial year by all of the companies who are party to the deal. Such an interpretation is also consistent with common practice.

As of the 23rd of August, the Decree officially entered into force, an consequently should be applied by the CRA to cases both pending and upcoming, insofar as the filing fee has not yet been paid. This rationale is based on Resolution no. 1/2021 which stipulates that notification is only fully effective once payment of the filing fee has occurred. Thus, various notifications which have been submitted to the CRA, but not yet finalised with the relevant payment due to concerns regarding the high notification fees, are predicted to be paid for and processed in accordance with the modified rates soon.