Namibia: High Court declares Competition Commission’s search and seizure unlawful

On 9 November 2018, the High Court in Namibia declared a dawn raid conducted by the Namibian Competition Commission (NaCC) in September 2016 to be unlawful. The NaCC raided the premises of PUMA Energy on the basis of alleged abuse of dominance conduct in relation to the sale of aviation fuel at two airports in Namibia.

namibiaPUMA Energy challenged the validity of the search warrant and successfully argued that there was no basis for granting the search warrant. Consequently, the NaCC is obliged to return all documents seized during the raid to PUMA Energies.

In June 2018, the South African Competition Commission also lost a High Court challenge where the validity of a search warrant was at issue. The Pietermaritzburg High Court set aside the search warrant on the basis that the SACC failed to demonstrate that there was a bona fide “reasonable belief” that a prohibited act had been engaged in by the respondents in that case.

Competition lawyer, Michael-James Currie says that the use of search and seizure operations as an enforcement tool is being increasingly used across a number of African jurisdictions. Dawn raids have recently been conducted in Egypt, Kenya and Zambia in addition to Namibia and South Africa.

Currie says while dawn raids have been used effectively by well-established antitrust agencies, search and seizure operations are particularly burdensome on the targets and should only be used in those instances were no other less intrusive investigative tools are available. If competition authorities’ powers are not kept in check there is a material risk that search and seizure powers may be used as “fishing expeditions”.

Primerio director, John Oxenham, points out that the evidentiary threshold required in order to obtain a search warrant is relatively low. It is, therefore, concerning if enforcement agencies subject respondent parties to such an intrusive and resource intensive investigative tool without satisfying the requirements for obtaining a search warrant.

Despite these recent challenges to search warrants, Andreas Stargard, also a partner at Primerio, corroborates Oxenham and Currie’s view that the South African and Namibian competition agencies will continue utilising dawn raids as an investigative tool and in light of the increasingly robust enforcement activities, particularly by the younger competition agencies, companies should ensure that they are well prepared to handle a dawn raid should they be subjected to such an investigation.

 

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Breaking: South African Competition Amendment Bill passed by Parliament

AAT has closely monitored the progress of the Competition Amendment Bill and provided commentary to the Bill from leading local and international competition practitioners.

This is to update our readers that the Amendment Bill was passed in the National Assembly on 23 October 2018. The Bill still requires the National Council of Provinces to approve the Bill, following that the President’s consent – both of these procedural steps are likely to be mere formalities in light of the National Assembly’s decision to approve the Bill.

AAT expects that the Bill will be brought into effect imminently and likely without any material grace period for parties to assure compliance with its onerous provisions.

The Bill passed by the National Assembly has been amend mended from the draft Bill which was placed before Parliament’s Portfolio Committee.  The key contentious provisions of the Bill, however, remain largely unchanged.

To access a copy of the Bill passed by Parliament, click here.

Panel highlights SA Competition Amendment Bill’s pitfalls

As AAT has reported on extensively, the South African Competition Amendment Bill, currently pending in Parliament, is likely to be adopted in short order in its current draft form.

It carries with it significant, and in our view, adverse, effects that will burden companies trying to conduct business or invest in South Africa. These burdens will be particularly onerous on foreign entities wishing to enter the market by acquisitions, as well as any firm having a market share approaching the presumptive threshold of dominance, namely 35%

On Wednesday, 17 October 2018, the law firms of Primerio and Norton Incorporated held an in-depth seminar and round-table discussion on the ramifications of the Competition Amendment Bill. The setting was an intimate “fireside chat“ with business and in-house legal representatives from leading companies, active across a variety of sectors in the South African economy.

Moderated and given an international pan-African perspective by Primerio partner Andreas Stargard, the panel included colleagues John Oxenham and Michael-James Currie, who delved into the details of the proposed amendments to the existing Competition Act, covered extensively by AAT here.

