The ECOWAS Merger Control Regime: A New Chapter in Regional Competition Law

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By Matthew Freer 

Introduction

The Economic Community of West African States (“ECOWAS”) marked a significant step toward deeper regional integration and market regulation with the formal activation of its merger control regime on 1 October 2024. This regime, now operational under the ECOWAS Regional Competition Authority (“ERCA”), brings a unified, supranational dimension to competition enforcement across the 15 ECOWAS member states. These member states are Benin, Burkina Faso, Cabo Verde, Cote d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo.[1] This new framework aims to safeguard the regional market against anti-competitive mergers and acquisitions, foster economic development, and ensure fair competition. It also positions ECOWAS among the growing number of African regional economic communities introducing comprehensive competition oversight mechanisms.

Established on 28 May 1975 through the Treaty of Lagos, ECOWAS was conceived to promote economic integration across the West African sub-region. Its initial vision was to foster a large economic and trading bloc through cooperation in industry, transport, telecommunications, energy, agriculture, commerce, monetary and financial policy. Over time, ECOWAS has evolved to address broader governance issues, including political stability, security, and economic justice, making its merger control regime a natural extension of its mandate to build a fair and efficient regional economy.

Legal Foundations and Institutional Framework

The legal foundations and institutional framework for the ECOWAS merger control regime are built on a series of key legal instruments that establish the rules for competition within the region. The key foundational document is the Supplementary Act A/SA.1/12/08, adopted in 2008, which introduced the ECOWAS Competition Rules and established ERCA as the institutional mechanism to implement them.[2] This Act was followed by Regulation C/REG.23/12/21, which laid down the procedural rules for merger notification and review within the region.[3] In early 2024, Implementing Regulation No. 1/01/24 was promulgated to clarify notification thresholds, filing requirements, and review timelines.[4] These instruments collectively define the substantive and procedural contours of the regime and signal a shift toward rules-based governance of regional competition policy. 

Scope and Jurisdiction

The scope of the ECOWAS merger control regime is broad and designed to capture transactions with cross-border implications within the Community. The regime is both mandatory and suspensory in nature, meaning that parties must notify qualifying transactions and obtain clearance before implementation. Specifically, a merger must be notified if the parties involved operate in at least two ECOWAS member states and meet certain financial thresholds. The primary thresholds relate to turnover or asset value within the region: the combined turnover or relevant balance sheet total of the merging parties must exceed 20 million West African Units of Account (“WAUA”), roughly equivalent to $26.8 million, and at least two of the parties must individually exceed 5 million WAUA, or approximately $6.7 million.[5] Importantly, these thresholds are based on regional economic activity, rather than global figures, ensuring that the rules are directly tailored to the regional market context in which the member states operate. Still, companies operating primarily in a single large ECOWAS economy, such as Nigeria, may wonder whether regional thresholds fairly reflect domestic realities. 

Definition of Mergers and Control

Under the ECOWAS rules, the term “merger” includes a range of transactions such as acquisitions of control, the creation of joint ventures, or other forms of consolidation between entities.[6] “Control” is broadly defined to include not just the legal ownership of a majority of shares or voting rights but also de facto control—meaning the capacity to exert decisive influence over an enterprise’s strategic commercial behaviour.[7] In simpler terms, this means the ability to influence or decide a company’s major decisions and actions, even without owning it outright. This broad interpretation of control is similar to that used by both the Common Market for Eastern and Southern Africa (“COMESA”) and South Africa, which consider influence beyond shareholding, including through management or policy direction.[8]This mirrors a growing understanding across Africa that control can be exerted in subtle but decisive ways, not unlike influence in boardrooms or state-linked enterprises.

Procedural Review Timelines

Once a notification is submitted, ERCA’s Executive Director is tasked with the initial review of the merger, which must be concluded within 60 working days. If further information is required, the Director may extend this deadline by another 30 working days. After the completion of the initial review, the ERCA Council is granted an additional 30 working days to make a final decision on the transaction. This period may be extended by a further 15 days where necessary. Therefore, the total possible days for a final decision from the date of the initial notification is 135 working days. Although the legislation provides these timelines, it does not clarify the frequency of Council meetings, raising possible questions about potential procedural delays and administrative backlog. 

