Competition Commission of Mauritius Launches Investigation into Cross-Border Money Transfers

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On 06 May 2015, the Competition Commission of Mauritius (“CCM”) identified the potential restrictive business practice which may exist between The Western Union Company (“Western Union”) and MoneyGram International Inc (“MoneyGram”) as a result of exclusive agreements (“Agreements”) put in place between the two companies.

The Agreements are purportedly entered into separately between the two companies and certain agents, which in turn, potentially prohibit the Agents from supplying competing services to their clients (the Agreements are not entered into between the two firms themselves, and thus do not constitute horizontal agreements) . These Agreements could have the further anti-competitive effect of creating a barrier to entry and possible foreclosure effects.

The CCM has indicated that they have not reached a conclusion yet as to whether these Agreements are in fact anti-competitive. It will also have to be seen whether there are any efficiency arguments would could possible justify such an exclusionary act (if the conduct does in fact breach any provision of the Competition Act, 2007 (the “Act”)).

As far as potential remedies are concerned, the conduct mentioned above could potentially fall under one of two main categories. The CCM could either view the Agreements as constituting “Other restrictive agreements” and/or “Monopoly situations” in terms of Section 45 or 46 of the Act, respectively.

A monopoly will be deemed to exist, in terms of the Act, if one enterprise provides at least 30% of the goods or services on the relevant market or, 70% of the goods or services on the relevant market are provided by 3 or fewer enterprises.

A monopoly situation may be subject to review if the CCM has reasonable grounds to believe that the enterprise(s) are engaging in conduct which: “Has the object or effect of preventing, restricting or distorting competition; or In any other way constitutes exploitation of the monopoly situation.”

As far for the possible penalties and/or remedies that may be imposed for breaching either Section 45 or 46, no financial penalties may be imposed by the CCM for violations of these two sections. Thus, in terms of the Act, the only type of vertical conduct which could lead to a financial penalty being imposed, is what is commonly known as ‘minimum price resale maintenance’. Thus, unlike many other African countries such as South Africa, a company who abuses its dominant position will not be exposed to financial liability, despite such conduct having substantial anti-competitive effects (provided such a company does not engage in horizontal agreements, bid-rigging or collusion or minimum resale agreements).

An infringement relating to Section 45 or 46 could only result in the CCM issuing directives, which have as their purpose, the objective of restoring competition in the market, and are not to be seen as being punitive in nature.

Proliferation of active multi-nation competition regimes continues

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6-member East African Community (EAC) to finalise competition law amendments

The EAC, a regional intergovernmental organisation comprising Burundi, Kenya, Rwanda, Tanzania, Uganda and South Sudan, is said to be drafting amendments to its thus-far essentially dormant regional fair Competition Act (dating back to 2006, EAC Competition Act 2006, 49 sections) to address antitrust concerns in the region.  The EAC’s legislative body is in the final stages of completing its work on the East African Community Competition (Amendment) Bill (2015).

In a 2010 paper, Alloys Mutabingwa (then Deputy Secretary General of the EAC Community Secretariat) writes:

As the EAC begins the implementation of the Common Market, one is pushed to wonder, which kind of competition do we currently have in the East African Community? Is it the kind of competition that constantly pushes companies to innovate and reduce prices? Does it increase the choice of products and services available to EAC consumers? Or, is it the type of competition that is defined by companies colluding to highjack the market? The answer lies somewhere in the middle but one thing is certain, with the intensification of competition in the EAC there will be frictions between companies across the region as they seek to gain advantage over their competitors.

In this short and worthwhile read, he stresses the importance of having a multi-national competition framework vs. a purely domestic network of independent enforcers.  Mr. Mutabingwa uses the example of the merger case of East African Breweries and South African Breweries, in which the Kenyan and Tanzanian competition authorities were “allowed by law to handle national practices only.”

According to an October 2014 article, “statistics show that the EAC’s total intra-regional trade soared from $2 billion in 2005 to $5.8 billion in 2012, while the total intra-regional exports grew from $500 million to $3.2 billion in the period under review.”  The  piece quotes an EAC competition official as saying that the enforcement agency would be online by December 2014.