As of today, 18 October 2018, the Bill appears set to be promulgated.  The SA Parliament’s committee on economic development has rubber-stamped the proposed amendments after a prior committee walk-out staged by the opposition Democratic Alliance (DA), in opposition to the Bill. DA MP and economic development spokesperson Michael Cardo states:

The ANC rammed the Competition Amendment Bill through the committee on economic development, and adopted a report agreeing to various amendments. To make sure they had the numbers for a quorum, the ANC bussed in two never-seen-before members to act as pliant yes men and women. Questions from the DA to the minister… This bill is going to have far-reaching consequences for the economy. It gives both the minister and the competition authorities a great deal of power to try and reshape the economy. It is unfortunate that the ANC, and the committee chair in particular, have suspended their critical faculties to force through this controversial bill and behaved like puppets on a string pulled by the minister of economic development.”

The Amendment Bill introduces significant powers for ministerial intervention and bestows greater powers on the Competition Commission, the investigatory body of the competition authorities in South Africa.

The panel discussion provided invaluable insights into the driving forces behind the Bill and ultimately what this means for companies in South Africa as it certainly won’t be business as usual if the Amendment Bill is brought into effect – particularly not for dominant entities.

[If you attended the panel discussion and would like to provide feedback to the panelists or would generally like to get in touch with the panelists, please send an email to editor@africanantitrust.com and we will put you in touch with the relevant individuals]

 

Namibian Competition Commission Investigates Pharmacies for Cartel Conduct

The Namibian Competition Commission (NaCC) recently announced that it is investigating the pharmacy sector for allegedly fixing prices. The investigation is focused on the Pharmaceutical Society of Namibia (PSN) and over 200 of its members.

The allegations include, inter alia, that the PSN requires its members to impose a 50% mark-up on the dispensing of medicines and that the PSN disciplines members for deviating from the mark-up.

The investigation follows closely on the heels of an earlier announcement that the NaCC is investigating short term insurance companies for allegedly agreeing to cap maximum mark-up rates and maximum labour rates which panel beaters may charge for repairing vehicles.

The Namibian Competition Act prohibits agreements or concerted practices between competitors which have as their object or effect the prevention or lessening of competition in the market.

The recent activity by the NaCC is indicative of the NaCC’s intention to increase competition enforcement in the region and firms doing business in Namibia are increasingly required to self-assess their conduct to ensure compliance with domestic competition laws not only in Namibia but in most sub-Saharan countries.

ENFORCEMENT ALERT: SOUTH AFRICAN COMPETITION COMMISSION INVESTIGATE COLLUSIVE TENDERING CASE

The South African Competition Commission (SACC) recently referred a complaint investigation to the South African Competition (Tribunal) regarding a complaint lodged by South African power utility, Eskom in March 2016 vis-á-vis contracts for the supply and installation of scaffolding and thermal insulation for Eskom’s 15 coal-fired power station.

The companies involved are: Waco Africa‚ acting through its subsidiary SGB Cape‚ Tedoc Industries‚ Mtsweni Corrosion Control and Superfecta Trading‚ and three joint ventures involving these companies.

According to the SACC, SGB submitted multiple tenders (in its individual capacity and through the various joint ventures) which were all signed by the same individual (and which contained identical “Safety‚ financial‚ technical and quality document”) which it used to manipulate tender prices.

Interestingly, the complaint was subsequently withdrawn by Eskom when Matshela Koko (Koko) took over as interim CEO. The SACC, however, exercised its rights in terms of Rule 16 of the Competition Act to continue the investigation despite the complaint being withdrawn.

Notably, Koko has been the subject of various investigations into allegations of corruption, which included allegations that Koko allegedly engaged in tender rigging in awarding tenders to a company in which some members of his family had interests, without following proper process.

Collusive tendering is a contravention under section 4(1)(b) of the Competition Act (89 of 1998) (which is a per se contravention) and can lead to an administrative penalty of up to 10% of turnover and more recently, criminal prosecution. Collusive tendering also falls under the definition of corruption under the Prevention and Combating of Corrupt Activities Act (12 of 2004).

Firms are therefore urged to ensure that their employees are aware of the provisions of the Competition Act, especially when submitting ‘joint tenders’ (i.e where a firm provides certain products or services to a competitor for purposes of a tender bid and also submit an individual tender bid) or tendering through a joint venture. Furthermore, should there be any uncertainty as to whether or not a current practice falls foul of the Competition Act, firms should seek legal advice.