Understandably, given the novelty of the regime, there is a risk that administrative capacity may initially lag behind its procedural ambitions—though this is a challenge that is likely to diminish as institutional experience and capacity builds over time.

Notification Fees and Enforcement Penalties

The financial obligations imposed on notifying parties also deserve attention. A notification fee is payable and may amount to 0.1% of the combined annual turnover or asset value—whichever is higher—of the companies involved within ECOWAS. This fee structure, notably, has no statutory ceiling, which could render compliance particularly costly for large-scale mergers. Such uncapped fees introduce a level of uncertainty into the merger planning process and may discourage investment or create disparities between firms of different sizes. Given this, it might be worth considering a sliding scale or a cap to ensure that start-ups and small and medium enterprises (“SMEs”) are not unfairly burdened by compliance costs. Nevertheless, this mechanism reflects a growing trend among African competition authorities to align filing fees with the potential market impact of a transaction. 

If parties fail to notify a qualifying merger, or proceed with implementation before clearance is granted, ERCA may impose fines of up to 500,000 WAUA per day. These penalties, which equate to approximately $660,000 daily, are designed to ensure compliance and deter strategic non-disclosure.[9] This is notably harsher than COMESA’s flat $500,000 fine.[10] Such a stringent approach is consistent with the practices of more established jurisdictions and signals ERCA’s intent to enforce its mandate robustly. However, in a region where the ability to enforce regulations and the private sector’s understanding of competition law are still developing, this tough enforcement model could cause problems and require ongoing efforts to build capacity.

Substantive Assessment and Public Interest Considerations

In terms of substantive assessment, ERCA is empowered to block a merger that substantially lessens or is likely to substantially lessen competition within the ECOWAS common market. However, the authority also retains the discretion to approve otherwise anti-competitive mergers if they are deemed to serve a compelling public interest. This approach being similar to other African jurisdictions, particularly South Africa. Factors that may justify such exceptions include the promotion of socio-economic development, the protection of SMEs, and broader regional development goals.[11] This public interest override introduces a layer of flexibility to the competition assessment, but also demands careful balancing to ensure that economic efficiency is not sacrificed in pursuit of political or social objectives. Used wisely, this discretion can empower regional development—but overuse however could compromise the credibility of competition law as a neutral economic tool.

Appeals Mechanism and Judicial Review

The possibility of judicial review also reflects ECOWAS’s commitment to transparency and the rule of law. Parties aggrieved by ERCA’s decisions may appeal to the ECOWAS Court of Justice. This appeals mechanism is essential in safeguarding procedural fairness and offers a vital check on the Authority’s exercise of power.[12] However, the ECOWAS Court’s experience and ability to handle competition law cases are still developing, and it’s unclear how actively and effectively it will deal with these disputes. Building a body of jurisprudence will take time, but even a few early decisions could establish helpful precedent for future cases.

Emerging Challenges

Despite its promise, the implementation of the ECOWAS regime is not without its challenges. First among these is the potential for jurisdictional overlap with national competition authorities and with the West African Economic and Monetary Union (“UEMOA”), which also exercises competition law functions within several ECOWAS states. This duplication may result in regulatory uncertainty, forum shopping, and increased compliance costs for businesses operating in the region. In the East, COMESA faced similar early coordination challenges, and ECOWAS would do well to draw lessons from that experience in harmonising efforts with UEMOA. Moreover, the regime enters into force at a time of political uncertainty in West Africa, with three ECOWAS member states—Burkina Faso, Mali, and Niger—currently suspended or in the process of exiting the Community. The regional political context may complicate the regime’s uniform application and threaten its credibility as a pan-West African legal instrument.

Conclusion

Notwithstanding these concerns, the ECOWAS merger control framework represents a landmark moment in the evolution of African competition policy. It brings the region into alignment with global and continental trends, offering a platform for increased regulatory convergence and cross-border cooperation. For legal practitioners and multinational corporations operating in the region, the message is clear: compliance with ECOWAS merger rules is no longer optional, and legal due diligence must include early engagement with ERCA’s requirements. While aspects of the regime may still require some clarification and refinement, particularly in relation to thresholds, procedures, and enforcement modalities, the overall architecture provides a strong foundation for fostering competitive regional markets.