In addition to the EAC efforts, a report also states that the head of economic affairs of the Tanzanian Fair Competition Tribunal (FCT), Nzinyangwa Mchany, recently emphasised the importance of member-state level enforcement, such as that of the country’s FCT and FCC, “to increase efficiency in the production, distribution and supply of goods and services to Tanzanians,” especially in economies that were centrally planned until only a few decades ago, and which have had to struggle with the ill after-effects of unregulated trade liberalisation and privatisation of state-owned enterprises.

Legislative action threatens to enlarge public-interest scope of merger review

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The Potential Impact on Public Interest Considerations of the Labour Relations Amendment Act

The recently enacted Labour Relations Amendment Act, 6 of 2014 (the “LRAA”) has potentially increased the scope and role employment, as a specified public interest ground listed in Section 12A of the Competition Act, 89 of 1998 (the “Act”), could have on merger reviews in South Africa.

Section 12A of the Act places an obligation on the South African Competition Authorities to (the “Authorities”), when evaluating a merger, to consider the impact that a proposed merger will have on a number of public interest grounds which are listed in the Act.

The Authorities have become increasingly proactive in imposing conditions on approved mergers, which aims to alleviate their concerns in relation to the potential impact that a proposed merger may have on any of the public interest grounds.

The most often relied upon public-interest ground is employment. In 2015 alone there have been five large mergers that have been approved, subject to conditions in relation to employment. [1]

When assessing the impact that a proposed merger will have on employment, the most crucial factor is the potential immediate retrenchments that may result from the merger.

Previously, the impact that a merger may have on employees who were on ‘fixed term’ employment contracts would not be a significant factor as the employment contract, it could be argued, was in any event to come to an end. However, the LRAA has now changed the position somewhat in this regard, as an employer may no longer conclude fixed term contracts with employees for a period of 3 months, unless the nature of the work to be performed is for a definite or limited duration, or there is another justifiable reason for concluding a fixed term contract.

Should the requirements for concluding a fixed term contract for a period of longer than three months not be met, such an employee will be deemed to be employed for an indefinite term.

Thus, for companies who make use of fixed term employment contracts (that are concluded for a period longer than three months), the scope and the potential negative impact (in the eyes of the Authorities) that a proposed merger will have on employment, could be significantly broader than previously the case.

[1] Delatrade 83 (Pty) Ltd and The JHI Retail Division of JHI Properties (Pty) Ltd and LP Manco, The Property Management Business of Liberty Holdings Ltd; Sasfin Bank Limited and Fintech (Pty) Ltd; Bytes People Solutions a Division of Bytes Technology Group South Africa (Pty) Ltd and Inter-Active Technologies (Pty) Ltd; Dimension Data (Pty) Ltd and The Following Three Business Divisions of Mweb Connet (Pty) Ltd: Mweb Business, Optinet Networks and Optinet Services; Shoprite Checkers (Pty) Ltd and The Assignment of Certain Leases and the Employment of Employees of Final Selected Stores OR Ellerines Furnitures (Pty) Ltd

South African Competition Commission’s Guidelines for the Determination of Administrative Penalties for Prohibited Practices (the “Guidelines”)

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On 17 April 2015, the new Guidelines were published in the Government Gazette (No. 38693). The Guidelines will come into effect on 1 May 2015.

The Guidelines have been adopted in response to criticism that there is a lack of transparency, certainty and consistency when imposing administrative penalties on firms for prohibited conduct.

Notably the Guidelines are virtually identical  to the guidelines which were published in November 2014 for comment (“draft guidelines”). Despite a number of individuals and entities submitting proactive and substantive comments to the South African Competition Commission (“SACC”) in relation to the draft guidelines, it is somewhat remarkable that the only material change effected by the SACC is to be found in the Guidelines is in 5.19.4., which deals with repeated conduct in terms of Section 59(3)(g) of the Competition Act, 89 of 1998 (the “Act”). The Guidelines now requires that a firm must have engaged in conduct which is substantially a repeat, of conduct previously found by the Competition Tribunal to be a prohibited practice. Previously, the word “substantially” was omitted from the draft guidelines. Beyond this the Guidelines mirror the draft guidelines of 2014.

