new regime, no antitrust regime, personnel, Swaziland

Has national antitrust enforcer abdicated to COMESA?

swaziland

Swaziland Competition Commission all but shuttering its doors

Since the creation of its competition-law authority in 2007, COMESA member state Swaziland has seen only 2 (two) enforcement matters, according to a report by the Observer.  Even by COMESA’s statistical standards, 2 matters in 7 years amounts to a record low.

Over in the virtual world, the SCC’s web site reflects the agency’s real-life inactivity: The last update appears to have been made in March 2012, a full two years ago; many, if not most, hyperlinks to “news” are broken or lead the viewer to blank pages; PDF document downloads often fail for no obvious reason.

As to the two discernible cases undertaken by the agency, the Observer article quotes Swaziland Competition Commission (SCC) Advocacy and Communications Officer Mancoba Mabuza as follows:

[T]he first enforcement matter the commission dealt with was The Gables (Pty) Ltd versus Pick n Pay Retailers (Pty) Ltd where the secretariat conducted an investigation into allegations made by The Gables against Pick n Pay.

[T]he second enforcement case involved Eagles Nest (Pty) Ltd and Usuthu Poultry (Pty) Ltd which was investigated by the secretariat and at the conclusion of the investigation; the report was shared with the parties to the matter as the finding was adverse to the parties.

“The matter was then taken to court where the commission successfully defended the case in the court of first instance and the parties then appealed the matter. In a judgement delivered on May 30, the parties’ appeal was dismissed and that the commission will be adjudicating on this matter soon,” he said.

 

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AAT, BRICS, COMESA, dominance, fees, new regime, South Africa, Sudan

Costly COMESA courthouse, ZA investigates Visa provider & holds ground on Sasol fine

south_africa

Lots AAT news this Monday, from Sudan/COMESA to South Africa

Visa facilitator backed by one branch of government & investigated by another

In substantive antitrust news, the South African Competition Commission is reported to be investigating alleged abuses of market dominance by VFS Global in the visa support services market to foreign embassies.

VFS is a worldwide outsourcing and technology services specialist for diplomatic missions and governments.

The firm has now drawn the potential ire of the Commission, as it is now apparently the only outlet for foreigners to apply for South African visas and work permits, as well as for South African citizens to obtain entry visas for multiple countries abroad.

The irony here that we at AAT perceive is that the monopoly position of VFS appears to be based on the new immigration regulations imposed by the ZA government itself (notably the Department of Home Affairs) earlier in 2014: According to a report, the company had recently opened the doors of its multiple offices across the country — “The Pretoria (Gauteng), Rustenburg (North West) and Kimberley (Northern Cape) centres were the first to open on Monday, 2 June. It is envisaged that the last office will be opened on 23 June.”

The investigation – to be confirmed by the Commission this week, as it potentially launches a full-on formal inquest – was purportedly initiated by a competitor complaint from company Visa Request, claiming damage to its competing business flowing from the governmentally-imposed dominant position of VFS’s (allegedly pricier) services…

Commission stays course on Sasol

In more ZA news, Competition Commissioner Tembinkosi Bonakele is staying the agency’s strong course on the excessive-pricing fine imposed on Sasol, which is said to be appealing its R543 fine that had been upheld by the country’s Competition Tribunal, and which Commissioner Bonakele thinks “should be bigger”…

In our prior AAT reporting on the Sasol abuse-of-dominance case we said:

The S.A. Competition Tribunal is hearing the excessive-pricing portion (which was not settled) of the Commission‘s claims against the refining & steel giant this month.  The relevant legal underpinning of the case is the provision against excessive pricing by a dominant firm.  Precedent has declared prices excessive that “bear no reasonable relation to the economic value of the good or service” at issue.  Pheeew.  Facts.  Economics.  Nice.  Looks like a coming battle of the experts to me…

By comparison, in the U.S., antitrust law of course does not forbid “excessive pricing.”  While setting and reaping apparently high prices may be indicative of monopoly power, such acts are not in themselves anti-competitive or illegal in the States.  In Verizon v. Trinko, the U.S. Supreme Court held famously that:

The mere possession of monopoly power, and the concomitant charging of monopoly prices, is not only not unlawful; it is an important element of the free-market system. The opportunity to charge monopoly prices—at least for a short period—is what attracts “business acumen” in the first place; it induces risk taking that produces innovation and economic growth.

Interestingly, there is a notable history of failures in the area of ‘excessive pricing’ complaints in South Africa, as well, despite the statutory legitimisation of the cause of action.  In the prior ArcelorMittal and Telkom cases, the Commission and/or Tribunal lost in the end, either at trial or on appeal to the Competition Appeal Court.  That Court had found, in the ArcelorMittal case, that the antitrust watchdogs could not use the ‘excessive pricing’ provision of the statute to combat perceived anti-competitiveness in the “market structure rather than price level.”

Today, Bonakele is quoted as follows:

“These are different times.  I can promise you this matter is not going to disappear. Sasol is out of touch if it believes it can win the matter on the basis of technical legal arguments. This issue has to be resolved either through competition law or through government policy.