The operationalisation of the ECOWAS merger control regime is a welcome development for those advocating deeper economic integration and regulatory harmonisation in West Africa. As the Authority gains experience and jurisprudence begins to develop, ERCA is likely to become a central actor in shaping the competitive landscape of the region. For this to succeed, continued engagement between regional institutions, national authorities, and the private sector will be essential. The challenge ahead lies not only in enforcing the rules but in embedding a culture of compliance and competition across ECOWAS’s diverse and dynamic member states. In time, perhaps ECOWAS could even serve as a model for other African regions where economic integration is still at a conceptual stage.

 

[2] Economic Community of West African States (ECOWAS), Regulation C/REG.23/12/21 on the Implementation of the ECOWAS Competition Rules by the ECOWAS Regional Competition Authority (ERCA), December 2021

[3] Regulation C/REG 23/12/21 on the Rules of Procedure for Mergers and Acquisitions in ECOWAS

[4] Regulation C/REG.1/01/24 on the Procedural Manuals on Thresholds for Mergers and Acquisitions in ECOWAS. 

[5] Manual of Threshold for Mergers and Acquisitions and Threshold Indicating a Dominant and Monopolistic Position.

[6] Manual of Threshold for Mergers and Acquisitions and Threshold Indicating a Dominant and Monopolistic Position. At page 3.

[7] Supplementary Act A/AS.1/12/08 Adopting Community Competition Rules and the Modalities of their Application within ECOWAS.

[8] COMESA Merger Guidelines (2014), sec. 2.3.

 

[10] COMESA Competition Rules, Art. 24.

[11] Economic Community of West African States (ECOWAS), Regulation C/REG.23/12/21 on the Implementation of the ECOWAS Competition Rules by the ECOWAS Regional Competition Authority (ERCA), December 2021.

[12] ECOWAS Regional Competition Authority (ERCA), Welcome to ECOWAS Regional Competition Authority, available at: https://www.arcc-erca.org/ (accessed 25 April 2025).

Borrowed Blueprints, Unintended Consequences: South Africa and the EU’s Digital Markets Act

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By Matthias Bauer and Dyuti Pandya*

South Africa risks adopting the essence of the EU’s Digital Markets Act (DMA), if not its exact form, with the aim of reshaping the business models of online intermediation platforms. This marks a significant shift away from the principles of traditional competition regulation. 

In 2020, the Competition Commission of South Africa (CCSA) concluded that traditional enforcement tools might be inadequate to tackle structural barriers in digital markets particularly those that prevent new entrants or smaller players from expanding. This realisation led to the launch of the Online Intermediation Platforms Market Inquiry (OIPMI). By borrowing a regulatory blueprint designed for the EU, South Africa could undermine its own digital ecosystem, stifle investment, and entrench local inefficiencies. The country’s growing interest in ex ante competition regulation via the Competition Commission’s market inquiries reflects an accelerating trend of policy mimicry without consideration of domestic realities. While there is broad agreement on the need for digital competition regulation, there is little consensus on how these rules should be structured, and approaches to implementation remain highly varied across jurisdictions. 

The OIPMI’s final report identified platforms such as Google, Apple, Takealot, Uber Eats, and Booking.com as dominant players distorting competition. It is claimed that, due to the significant online leads and sales these platforms generate and the high level of dependency business users have on them these scaled platforms can influence competition among businesses on the platform or exploit them through fees, ranking algorithms, or restrictive terms and conditions. However, this conclusion raises concerns about the underlying methodology. A central concern with the market inquiry approach is that it allows certain platforms to be identified as market leaders or sources of competitive distortion without requiring a formal finding of dominance, since such inquiries do not mandate that dominance be established. 

The designation has been based on characteristics typically associated with globally leading technology firms. Amazon, which currently maintains only a minimal presence in South Africa, was nevertheless singled out as a potential threat to competition. It is claimed that Amazon faces similar complaints in other jurisdictions, and it is argued that fair treatment of marketplace sellers is unlikely to become a competitive differentiator capable of overcoming barriers to seller competition. Moreover, the CCSA has indicated that it would enforce the same provisions against Amazon if it were to enter the market in a way that breaches the proposed remedial measures.

Regulating for hypothetical risks while ignoring tangible consumer benefits risks becoming a self-fulfilling prophecy: global platforms may decide not to enter the market at all, leaving consumers, including small businesses and public services organisations with fewer options and slower innovation.