The Guidelines set out a six step process to be used by the SACC  to calculate administrative penalties. The six steps are summarised below:

  1. An affected turnover in the base year is calculated;
  2. the base amount is a proportion of the affected turnover ranging from 0-30% depending on the type of infringement (the higher end of the scale being reserved for the more serious types of prohibited conduct such as collusion or price fixing);
  3. the amount obtained in step 2 is then multiplied by the number of years that the contravention took place;
  4. the amount in step 3 is then rounded off in terms of Section 59(20 of the Act which is limited to 10% of the firms turnover derived from or within South Africa;
  5. the amount in step 4 can be adjusted upwards or downwards depending on mitigating or aggravating circumstances; and
  6. the amount should again be rounded down in accordance with Section 59(2) of the Act if the sum exceeds the statutory limit.

It is important to note in the case of bid-rigging or collusive tendering, the affected turnover will be determined by calculating the value of the tender awarded. Thus, even where a firm deliberately ‘loses’ a tender, the firm will be subjected to an administrative penalty which calculates the value of the tender in the hands of the firm who ‘won’ the tender.

The Guidelines are not, however, clear as to how the affected turnover will be calculated when the value of the tender is not readily ascertainable.

Part of the objectives of the Guidelines is to encourage settlement proposals and outcomes. The SACC may at its sole discretion, offer a discount of between 10-50% of a potential administrative penalty as calculated in terms of the six steps identified. There are a number of factors that will determine what discount percentage will apply, including the timing, pro activeness and co-operation of the firm, during the settlement discussions.

Importantly, in terms of the Guidelines, a holding company (parent company) may be held liable for an administrative penalty imposed on one of the holding company’s subsidiaries (the proviso is that the holding company must directly control the subsidiary company). This is a noteworthy development and certainly raises constitutional concerns. The disregard of separate juristic personality, which is a well established principle in South African law, is problematic. These concerns, which were initially addressed by various parties with the SACC, have seemingly been ignored.

While the Guidelines are binding on the SACC, the Guidelines also afford the SACC the use of its discretion to impose administrative penalties on a case-by-case basis. Furthermore, the Guidelines are not binding on the Competition Tribunal or the Competition Appeal Court, who may also use their discretion to impose administrative penalties on a case-by-case basis.

SA guidelines for administrative penalties

Finally: One step forward for COMESA merger enforcement? New rules, new commissioners

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COMESA old flag color

Clarification or not?

Amended Rules for Merger Notification

Repealing the oft-criticised original 2012 Rules on the Determination of Merger Notification Threshold, the COMESA Board of Commissioners approved on March 26, 2015 the new set of Amended Merger Rules. These are ostensibly meant to permit parties and their legal counsel a more meaningful determination of filing fees, notification thresholds, and calculation of parties’ revenue (and asset) valuation.  Whilst many legal news outlets have reported (uncritically, as we fear) a high-level summary of these Rules, AAT undertook a critical review of them, and finds that many of the previously-identified flaws persist.

Filing Fee

The question of what parties had to pay in administrative fees to be permitted to file a merger notification with the Competition Commission was always in question (see here for AAT summaries of the issue).  We have reported on examples of fees that came dangerously close to the original $500,000 maximum limit.  Since then, the agency’s “Explanatory Note” (which still has a visible link on the Commission’s web site, but which happens to be an essentially “dead” web page, other than its amusing headline: “What is merger?“) attempted to clarify, and indeed informally change, the filing fee from a 0.5% figure to 0.01% of the parties’ annual COMESA-area turnover.

COMESA explanatory note

Where the filing fee stands now is, honestly, not clear to AAT.  While other sources have reiterated the revised fee of 0.1% with a maximum of $200,000, we fail to see any information whatsoever about the filing fee in the (partial set, containing only ANNEX 2 of) the Amended Rules made available by COMESA on its site, despite their title containing the term “fees”.  We have been able to determine, through some internet sleuthing on the COMESA site, that a document marked clearly as “DRAFT” does contain references to 0.1% and $200k maximum fees.

We note that we have now seen three different turnover percentage-based filing fees from COMESA: 0.01%, 0.1%, and 0.5%, as well as several different maxima.  Which shall govern in the end remains to be seen.  We do not envy those parties that have filed with COMESA and have paid the half-million dollar fee within the past 2 years, as we doubt they are entitled to restitution of their evident overpayment.