Nigeria Competition Law – One More Signature Required

After numerous calls from various stakeholders both locally and internationally, Nigeria seems to be on the verge of finally adopting its long-awaited Federal Competition and Consumer Protection Bill (the Bill) which will introduce competition law in the country.

Moves to enact competition law had started in 2000 and several amendments to the initial proposal had been unsuccessfully presented to the Senate. The subsequent bills had either stalled at first reading stage, or disappeared from the legislative process. However, the Bill received its initial approval earlier in June this year and after being passed into law by the Senate, the Bill now faces the final hurdle of being assented by the President, by which it will become law. This is expected to be a mere formality.

AAT have closely monitored the development of the Bill from its infancy stages and although it has been in the making for some time, the introduction of competition law in Nigeria will be welcomed by most. For additional insights into the Bill, please see the following articles (here and here).

In summary, the Bill. once it comes into force, will replace the Consumer Protection Act and to create a new Federal Competition and Consumer Protection Commission and Tribunal to enforce the Federal Competition and Consumer Protection Act.

The Bill has largely followed the model of other African countries who have successfully implemented antitrust and consumer protection enforcement and seeks to address all areas of competition such as price fixing, market allocation, collusive tendering and abuse of dominance.  In addition hereto, the Bill would also seek to ensure and enhance product safety and consumer protection within Nigeria.

Notably, in line with the approach recently adopted in South Africa, the Bill includes criminal sanctions for individuals engaging in anticompetitive practices.  In this regard, see here for a detailed assessment from AAT guest author Osayomwanbor Bob Enofe.

[The AAT editors thank Charl van Merwe for his assistance with this AAT update]

ENFORCEMENT ALERT: MINIMUM RESALE PRICE MAINTENANCE – SOUTH AFRICA

The AAT Editors thank Charl van der Merwe for his contribution.

The Competition Tribunal of South Africa (Tribunal) on 26 October 2017 confirmed a consent order filed by the South African Competition Commission (SACC) in terms of which SBS Household Appliances t/a SMEG (Pty) Ltd (SMEG) admitted to contravening Section 5(2) of the South African Competition Act 89 of 1998 (Competition Act).

Section 5(2) of the Competition Act contained a per se prohibition of Minimum Resale Price Maintenance (MRPM), which means that firms operating in South Africa may not set minimum prices at which its downstream customers/retailers are obliged to sell its products.

According to the Tribunal’s order, one of SMEG’s customers lodged a complaint with the SACC in which it was alleged that SMEG refused to supply them with product because they failed to resell a certain product at a price above the minimum recommend price set by SMEG.

The SACC conceded that the price list which SMEG circulated to its retailers had the words “recommended price” appearing next to it – as required under South African competition law. However, the SACC found that in practice when the complainants continued to sell the specific product below the ‘recommended price’ (after SMEG demanding adherence to the ‘recommended price’), SMEG terminated supply of all its product to the complainants. This was done after SMEG received a complaint from one of its other retailers that the complainants had sold the specific product below the ‘recommended price’.

As a mitigating factor, the SACC found this to be an isolated incident, which was not implemented throughout SMEG’s operations. In this regard, the SACC’s investigation into the matter revealed that most of the retailers of SMEG’s products do not necessarily sell at the recommended price and that it was in fact SMEG’s practice to “recommend retail prices, but those were not enforced.”

In light of this mitigating factor, SMEG was only fined R 100 000 (roughly $7000) and agreed to implement a number of behavioural remedies – which includes a commitment to continue to supply the complainants with the respective products.

With regards to the calculation of the penalty, despite some deliberation as to the relevant turnover to be utilised for purposes of calculating the administrative penalty, the Tribunal ultimately fined SMEG based the affected turnover, as “this is a case specific issue” (Retailer specific).

Most notably, the Tribunal elected to move away from its standard procedures in relation to consent orders (not to give any reasons or explanation for its decision) in order to specifically raise awareness on the issue of MRPM in South Africa and deal with the “nature and severity of minimum resale price maintenance” and to “enhance the awareness of the fact that minimum resale price maintenance is prohibited per se in South Africa”.