The OIPMI focuses on structural features that restrict competition both between platforms and among business users, facilitate the exploitation of business users, and hinder the inclusion of small enterprises and historically disadvantaged firms in the digital economy. Despite the absence of formal dominance findings, the OIPMI proposes a range of heavy-handed interventions, including the removal of price parity clauses, the introduction of transparent advertising standards, a ban on platform self-preferencing, and limitations on the use of seller data, many directly inspired by the EU DMA. 

In both of CCSA’s  2022 and 2023 findings, Google Search was explicitly accused of preferential placement and distorting platform competition in South Africa. More concerning still are the CCSA’s proposed remedies in its final report- requiring targeted companies to offer free advertising space to rivals, artificially boost local competitors in search rankings, and redesign their platforms to favour smaller firms. The SACC has recommended that Google introduce identifiers, filters, and direct payment options to support local platforms, SMEs, and Black-owned businesses, and contribute ZAR150 million (around EUR 7 million) to offset its competitive advantage. For search results, Google is required to introduce a new platform sites unit (or carousel) that prominently showcases smaller South African platforms relevant to the user’s query such as local travel platforms in travel-related searches entirely free of charge. This goes beyond competition enforcement and crosses into market engineering, compelling global firms not just to compete by government decree, but to subsidise rivals and actively shape market outcomes.

In 2025, South Africa’s Competition Commission also doubled down with its provisional Media and Digital Platforms Market Inquiry (MDPMI), calling for additional remedies targeting online advertising, content distribution, and the visibility of news media. These recommendations are again influenced by EU-style regulations, particularly the EU Copyright Directive, which harms the diversity and sustainability of small news publishers. However, the report downplays South Africa’s unique institutional constraints and specific market dynamics. If adopted, the proposals would compel digital platforms to subsidise select publishers based on arbitrary and hard-to-measure assessments of news content’s value to Google’s business. This could limit access to information, hinder innovation, and monetisation efforts, ultimately narrowing consumer choice and weakening the vibrancy of the content ecosystem.

More broadly, through these market inquiries South Africa risks undermining its evolving digital economy by pursuing an approach that will deter foreign investment due to ambiguous and discretionary enforcement. At the same time, the proposed regulatory burdens could disproportionately affect domestic firms that simply lack the resources to comply. This regulatory uncertainty threatens to stifle innovation and hinder progress toward regional digital integration. In a country where corruption remains a persistent challenge, granting regulators wide discretionary powers over digital market outcomes also raises serious governance concerns. Moreover, by enforcing a narrow and politicised notion of “fairness”, South Africa risks sacrificing consumer choice and strangling the diversity of digital services that a competitive market would otherwise deliver.

Notably, coming back to the EU’s DMA, it was crafted for specific European conditions, particularly in markets where technologically-leading global platforms held relatively high market shares in many EU Member States. Yet even within the EU, the DMA remains hotly disputed – not least because it targets large non-European companies that have long been politically embraced for injecting digitisation into traditional industries and, through competition, helped European businesses and consumers benefit from technology innovation. 

EU digital policies, developed from the perspective of wealthy, mature (Western) European markets, should not be assumed to be readily applicable elsewhere. South Africa’s digital markets are still in their infancy, ICT infrastructure remains unevenly developed, and regulatory institutions face significant resource constraints. Emulating the DMA – even informally – risks premature intervention, regulatory overreach, and the distortion of competitive dynamics before they have had a proper chance to emerge and mature.

Competition policy undoubtedly has a role in promoting competition. But poorly tailored rules may end up punishing the very firms that South Africa needs to scale and empower its own digital economy. Instead of replicating the EU’s Digital Markets Act, South Africa should focus on evidence-based case-by-case enforcement – grounded in its own market realities and institutional capabilities. Otherwise, South Africa risks becoming the casualty of a regulatory experiment designed for a different continent – with consequences its digital economy can ill afford.