AAT predicts that this is where things will land, at 0.1% and $200,000, once the good folks at COMESA get around to actually editing the document and finalising their own legislation, so that practitioners and parties alike may have an original, statutory source document on which to rely

Our previous AAT advice has been very clear to companies envisaging a filing with COMESA: wait until the Commission and the Board clarify the regime in its entirety.  Do not file for fear of enforcement, because there is little if any enforcement yet, and the utter lack of clarity – apparently even within the agency itself – on the actual thresholds and other rules provides ample grounds for a legal challenge to the “constitutionality,” if you will, of the entire COMESA merger regime. 

Combined $50 million revenue threshold

What the 5-page document does show, however, is the new notification threshold embodied in Rule 4, which defines the threshold as follows:

Either (or both) of the acquiring and/or target firms must ‘operate’ [defined elsewhere] in at least two COMESA member states and have (1) combined annual turnover or assets of $50 million or more in the COMESA common market, AND (2) in line with the EU’s “two-thirds” merger rule, each of at least 2 parties to the merger must have at least $10 million revenue or assets within the COMESA zone, unless each of the merging parties achieves 2/3 or more of its aggregate revenue within one and the same member state.

The likewise-revised Form 12, the mandatory filing form, which is available in a scanned format (we hope this will be remedied and provided in more legible and native-electronic format soon by the secretariat) here, reflects the rules changes.  It must be submitted at a minimum within “30 days of the merging parties’ decisions [sic] to merge.”  The Competition Commission mus t make a decision within 120 days of receipt of (a complete) notification.

Interestingly, if the same two firms enter into multiple transactions within a 2-year period are to be treated “as one and the same merger arising on the date of the last transaction.” (See Rule 5, in a likely-misidentified subsection that is confusingly entitled 1.2.). Mimicking the EU Merger Regulation and Consolidated Jurisdictional Notice, the revised COMESA rules likewise contain special provisions for determining the revenues or assets of financial institutions (and their individual member-state branches’ income) as well as insurance companies.

Parents, sisters, subs: included.

Parent, sister and subsidiary entities are included in the revenue determination of the purchaser, to no surprise.  However, unlike what has been reported in the media, again we fail to see the (entirely logical) exclusion of the target parent’s turnover in calculating total revenues, other than in section 3.16 of the August 2014 Guidelines (which provides: “the annual turnover and value of assets of a target undertaking will not, for the purposes of these Guidelines, include the annual turnover or value of assets of its parents and their subsidiaries under Section 3.15)(d)where, after the merger is implemented, such parents are not parents of (i) the target undertaking if it remains after the merger, or (ii) the merged undertaking in the case of an amalgamation or combination“).

We observe the obvious: the Guidelines have no binding legal effect.

The Amended Rules do however provide that state-owned enterprises do not have to include their “parental” governmental revenues; for instance, if a state-owned airline like Air Tanzania were to acquire its counterpart, such as Air Mauritius, in a hypothetical COMESA-reportable transaction, the parties would not be required to report the full tax income or other revenues of the Tanzanian and Mauritian governments, respectively, but only those of the actual state-owned entity and its subsidiaries.

COMESA's 18th Summit in Ethiopia

18th COMESA Summit in Ethiopia

Four New Commissioners

As AAT reported previously, the Addis Ababa COMESA summit also saw the election and confirmation of four new Competition Commissioners.  We now have the full listing of the members, including the 4 new* ones (listed below in italics), whose term is for three years:

New 2015 Commissioners Origin
Ali Mohammed Afkada Djibouti
Amira Abdel Ghaffar* Egypt
Merkebu Zeleke Sime* Ethiopia
Francis Kariuki Kenya
Matthews Chikankheni Malawi
Georges Emmanuel Jude Tirant* Seychelles
Thabisile Langa Swaziland
Patrick Okilangole* Uganda
Chilufya Sampa Zambia

COMESA antitrust authority swears in 4 new commissioners

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COMESA out of service

Four new Commissioners sworn in – while COMESA’s own site fails to make announcement

We do not commonly report on news from the Seychelles here on AAT, but today, the Office of the President of the Seychelles has in fact beat AAT (as well as the COMESA Competition Commission itself (!)) to it: as the Office reports, the 18th COMESA Summit, held on 30th March 2015 in Addis Ababa, (a city that I have fallen in love with, by the way), saw the swearing-in of four new COMESA Competition Commissioners.