The SACC in its consent agreement clearly stated that although other jurisdictions such as the US are now treating MRPM as a rule of reason rather than a per se contravention, it remains a per se contravention in terms of the Competition Act and specifically noted that there is no intention to change the Competition Act in relation to the per se nature of MRPM.

The Tribunal also used the opportunity to caution firms against adopting American (or other) antitrust practices in South Africa. In this regard the Tribunal held that “[T]he notion that other jurisdictions may be revisiting their stance on minimum resale price maintenance cannot be construed as a mitigating factor in the matter at hand.”

Finally, the Tribunal reaffirmed its stance on the serious nature of MRPM as a competition offence with reference to the its previous decision on the issue in the case of Competition Commission vs Federal Mogul Aftermarket Southern Africa (Pty) Ltd and Other (08/CR/Feb01) and used the case at hand as an illustration of the detrimental effects of minimum resale price maintenance on customers.

South Africa: Abuse of Dominance Investigations– Out with the Old, In with the New

The South African Competition Commission (SACC) recently announced that it would withdraw its complaint of abuse of dominance levelled against two of the four pharmaceutical companies who had allegedly engaged in excessive pricing in relation to certain cancer medications in South Africa.

The companies who were implicated in the SACC’s investigation were Roche and Genentech, Pfizer, Equity and Aspen.

The SACC indicated that it had withdrawn its complaint in respect of Aspen and Equity as the relevant products only generated a small portion of revenue in South Africa or in the case of Equity, the relevant product is not registered in South Africa and was only imported once into South Africa from Germany (which was the basis for the high price charged in South Africa). The complaint against Roche and Pfizer will, according to the SACC, continue.

In the same week, the SACC announced that it has launched an abuse of dominance investigation against Vodacom for engaging in exclusionary conduct. This investigation by the SACC is somewhat puzzling as it appears from the SACC’s media release that the reason why Vodacom is being investigated is on the basis that Vodacom had won a tender issued by the National Treasury to become the sole provider of mobile telecommunication services to the government.

The SACC alleges that previously, government departments could purchase mobile telecommunication services from any mobile network operator, but following the award of the tender to Vodacom, other departments, including state owned entities and municipalities, will be incentivised to adopt new contracts with Vodacom. In other words, Vodacom would either be precluding government departments or inducing them not to deal with Vodacom’s competitors in contravention of Section 8 of the Competition Act.

In order to sustain an exclusionary conduct complaint, it must be demonstrated that the alleged conduct was in fact anti-competitive and cannot be outweighed by any pro-competitive or other efficiency justifications.

Importantly, the SACC has not indicated that the actual tender process in any way distorted a competitive bid being submitted by Vodacom.

Accordingly, by being awarded the tender, particularly a public tender issued by the National Treasury, one would have anticipated that this would be indicative that Vodacom’s bid was the most competitive offering – why else sign the agreement in the first place. It could hardly be the case that the National Treasury was ‘forced’ into accepting Vodacom’s terms and if there was an irregularity with the tender process, then why lodge a complaint with the Competition Authorities. This would be a public procurement issue.

Accordingly, the message which seems to be imparted from the SACC’s decision to investigate Vodacom is that dominant firms should be particularly cautious about tendering for a particular bid – they may just win.

Although the investigation has only recently been announced by the SACC, Vodacom’s share price dropped 8% following news of the investigation. Regardless, of whether the complaint levelled against Vodacom has any merit, Vodacom is already paying a reputational price which in today’s day and age, can be significantly costly.

The African WRAP – SEPTEMBER 2017 Edition

Since our June 2017 Edition of the African WRAP, we highlight below the key competition law related topics, cases, regulatory developments and political sentiment across the continent which has taken place across the continent in the past three months. Developments in the following jurisdictions are particularly noteworthy: Botswana, Kenya, Mauritius, Namibia, Tanzania and South Africa.