*The authors are affiliated with ECIPE, the European Centre for International Political Economy

Nigeria Flexes Regulatory Muscle: Tribunal Upholds $220 million fine against WhatsApp and Meta over data discrimination practices  

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By Nicole Araujo

On 25 April 2025, almost a year after the Federal Competition and Consumer Protection Commission (“FCCPC”) imposed a hefty $220 million fine on WhatsApp and its parent company, Meta, the Competition and Consumer Protection Tribunal (“Tribunal”) delivered its landmark decision, upholding the fine and ordering a further – almost negligible, when compared to the substantive fine – $35,000 administrative penalty against the social media giants for fact-finding costs incurred during the 38-month long investigation. This regulatory win for Nigeria’s digital rights landscape has contributed to reinforcing Nigeria’s growing resolve to regulate big tech.

The decision stemmed from findings that the companies engaged in discriminatory data practices and violated Nigerian data protection laws, affecting more than 51 million users.  As Andreas Stargard, a competition-law practitioner with Primerio, notes, “not only did the FCCPC’s investigation uncover WhatsApp’s unauthorised sharing of user data and a lack of meaningful consent mechanisms, but it also revealed discriminatory practices compared to other regions – I believe this is where the differentiation in the FCCPC’s consumer-protection jurisdiction (as opposed to that of the domestic data protection authority) comes in meaningfully.  It remains to be seen what an independent, judicial review of the Tribunal decision will yield in this regard, but the FCCPC has had a comparatively strong track record so far in terms of having its novel, forceful, and ‘creative’ enforcement strategies upheld, with the B.A.T. matter perhaps being the most powerful example.  The recent Dangote matter, involving the shocking fact pattern of a lack of refining capabilities in oil-rich Nigeria, is an interesting counter-point, though, as the FCCPC lost an attempt to intervene in that matter in Abuja’s Federal High Court.”

So far, the appellate-level Tribunal has sided with the Commission, dismissing an appellate request for review by WhatsApp and Meta, which challenged the fine on 22 grounds, ranging from procedural errors to allegations of vagueness and technical impossibility in respect of the timeframe given by the FCCPC. Meta’s legal team relied on the grounds that the FCCPC’s orders were unclear, unsupported by Nigerian law, and financially impractical to comply with. However, the FCCPC argued that the penalties were not financially punitive but rather corrective and aimed at rectifying the tech giant’s alleged discriminatory practices.

In its decision, the Tribunal emphasised that the FCCPC acted within its lawful mandate and that WhatsApp and Meta were afforded a fair hearing. It further upheld that the reliance on foreign legal standards, while not binding, was appropriately persuasive in determining issues of data protection and consumer rights.

The Tribunal ordered WhatsApp and Meta to inter alia, reinstate Nigerian users’ rights to control their personal data, revert to their 2016 data-sharing policy, and immediately cease unauthorised data sharing with Facebook and other third parties without obtaining the necessary consent from users. In this regard, compliance letters must be submitted by July 1, 2025, and a revised data policy must be proposed and published. 

This case marks a significant moment in the Nigerian Authority’s forceful use of the regulatory tools available to it — as well as overall for Africa’s evolving digital economy, highlighting the demand for global corporations to acknowledge local presence and effects and adapt to robust local compliance expectations. While Big Tech companies such as Amazon, Google and Meta have been subject to significant penalties under the European Union’s General Data Protection Regulation, as one of Africa’s digital technology pioneers, Nigeria’s move could inspire similar enforcement actions across the African continent. This decision can be seen as a “gentle” reminder for multinational digital and tech firms that compliance with local data protection laws is no longer optional, it is imperative.

Babatunde Irukera, Florence Abebe, Andreas Stargard at the African Antitrust Salon hosted by Primerio

While more African countries are pushing back against big tech companies and are focusing on unchecked data exploitation within their borders, there is a need, however, for the continent to build towards a larger, sustainable strategy to manage the presence and power of big tech.  Says Andreas Stargard, “the quarter-billion dollar Meta fine, if upheld, would firmly cement Nigeria’s antitrust global relevance in the minds of international lawyers and businesses.  This comes as a surprise in some ways, as the FCCPC was first put on the map only fairly recently, by its inaugural Chief enforcer, Tunde Irukera: his vision for creative enforcement tools and encouragement of the agency’s staff to employ heretofore unused investigatory mechanisms and strategies – often seen only in U.S.-style civil litigation, and certainly not in many government agencies worldwide, much less among other African jurisdictions – show that the Commission potentially has the necessary intellectual capacity and investigatory stamina to pursue cases of equal or greater dimensions in the future.  It will depend on its leadership where the FCCPC’s path is charted next…”

Of course, there needs to be a balance struck between the value of personal data and that of innovation and tech adoption, which calls for a coordinated regulation policy that will strive to balance economic and non-economic features of the continent. 