The summit also saw the swearing in of Mr. George Tirant, Chief Executive Officer of the Seychelles Fair Trading Commission. Mr. Tirant was appointed as a commissioner on the COMESA Competition Commission, alongside representatives from Egypt, Uganda and Ethiopia.

We have not yet identified the other new members that were sworn in this week, but in admitting so we note in the same breath that it is surprising for the authority itself not to have this relevant item anywhere on its site, neither in the News category nor anywhere else.  Indeed, the reader looks in vain for even a cursory Press Release announcing that 4 new Commissioners were seated for a new term of 3 years each. COMESA’s site still shows the outdated list of its Commissioners (copied below the photo below).

Irregular?  Perhaps.  But then again, we are used to outages and unfortunately much worse from the COMESA Competition Commission web site.

AAT notes that, in addition to the four new competition commissioners, the 19-country IGO also welcomed new:

  • Judge President and Judges of the Appellate Division of the COMESA Court of Justice
  • Principal Judge and Judges of the First Instance Division of the COMESA Court of Justice
  • the COMESA Committee of Elders
COMESA's 18th Summit in Ethiopia
COMESA’s 18th Summit in Ethiopia

[Outdated] List of Commissioners from Comp Comm web site:

  1. Commissioner Alexander Juvensio Kububa : Chairperson of the Board of Commissioners and former Chief Executive Officer of the Competition and Tariff Commission of Zimbabwe.
  2. Commissioner Mathews Chikankheni: Vice Chairperson of the Board of Commissioner and President of the Malawi Confederation of Chamber of Commerce and Industry.
  3. Commissioner Ali Mohamed Afkada: Inspector General des Services Judiciarisés’ de Djibouti.
  4. Commissioner Daniel Phillip Gappy – Former Chief Executive Officer of Fair Trading Commission of Seychelles and Chief Executive Officer of Seychelles Licensing Authority.
  5. Commissioner Rajeev Hasnah: former Deputy Director of Competition Commission of Mauritius.
  6. Commissioner Francis Kariuki: Director General of Competition Authority of Kenya.Commissioner Rajeev Hasnah:  Chief Economist and Deputy Executive Director of the Competition Commission of Mauritius.
  7. Commissioner Thabisile Pearl Langa’: Chief Executive Officer of Swaziland Competition Commission.
  8.  Commissioner Rostom Omar: Former Legal Counselor of Egyptian Competition Commission.
  9. Commissioner Chilufya Sampa: Chief Executive Officer of Competition Commission of Zambia

South Africa-Dawn Raids in Gauteng in Relation to Suppliers of Fire Control and Protection Systems

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south_africa

The South African Competition Commission (SACC) launched a dawn raid, in terms of Section 48 of the Competition Act, 89 of 1998, on the offices of six companies in Gauteng, who supply fire control and protection systems on 20 March 2015. The companies subjected to the dawn raid include:

  •  Belfa Fire (Pty) Ltd;
  • Cross Fire Management (Pty) Ltd;
  • Fire Control Systems (Pty) Ltd;
  • QD Air (Pty) Ltd;
  • Technological Fire Innovations (Pty) Ltd; and
  • Fireco (Pty) Ltd

According to the SACC’s spokesperson, the SACC has reasonable grounds to believe that these companies have been involved in collusion when bidding for tenders in respect to the provision of fire control and protection systems.  The dawn raid forms part of an on-going investigation into this alleged anti-competitive conduct. This is the first dawn raid conducted in 2015.  The SACC  conducted 3 dawn raids in 2014, after a substantial period of no activity signalling that the trend in 2014 may well continue in 2015.  Some of the dawn raids conducted in 2014 include:

  •  Investchem Pty Ltd (Investchem) and Akulu Marchon Pty Ltd (Akulu Marchon), in Kempton Park, Gauteng (December 2014);
  • Unilever in Durban and Sime Darby Hudson & Knight in Boksburg (April 2014);
  • Precision and Sons, Eldan Auto Body in Pretoria West and the Vehicle Accident Assessment Centre in Centurion (July 2014).