[AAT is indebted to the continuous support of its regular contributors and the assistance of Primerio’s directors in sharing their insights and expertise on various African antitrust matters. To contact a Primerio representative, please visit Primerio’s website]


Botswana: Proposed Legislative Amendments

Introduction of Criminal Liability

The amendments to the Competition Act will also introduce criminal liability for officers or directors of a company who causes the firm to engage in cartel conduct. The maximum sanctions include a fine capped at P100 000 (approx. US$10 000) and/or a maximum five year prison sentence.

Fines for Prior Implementation

Once finalised, the legislative amendments will also introduce a maximum administrative penalty of up to 10% of the merging parties’ turnover for implementing a merger in contravention of the Act. This would include ‘gun-jumping’ or non-compliance with any conditions imposed on the merger approval.

Restructuring of the Authorities

Proposed legislative amendments to the Botswana Competition Act will likely result in the Competition Commission’s responsibilities being broadened to include the enforcement of consumer protection laws in addition to antitrust conduct.

Furthermore, there is a significant restructuring of the competition agencies on the cards in an effort to ensure that the Competition Authority – which will become the Competition and Consumer Authority (CCA) – is independently governed from the Competition Commission. Currently, the Competition Commission governs the CA but the CA is also the adjudicative body in cases referred to the Commission by the CA.

The proposed amendments, therefore, seek to introduce a Consumer and Competition Tribunal to fulfil the adjudicative functions while an independent Consumer and Competition Board will take over the governance responsibilities of the ‘to be formed’ CCA.

South Africa

Information Exchange Guidelines           

The Competition Commission has published draft Guidelines on Information Exchanges (Guidelines). The Guidelines provide some indication as to the nature, scope and frequency of information exchanges which the Commission generally views as problematic. The principles set out in the Guidelines are largely based, however, on case precedent and international best practice.

The fact that the Commission has sought to publish formal guidelines for information exchanges affirms the importance of ensuring that competitors who attend industry association meetings or similar forums must be acutely aware of the limitations to information exchanges to ensure that they do not fall foul of the per se cartel conduct prohibitions of the Competition Act.

Market Inquiry into Data Costs

The Competition Commission has formally initiated a market inquiry into the data services sector. This inquiry will run parallel with the Independent Communications Authority of South Africa’s market inquiry into the telecommunications sector more broadly.

Although the terms of reference are relatively broad, the Competition Commission’s inquiry will cover all parties in the value chain in respect of any form of data services (both fixed line and mobile). In particular, the objectives of the inquiry include, inter alia, an assessment of the competition at each of the supply chain levels, with respect to:

  • The strategic behaviour of by large fixed and mobile incumbents;
  • Current arrangements for sharing of network infrastructure; and
  • Access to infrastructure.

There are also a number of additional objectives such as benchmarking the standard and pricing of data services in South Africa against other countries and assessing the adequacy of the regulatory environment in South Africa.

Mauritius

Amnesty re Resale Price Maintenance

The Competition Commission of Mauritius (CCM) has, for a limited period of four months only, granted amnesty to firms who have engaged in Resale Price Maintenance. The amnesty expires on 7 October 2017. Parties who take advantage of the amnesty will receive immunity from the imposition of a 10% administrative penalty for engaging in RPM in contravention of the Mauritius Competition Act.

The amnesty policy followed shortly after the CCM concluded its first successful prosecution in relation to Resale Price Maintenance (RPM), which is precluded in terms of Section 43 of the Mauritius Competition Act 25 of 2007 (Competition Act).

The CCM held that Panagora Marketing Company Ltd (Panagora) engaged in prohibited vertical practices by imposing a minimum resale price on its downstream dealers and consequently fined Panagora Rs 29 932 132.00 (US$ 849,138.51) on a ‘per contravention’ basis. In this regard, the CMM held that Panagora had engaged in three separate instances of RPM and accordingly the total penalty paid by Pangora was Rs 3 656 473.00, Rs 22 198 549.00 and 4 007 110.00 respectively for each contravention.