As observed by Leonard Ugbajah, a competition law consultant, a balanced and pragmatic approach is essential when opting to address the regulatory landscape around big tech: 

“A common approach would harness the capabilities of countries, moderate opportunism by state and non-state actors in pursuing enforcement, recognise the economic importance of big tech, properly calibrate the various pain points (economic and non-economic) and safeguard the interests of the not-so-capable African countries.” 

The social media giants have 60 days, starting from 30 April 2025, to comply with the $220 million fine ordered by the Tribunal. Notably, following the decision, WhatsApp has indicated that it intends to seek a stay of the Tribunal’s decision and pursue an appeal. 

Slippery Business: COMESA Court Invalidates Mauritius’ Edible Oil Tariff

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By Matthew Freer

Introduction

On 4 February 2025, the First Instance Division (the “FID”) of the COMESA Court of Justice (the “CCJ”) delivered a landmark judgment in Agiliss Ltd v. The Republic of Mauritius and Others (Reference No. 1 of 2019). This case examined the legality of a safeguard measure imposed by Mauritius on edible oil imports from COMESA member states, raising fundamental questions about trade remedies, due process, and compliance with the COMESA Treaty and its subsidiary legislation.

The judgment is significant as it clarifies the procedural and substantive requirements for imposing safeguard measures under the COMESA Treaty (the “Treaty”) and the COMESA Regulations on Trade Remedy Measures, 2002 (the “2002 Regulations”). It reinforces the principle that such measures cannot be used arbitrarily or as disguised trade barriers but must follow due process, including proper investigation, consultation, and notification requirements.

Background

The Common Market for Eastern and Southern Africa (“COMESA”) is a regional economic organization established in 1994 to promote economic integration and development among its member states. It has a primary goal of creating a large, integrated economic area through the removal of trade barriers and the promotion of cooperation in areas such as trade, industry, and agriculture. COMESA comprises 21 member states, including countries like Kenya, Egypt, Zambia, and Ethiopia, and focuses on fostering intra-regional trade through the harmonisation of customs procedures and the elimination of tariffs between member states. Article 46 of the Treaty specifically states that Member States of COMESA are required “to eliminate customs duties and other charges of equivalent effect imposed on goods eligible for Common Market tariff treatment” (COMESA Treaty, Art 46). This common market was ultimately formed to enhance trade and economic stability within the region, improve competitiveness, and encourage sustainable development through collective economic policies and regional cooperation.

Agiliss Ltd, a Mauritian based, imports various basic commodities which includes pre-packaged edible oils, from Egypt, a fellow COMESA Member State. Agiliss Ltd is “principally an importer and distributor of staple food in the Republic of Mauritius with the edible oil segment representing some 30% of its business” (para 11). In 2018, the Government of Mauritius (the “Government”), after seeing an increase in edible oil imports, invoked Article 61 of the Treaty to impose a 10% customs duty on edible oils imported from COMESA countries (para 12). This safeguard measure was said to be necessary to protect Mauritius’ domestic edible oil industry from serious economic disturbances.

Agiliss, however, raised its concern that the measure was imposed without proper notification, consultation, or investigation, violating various COMESA legal frameworks. After unsuccessful engagements with the Government, Agiliss Ltd filed a Reference before the CCJ, challenging the legality of the safeguard measure and requesting an order to prohibit its enforcement.

Findings of the Court

In this case, Ms. Ramdenee, CEO of Agiliss Ltd, and her expert witness, Mr. Paul Baker, presented a case to challenging the decision by the Government to impose a safeguard measure on edible oil imports from Egypt, a COMESA Member State, using Article 61 of the Treaty (para 151). Article 61 of the Treaty states, “In the event of serious disturbances occurring in the economy of a Member State following the application of the provisions of this Chapter, the Member State concerned shall, after informing the Secretary-General and the other Member States, take necessary safeguard 79 measures” (COMESA Treaty, Art 61).

The central claim was that Government violated the Treaty and the 2002 Regulations by not adhering to required processes, particularly in terms of the investigation and consultations related to the imposition of the safeguard measure.