The SACC appears content to increasingly uitilise dawn raids as an investigative tool during its investigations into anti-competitive conduct. The increase in the use of dawn raids coincides with a change of senior management at the SACC.

New COMESA merger approvals: stats and details

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COMESA Competition Commission logo

COMESA publishes new Merger decisions

In the past week, the COMESA Competition Commission published the following decisions in its most recent merger cases, resulting from the CCC’s 14th meeting:

  • Case 1/15: Cannon (insurance) – decision time: 176 days – 4 member states affected.
  • Case 2/15: ImproChem (water treatment) – decision time: 166 days – 12 member states affected.
  • Case 3/15: Chlor Arkali (food-grade salt) – decision time: 135 days – 3 member states affected.

…and from its 15th meeting:

  • Case 4/15: Telkom SA (information and telecom technology) – decision time: 11 days (!) – 10 member states affected
  • Case 5/15: Platform Specialty Products (fungicides, herbicides, and insecticides) – decision time: 112 days – 9 member states affected

Of note are the following:

  1. The record time — 11 calendar days — in which the CCC resolved the Telkom transaction in favor of the South African provider, which aquired a BBBEE entity, despite the fact that the affected geographies encompassed 10 COMESA member states.
  2. The average time it took for the CCC to clear these 5 transactions was 120 days from notification to decision.
  3. All 5 notified transactions were unconditionally approved.
  4. The voting Commission members were, in all cases, Chilufya Sampa (Zambia), Thabisile Langa (Swaziland), and Alexander Kububa (Zimbabwe).

Finally, we observe that none of these merger matters presumptively benefitted from the upward-adjusted threshold (>$5 million), as they date to a pre-Assessment Guidelines era (see also here).

AAT’s updated COMESA merger statistics are thus as follows:

 COMESA merger stats 3-2015

Which economy is growing 2-3% above global average…?

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… Africa’s

AAT the big picture

According to a recent article in Polity, “Africa’s economy is projected to continue growing at between 2% and 3% above the global average over the next five years, helping it retain its position as one of the key emerging markets for 2015.”

It quotes a GIBS (Gordon Institute of Business Science) study showing that sub-Saharan Africa’s growth “outstripped global growth for the past 15 years,” which has “slowed down somewhat, owing to a number of challenges, including the drop in commodity prices.”  The GIBS study is the result of an assessment of countries’ institutional evolution, measuring how countries were performing in terms of developing competitive business and living environments across political, social and economic spheres.

Kenya was highlighted, with the authors noting that “Kenya, in terms of perceptions, is a very important country on the continent; it has, since 2007, put in place a number of reforms to build competitiveness. However, it doesn’t come out very well when you look at the data behind industry and comes out poorly in [the DMI], but what you find on the ground is that there is [an entirely] different sentiment.”

Meet the Enforcers: Companies Tribunal’s Prof. Kasturi Moodaliyar

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meet the enforcers

Interview with Professor Moodaliyar marks second in AAT interview series highlighting African enforcers

In the second instalment of our Meet the Enforcers series, we speak with Prof. Kasturi Moodaliyar. An Associate Professor of Competition Law, she is part-time member at the Companies Tribunal; ICASA’s Complaints and Compliance Committee; and the Film and Publication Board Appeal Tribunal. She holds a B.Proc. LLB.LLM.(Natal), M.Phil (Cambridge), and Prog. Economics and Public Finance (UNISA)

As an academic in South Africa, focussing on competition law, how do you perceive the major differences and challenges that developing or younger antitrust-law jurisdictions are faced with, compared to more established ones? Specifically with regards to the Competition Commission, what is your assessment of its strengths and weaknesses?

The Commission has established a credible reputation in the area of anti-cartel enforcement and merger regulation. However, it has been less effective in addressing abuse of dominance. This is a risk as there is increasingly an expectation that the Commission address problems of single firm dominance in concentrated markets in the South African economy. If performance continues to lag in this area it will impact negatively on the perceived effectiveness of the Commission. While under-deterence of abuse of dominance reflects some limitations in the legislation it also highlights the challenge of resource constraints faced by the Commission. Such cases demand extensive legal and economic expertise – a shift of priorities to this area may impact performance of the Commission in areas in which it has traditionally had more success (cartel busting, mergers). The use of complementary tools like market inquiries and advocacy will be important and can asset the Commission – but also places a burden on resources.