Please see AAT’s featured article here for further information on Resale Price Maintenance under Mauritian law

Tanzania

Merger and Acquisition Threshold Notification

The Fair Competition Commission has published revised merger thresholds for the determination of mandatorily notifiable thresholds. The amendments, which were brought into effect by the Fair Competition (Threshold for notification of Merger) (Amendment) Order published on 2 June 2017, increases the threshold for notification of a merger in Tanzania from TZS 800 000 000 (approx.. US$ 355 000) to TZS 3 500 000 000 (approx.. US$ 1 560 000) calculated on the combined ‘world-wide’ turnover or asset value of the merging parties.

Kenya

            Concurrent Jurisdiction in the Telecommunications Sector

In June 2017, Kenya’s High Court struck down legislative amendments which regulated the concurrent jurisdiction between the Kenya Communications Authority and the Competition Authority Kenya in respect of anti-competitive conduct in the telecommunications sector.

In terms of the Miscellaneous Amendments Act 2015, the Communications Authority was obliged to consult with the Competition Authority and the relevant government Minister in relation to any alleged anti-competitive conduct within the telecommunications sector, prior to imposing a sanction on a market player for engaging in such anti-competitive conduct.

The High Court, however, ruled that the Communications Authority is independent and that in terms of the powers bestowed on the Communications Authority by way of the Kenya Communications Act, the Communications Authority may independently make determinations against market participants regarding antic-competitive conduct, particularly in relation to complex matters such as alleged abuse of dominance cases.

Establishment of a Competition Tribunal

The Kenyan Competition Tribunal has now been established and the chairperson and three members were sworn in early June. The Tribunal will become the adjudicative body in relation to decisions and/or taken by the Competition Authority of Kenya.

The Operational Rules of the Tribunal have not yet been published but are expected to be gazetted soon.

Introduction of a Corporate Leniency Policy

The Competition Authority of Kenya (CAK) has finalised its Leniency Policy Guidelines, which provide immunity to whistle-blowers from both criminal and administrative liability. The Guidelines specifically extend leniency to the firm’s directors and employees as well as the firm itself.

Only the “first through the door” may qualify for immunity in respect of criminal liability, but second or third responds would be eligible for a 50% and 30% reduction of the administrative penalty respectively, provided that provide the CAK with new material evidence.

It should be noted, however, that receiving immunity from criminal prosecution is subject to obtaining consent from the Director of Public Prosecution as well. As per the procedure set out in the Policy Guidelines, the Director pf Public Prosecutions will only be consulted once a leniency applicant has already disclosed its involvement in the cartel and provided the CAK with sufficient evidence to prosecute the other respondents.

It is not clear what powers the Director of Public Prosecutions would have, particular in relation to the evidence which has been provided by the leniency applicant, should either the CAK or the Director refuse to grant immunity from criminal prosecution.

Namibia

Medical aid schemes

In a landmark judgment, the Namibian Supreme Court overturned the High Court’s decision in favour of the Namibian Association of Medical Aid Funds (NAMAF) and Medical Aid Funds (the respondents) finding that the respondents did not fall within the definition of an “undertaking” for the purpose of the Namibian Competition.

Despite the substantial similarities between the Namibian and the South African Competition Act, Namibia’s highest court took a very different interpretative stance to its South African counter-part and held that because the respondents did not “operate for gain or reward” they could not be prosecuted for allegedly having  engaged in collusive behaviour in relation to their ‘tariff setting’ activities in terms of which the respondents collectively  determined and published recommended bench-marking tariffs for reimbursement to patients in respect of their medical costs.

 

 

South African Annual Competition Conference 2017: Law versus Policy – A “watch this space” moment

During the final week of August 2017, a number of prominent antitrust practitioners, economists, academics and politicians gathered in Johannesburg for the 11th Annual Competition Law, Economics & Policy Conference (Conference).

The Conference attracted a variety of presenters, both local and international, to grapple and stimulate debate around a number of highly topical issues including ‘big data’, the use of algorithms and the development and success of tech mammoths such as Google and Uber.

South African politicians also took to the stage, including both the Minister of Economic Development, Mr Ebrahim Patel, and the South African Deputy President, Mr Cyril Ramaphosa.

The key message imparted by these two prominent politicians is that more needs to be done to tackle “high concentrations” within the South African economy. A message which has become somewhat of a rhetoric from politicians of late.