The key issue was whether the Government conducted the investigation required by the 2002 Regulations and the Treaty before imposing the safeguard measure. The Government’s report on “Investigation on Imports of Oil” was deemed insufficient and non-compliant (para 163). Although the report referenced Regulation 7.1 of the 2002 Regulations, which allowed for safeguard measures due to “serious injury” caused by increased imports, it failed to comply with the more detailed procedural requirements of Regulation 8 of the 2002 Regulations, which mandates that investigations must include public notice, hearings, and the opportunity for stakeholders to provide evidence (para 162). Ms. Ramdenee argued that her company, as a major importer, was not consulted, and that this lack of due process would severely impact her business (para 157).

Moreover, the investigation was criticized for not being thorough or adequately substantiated. Mr. Baker pointed out inaccuracies, such as the failure to compare oil prices internationally, and argued that the alleged “surge” in imports was not supported by data (para 165). He further noted that the report’s conclusions about the link between import increases and the domestic industry’s decline lacked comprehensive evidence, specifically disregarding other relevant factors affecting the industry. The Government did not provide rebuttal evidence to counter these criticisms (para 165).

Additionally, the Government’s failure to notify the COMESA Committee on Trade Remedies as required by Regulation 15 of the 2002 Regulations was a significant violation (para 168). Although the Government argued that the Trade Remedies Committee did not exist at the time, the Court found that the absence of the Committee did not absolve the Government from conducting the investigation as required by Regulation 8 of the 2002 Regulations, which was not dependent on the Committee’s existence (para 171).

Lastly, the Court examined whether the safeguard measures imposed were necessary and proportionate. The proposed safeguard measure, which included a 10% customs duty on oil imports above a 3,000-tonne quota, lacked justification. There was no explanation provided for why these specific thresholds were chosen, and Mr. Baker suggested that the 10% rate appeared arbitrary and unsupported by any modelling or analysis of the impact on imports (para 177). Furthermore, the application of a quota and tariff did not align with Regulation 10.1 of the 2022 Regulations, which demands a careful analysis of market conditions to ensure that safeguard measures are not overly restrictive (para 178).

Ultimately, the Court found that the investigation carried out by the Government did not comply with the provisions of the Treaty and 2002 Regulations, and the proposed safeguard measure was not justified by sufficient evidence or proper procedures. In the final analysis, the Court has issued several key orders. First, the decision of the Government to impose the safeguard measure, along with all consequential steps taken, is declared a nullity (para 227(a)). In terms of costs, the Court has ordered the Government to pay half of the Agiliss Ltd’s costs incurred in this Reference (para 227 (c)).

Key aspects of the case

This case marks a significant milestone for the COMESA Court of Justice due to its critical examination of safeguard measures within the context of Common Markets. The FID’s ruling highlights key aspects of trade remedy procedures, particularly emphasising the importance of compliance with the COMESA Treaty and the 2002 Regulations. The Court’s findings reinforce that safeguard measures cannot be applied arbitrarily; they must adhere to proper investigation, consultation, and notification processes.

Furthermore, the judgment serves as a reminder that such measures must be substantiated with sufficient evidence to avoid being used as disguised trade barriers. The ruling clarifies procedural expectations for all COMESA member states, ensuring that trade remedies are transparent, fair, and justifiable in line with regional economic integration goals. Although safeguards are a vital tool for shielding domestic industries, the ruling underscores that they must not be applied without the proper investigations and Member State consultation processes. This case establishes a key precedent for future trade disputes within COMESA and emphasises the Court’s essential role in upholding the rule of law and interpreting the Treaty and its related regulations.

Have Confidential Info? Follow the Guidelines…

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South African Competition Commission Releases Draft Guidelines on Handling Confidential Information

By Olivia Sousa Holl

Introduction

On 3 February 2024, the Competition Commission of South Africa (“Commission”) released draft guidelines (“Guidelines”) that govern the handling of confidential information, the access thereto and the disclosure of such. The investigative and adjudicative powers granted to the competition authorities in South Africa, enable the frequent handling of sensitive business information. Some have raised concerns regarding overly broad confidentiality claims that hinder the Commission’s ability to conduct investigations in a transparent and efficient manner. These guidelines seek to strike a balance between protecting commercially sensitive data while ensuring fairness, transparency, and public engagement with Competition Authorities’ decisions and reasons which form the basis of competition law jurisprudence.