Regarding staff turnover: Do you see the personnel turnover in recent history to be of sufficient magnitude to have an impact on the performance of the enforcement agency?

It is a worrying development although there are signs that it is starting to stabilise. Although key executives were lost there are still a number of highly experienced staff at the middle management level within the institution that must be nurtured and developed. Some have moved into executive level positions. This is a positive development but also points to a level go juniority in the executive which may impact on effectiveness. Will watch this space.

On Leadership: Do you consider it a benefit or a hindrance if leadership want to introduce their own philosophy of what competition law should seek to achieve on the agency’s activities during their tenure, or do you think that the law is sufficiently clear, such that leadership should focus on efficient and effective delivery of the service, and leave the interpretation to the Tribunal/courts.

It is natural that any leader will bring their own perspective to the role – this cannot be avoided. However, it will be important for the leadership to ensure that such perspectives do not undermine their objectives in giving effect to the mandate of the Commission – which is set down in the Competition Act. Fortunately there are checks and balances in the adjudicative process (Tribunal, rights of appeal) to ensure that these objectives are not contradicted.

Prioritisation: Every agency has budgetary constraints. What are the factors that you think should be most important in how cases are prioritised, should this be based on the developmental needs to society, particular sectors, or even particular areas of the law. What do you think of the prioritisation of recent Section 8 cases, SAB (10 years on an issue that has been extensively sanitised by foreign agencies), Gold Reef News (de minimis), and Sasol Polymers (niche, with limited potential for downstream beneficiation)?

The Commission’s stated prioritisation principles seem reasonable (as they appear in annual reports). However, there is somewhat of a disjuncture between the principles and the outcomes – particularly with respect to abuse of dominance cases. In fact, the outcomes in respect of anti-cartel enforcement have been largely consistent with the application of the Commission’s prioritisation principles – so credit is deserved here. However, new thinking around prioritisation is needed for abuse of dominance cases. In this regard there needs to be a better integration between the Commissions’s policy and research activity, the use of market inquiries and its advocacy with its planning and actions around enforcement against abuse of dominance.

Do you believe that the Competition Tribunal has a role in relation to broader competition advocacy initiatives in South Africa by way of the decisions made?

Advocacy is primarily a function of the Competition Commission, not the Tribunal. The Tribunal must first and foremost safeguard the integrity of its adjudicative function by ensuring impartiality in its decision making processes. There is no harm done though if the Tribunal makes a contribution to the such initiatives as a bi-product of good decisions.

How important, in your view, is the political independence of competition enforcers?

It is very important if the integrity and effectiveness of the agency is to be upheld.

Comparing merger review in an African jurisdiction (any jurisdiction) with that of other competition enforcement agencies worldwide, where do you see the key differences?

A significant difference does appear to be the elevated status of public interest issues in merger proceedings.

What is your view about the elevation of non-competition assessments above those of pure competition tests in merger review? Is it good for the adjudication of competition matters generally?

It is not a problem in and of itself, and is to be expected given various developmental challenges. However, public interest considerations should not trump core competition concerns. In other words, agencies should strive to achieve consistency between the ‘pure’ competition policy objectives (competitive market structures, efficient outcomes etc) and public interest considerations. However, significant dangers arise when public interest objectives conflict with competition policy objectives. Where there are conflicts, alternative policy mechanisms should be considered so that agencies can focus on core non-conflicting objectives. Otherwise they may end up achieving nothing by trying to please everyone. This also means that the public interest considerations that do fall within the mandate of competition agencies should be carefully circumscribed.

What skills would you encourage regional African practitioners focus in on for purposes of developing antitrust advocacy in the region?

They should build a technocratic and professional staff with strong legal and economic skills. These core functions should also be supported by strong policy research and analysis skills – also of the technocratic professional (rather than political) variety. As an academic in this field I would also encourage ongoing training to strengthen those research, investigative and analytical skills.

Thank you, Professor Moodaliyar.