Minister Patel again emphasised that legislative changes will soon be brought into force which will assist the competition authorities in de-concentrating the economy and prosecuting alleged abuse of dominance cases in South Africa. It not yet clear whether Minister Patel intends introducing the “complex monopoly” provisions (which have already been passed by the legislature in 2009 but have not yet been brought into force) overnight in a similar manner as the criminal liability provisions were brought into effect or whether there are additional legislative amendments on its way which will provide the Competition Agencies with greater powers to “break up dominant firms”.

The Deputy President reaffirmed Minister Patel’s sentiment and stated that “the way the economy was structured in the past is a problem, which must be rectified through policy” and further added that “competition policy in South Africa cannot be limited merely to the promotion of market efficiency. It must be an instrument to effect fundamental economic and social change” (Our emphasis). Mr Ramaphosa did not, however, proffer any substantive recommendations on how best this should be achieved.

Both Minister Patel as well as Deputy President Ramaphosa spoke with high regard of the efforts of US president Theodore Roosevelt in deconcentrating the US economy decades ago through the so called “no-fault divorce” in terms of which US antitrust regulators could break up dominant companies in a sector whose structure they deemed anticompetitive. The Commissioner of the South African Competition Commission, Tembinkosi Bonakele further told a forum at the Gordon Institute of Business Science (GIBS) that the proposed amendments currently before Cabinet, included granting the Commission the power to apply measures to address concentrations and not to merely make recommendations once evidence of market concentration had been found.

Whatever proposals are ultimately brought to the table to tackle high levels of concentrations would need to take into account the fact that most companies achieve their dominance through efficiencies, innovation and risk taking in the first place which in turn has a positive impact on the economy.

Arguably, effective utilisation of state resources, which is often hampered by corruption and poor administration are far more detrimental to the economy and welfare of South Africans as a whole. South Africa Airways (SAA) is a case at hand. Despite having been found to have engaged in abuse of dominance practices (which led to both the imposition of an administrative penalty and civil follow-on damages). SAA’s current lack of efficiency does not stem from its dominance in the market, but is rather a result of poor leadership and administrative capabilities.

Without any concrete proposals or draft legislative provisions on the table for public comment as of yet, a key issue remains whether the envisaged proposals currently being considered will materially address the socio-economic challenges which South Africa faces and whether the resources dedicated to this cause could be better utilised elsewhere.

Moving to private enforcement, a key issue discussed during the Conference is the importance of civil damages (and collective redress) and its role within the sphere of competition law in South Africa. In this regard, Oxenham, Currie and Van der Merwe’s paper titled “Follow On Damages for Anticompetitive Conduct – A Need for Legislative Intervention?” is particularly enlightening.

In their Paper, the authors explore not only the framework in which civil follow on damages claims in South Africa should be assessed, but also explore some of the key practical issues which plaintiffs, defendants and the Courts are likely to grapple with in future cases. In particular, the Paper highlights key challenges such as: joint and several liability; the apportionment of damages between defendants; prescription and the timing of instituting complaints; the availability of indirect purchaser complaints; and access to information which will invariably shape the strategy and efficiency of a plaintiff’s damages case.

Furthermore, with follow on damages claims and class action litigation a novel but very real feature of South African law, perhaps now is the time that the South African policy makers and legislature should give more thought to providing guidance on key aspects relating to follow on civil redress.

Alleviating the challenges which plaintiffs are likely to face in instituting a damages claim may go further in achieving the very goals which Minister Patel and Deputy President Ramaphosa seek to achieve. The difficulty for the legislature, however, will be in finding an appropriate balance between the various competing interests – such as ensuring that any reform in relation to follow on redress does not deter or prejudice the Competition Commission leniency policy nor deter respondents from seeking to conclude expeditious settlements with the Commission.

Finally, ensuring substantive and inclusive public debate on the proposed policy reforms may go a long way in ensuring that whatever legislative intervention is pursued, the authorities will not be hamstrung by challenges to the legality of the legislative provisions as has been the case with previous amendments to the Competition Act.