The issue in this case is fundamental to the development of our economy. We are dealing with resources that should be available to promote that development. The government plays an important role in the country’s industrialisation, and I believe it will be very interested in the progress of this case.”

COMESA’s costly courthouse

While the COMESA organisation has had trouble in the virtual world this year, its real-world endavours appear to be prospering: Its shiny new courthouse, built to the tune of over $4 million (equivalent to only 8 merger filing fees), has opened its doors.  The country’s Minister of Justice, Mohamed Bushara Dosa, last week handed over to the COMESA Secretariat-general the Khartoum-based court premises.

The court will notably hear antitrust and merger cases that are appealed from the organisation’s Competition Commission.

 

https://i2.wp.com/news.sudanvisiondaily.com/media/images/29d17065-0634-951e.jpg

The glimmering COMESA court house in Sudan, built to the tune of $4.1 million

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collusion, Madagascar, Mauritius

Beer cartels: First fine sought in Mauritius leniency matter

mauritius

madagascar

Precedential leniency case yields initial fine

The Competition Commission of Mauritius (“the Commission”) has recommended fines of approximately €487,000 and €158,000 be imposed on Phoenix Beverages Ltd (PLB) and Stag Beverages, respectively, for their involvement in a cartel.

This is the country’s first cartel investigation to be made public, and the first time a party has used its leniency programme.

Phoenix and Stag have been accused by the Commission of colluding to divide the Mauritian and Madagascan beer markets between the two manufactures. The alleged agreement between the parties involved Stag leaving the Mauritian market, allowing Phoenix to dominate the country’s beer market.

Phoenix applied for leniency prior to the 24 May 2014 deadline and consequently received reduced fine.  Both companies assisted the Commission with its investigation.

The Executive Director of the CCM, Mrs. Kiran Meetarbhan, said:

“Many jurisdictions have developed programs that offer leniency because of the many benefits that flow from having them. In line with international best practices, the CCM has not lagged behind in developing a leniency program that has been reinforced so as to grant full amnesty to the first reporting firm in addition to offering judicial security to informants.

This investigation triggered our first leniency application since the CCM’s inception. This is also the first cartel investigation which I have launched in my capacity as Executive Director for which I have recommended financial penalties in addition to other measures to address competition concerns.

I wish to commend the main parties’ approach in this investigation which has revealed a true spirit of cooperation.  Leniency programs create powerful incentives to enterprises to race to self-report at an early stage. Evidence can thus be obtained more quickly, and at a lower direct cost, compared to other methods of investigation, leading to prompt and efficient resolution of cases. This case provides a perfect example of the manner in which a leniency application coupled with the active cooperation of the main parties have led to the successful completion of the investigation within a remarkable three months’ timeline.

The fine[] recommended on Phoenix Beverages Ltd takes into account its leniency application, absent which, the fines would have been higher. Phoenix Beverages Ltd took advantage of the amnesty provisions, which lapsed on 24th May 2014. We cannot stress enough the importance of the leniency programme with regards to collusive agreements.

Several factors help to free an economy from the malicious effects of a collusive agreement including a strong political support towards fighting cartels and a resilient commitment to equip the competition agency with the appropriate legislative framework and adequate financial resources. The Government has signified its intention to further empower the Competition Commission in order to better fight cartels. This was announced by the Prime Minister in his address to the Nation this year.”

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AAT, personnel, South Africa

Dual accolades for Nortons Inc.

Law firm of AAT editor John Oxenham has been awarded two prestigious recognitions

Finance Monthly – Law Awards 2014

Following a nomination and voting process, Nortons Inc. has won the award for “Antitrust & Competition Law Firm of the Year – South Africa” in this year’s Finance Monthly Law Awards. The awards are divided into firm and individual categories and have been chosen to reflect the range of practice areas and skills that lie at the heart of the successful law firm or legal department.

Lawyers World Global Awards 2014

Nortons Inc. also won the South African award in the Lawyers World Global Awards 2014, which recognises a select number of leading professional firms, organisations & advisers worldwide for their individual areas of specialisation within their respective geographical locations.

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BRICS, energy, market study, South Africa

Second market inquiry focuses on energy sector (LPG)

south_africa

“Highly regulated” liquefied petroleum gas at center of second sectoral Commission inquiry

According to the South African Competition Commission, the agency has issued “Terms of Reference for the market inquiry into the Liquefied Petroleum Gas sector”:

The Commission has today issued the Terms of Reference (ToR) for the LPG market inquiry. The ToR formally launches and outlines the scope of the inquiry.
The Commission is initiating the inquiry because it has reason to believe that there may be features of the sector that prevent, distort or restrict competition. The Commission hopes that the inquiry will assist in understanding the state of competition in the LPG sector.

It comes on the heels of the first market inquiry into private healthcare, on which AAT has reported extensively.

The full Terms of Reference are available online here.  The market inquiry is expected to begin this month and is expected to be completed by October 2015.

According to the Terms of Reference, the objectives of the market inquiry include:

  • Analyzing the current regulatory pricing framework with the aim of determining whether regulation could be improved in order to limit the exercise of substantial market power by market participants;
  • Examining whether the supply bottlenecks in the liquefied petroleum gas industry may serve to create circumstances or incentives that serve to distort, prevent or lessen competition;
  • Determining whether features currently prevalent in the market increase costs of switching to a prohibitive level when customers seek to switch between resellers of liquefied petroleum gas;
  • Assessing the extent of the barriers to entry and general competition dynamics at various levels of the supply chain within the industry; and
  • Making recommendations that may serve to improve the state of competition.

The Commission has identified the participants in the market inquiry process as including business enterprises within the liquefied petroleum gas chain, such as manufacturers, wholesalers, distributors and retailers, other related enterprises, end-users, government departments, public entities, regulatory authorities, industry associations and any other stakeholders that may be able to provide information relevant to the market inquiry.

BDLive reports that approximately “300,000 tons of LPG is manufactured in SA annually, generating turnover of about R1.5bn. Six refineries, Sapref, Sasol Synfuels, PetroSA Synfuels, Enref, Chevref and Natref produce and supply LPG.

Major resellers such as Afrox, Easigas, BPSA and Total Gas distribute it bulk or in a repackaged form. Afrox, Easigas and Sapref also imported at least 6,100 tons of LPG through facilities in Richards Bay, Port Elizabeth and Durban.”

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BRICS, consumer protection, dominance, Extra-judicial Factors, personnel, South Africa

How the bourgeoisie hijacks antitrust: Justice Minister’s dubitable remarks

south_africa

“Bourgeoisie” in the people’s interest?

South African justice ministry’s highest-ranking member calls for strengthened competition enforcement against “monopoly pricing” and creation of “black bourgeoisie”

In an apparently rambling discourse, covering a vast swathe of subject-matter, South Africa‘s Justice Minister Jeff Radebe has been quoted as calling not only for the dismantling of the “over-concentrated” economy “in the hands of a few large companies,” but also for the creation of a “black bourgeoisie,” purportedly to counter-act the remaining racial imbalance in the country’s economic structure, according to an article in the South African Times Live:

On promoting competition in the economy, Radebe said the Competition Act would be strengthened to prevent monopoly pricing of goods such as steel and heavy chemicals.

This would make local manufacturing more competitive, and support infrastructure investment.

“The competition authorities will be further developed to act against cartels and ensure public interests are adequately protected in mergers and acquisitions.”

… Radebe was heckled from opposition benches when he said the emphasis would be on “creating black industrialists in productive sectors of the economy, and developing a patriotic black bourgeoisie”.

He broke from his prepared speech and asked, to laughter: “Why should it only be white bourgeoisie?

Is a “bourgeoisie” reconcilable with populist politics (and competition law)?

One cannot help but wonder what the connection between the elimination of the so-called “white bourgeoisie” and the reduction of “over-concentration” in the economy may be, if any.

Moreover, AAT respectfully expresses its doubt whether creating a “bourgeoisie” — any bourgeoisie (wholly regardless of its race) — is in the general population’s interests, as the Minister seems to think (“It is a people’s plan which has been adopted by the majority of our people and stakeholders. We are therefore calling on all South Africans to rally behind the implementation of the plan, including labour, business and civil society”).  As another article on the topic points out,

In Marxist philosophy, the term bourgeoisie denotes the social class who owns the means of production and whose societal concerns are the value of property and the preservation of capital, in order to ensure the perpetuation of their economic supremacy in society.

The prototypical bourgeois: Molière’s Monsieur Jourdain, the protagonist of the play Le Bourgeois gentilhomme (1670)

Radebe’s vision of a better & more competitive society? Replace Monsieur Jourdain with a new version of Sandton’s bourgeoisie?

Antitrust plan unclear

How the SA antitrust watchdogs (the Competition Commission and the Competition Tribunal) were going to be “further developed” – structurally, scope/jurisdictionally, personnel-based or otherwise – was not immediately clear.

The remarks were part of the minister’s statement in the parliamentary opening debate on the president’s state-of-the-nation address.

Justice Minister Jeff Radebe (Image via Times Live, by: SYDNEY SESHIBEDI)

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event, Mauritius

Mauritian Competition Commission launches antitrust workshops for local authorities

 

mauritius

Mauritian Competition Commission launches advocacy program for local authorities

In an effort to foster local government awareness of competition law and “culture,” the CCM announced on June 9, 2014, that it would renew its existing antitrust advocacy program.  Its press release states:

The CCM remains devoted to its goal of enhancing a competition culture aimed at achieving a better regulatory policy in all administrative spheres. By providing the participants with an understanding of the interface between competition law and the responsibilities entrusted to Local Authorities, the upcoming advocacy programme aims to complement the Ministry of Local Government and Outer Islands’ vision towards fostering a vibrant local democracy; promoting effective, transparent and proactive delivery of services by Local Authorities.

As AAT previously reported, the CCM has also recently announced plans to introduce a formal corporate leniency policy to improve their cartel enforcement, as well as a market-division investigation in the beverage sector.

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