These guidelines intend to provide clarity on how firms and individuals can claim confidentiality over submitted information and how the Commission will assess such claims. They also establish a framework for determining who may access confidential information and under what conditions. The guidelines discourage excessive redaction, and blanket confidentiality claims that obstruct legal proceedings and prevent meaningful participation by affected parties, such as trade unions and public interest groups. Ultimately, aiming to ensure that competition law processes continue to uphold principles of fairness and procedural justice.

The Competition Act No. 89 of 1998 (“Act”) defines what constitutes confidential information, as “trade, business, or individual information that belongs to a firm, has a particular economic value, and is not generally available to or known by others” in section 1(1)(vii).

The Guidelines emphasise that all three criteria must be met for a confidentiality claim to be valid. According to section 44(1)(b) of the Act, a confidentiality claim must be supported by a written statement explaining why the information is confidential. The guidelines further emphasise that overly broad claims will not be accepted and that firms must justify their claims with specific reasons.

In the Guidelines, the Commission has identified that which is considered to generally constitute confidential information, such as, trade secrets, pricing strategies, financial records of unlisted firms, and internal business strategy documents. The Guidelines then go on to state that information such as that which is publicly available, financial statements, shareholding structures, product descriptions, and industry-wide historical data are unlikely to qualify for confidentiality protection.

Claiming Confidentiality: The Form CC7 Process

Section 44(4) of the Act mandates that firms submit both a confidential and non-confidential version of their submissions. Failure to submit a Form CC7 with a written justification may result in the Commission rejecting the confidentiality claim. Once a confidentiality claim has been made, as per section 44(2) of the Act, the Commission must treat the information as confidential until a final determination is reached.

To claim confidentiality, firms must submit a Form CC7, which require:

  1. Identification of the confidential information, including the document name, page, and line number.
  2. A justification for why the information qualifies as confidential, explaining its economic value and how disclosure would cause harm.
  3. Details of existing access restrictions, specifying who currently has access to the information and under what conditions.

Balancing confidentiality and fairness

While the guidelines reinforce the importance of protecting genuinely sensitive information, they also stress the need to balance confidentiality with fairness in competition law proceedings. Various regimes of access to confidential information are outlined, depending on the role and interests of the requesting party.

In most cases, confidential information may be shared with a requesting party’s external legal representatives and economic experts, provided they sign a strict confidentiality undertaking. Section 44(9) explicitly permits the “disclosure of confidential information to the independent legal representatives and economic advisors of a person requesting access, in a manner determined by the circumstances and subject to appropriate confidentiality undertakings, is an appropriate determination concerning access”. (Competition Act)

This access regime ensures that merger parties, respondents, and intervenors can engage meaningfully in legal proceedings without direct access to their competitor’s sensitive business data.

Access by public officials and third parties

The guidelines also address access to confidential information by public officials and third parties. The Minister of Trade, Industry, and Competition has a statutory right to access confidential information in merger proceedings, as provided for in Section 45(3)(a) of the Act. Trade unions and employee representatives must also be given sufficient access to merger-related documents to participate meaningfully in Tribunal hearings.

Public Interest

The guidelines acknowledge the public interest in access to competition law decisions. Warning against excessive redaction, which can undermine transparency and legal precedent. In market inquiries, firms are prohibited from claiming confidentiality over an entire submission, instead it should provide a redacted public version of documents within five days of filing confidential submissions.

If the Commission rejects a confidentiality claim, the claimant has the right to appeal the decision to the Competition Tribunal under Section 45(1) of the Act. If dissatisfied with the Tribunal’s ruling, they may further appeal to the Competition Appeal Court (“CAC”) under Section 45(2) of the Act.

In resolving confidentiality disputes, the Tribunal applies a balancing test that considers:

  • The right to a fair hearing (ensuring parties can properly engage with evidence).
  • The need to protect confidential business interests.
  • The public interest in transparency and competition law enforcement.

The guidelines reinforce that the default position is disclosure, particularly for independent legal advisors, and that confidentiality claims must be well-founded

The Commission also confirms that the unauthorised disclosure of confidential information is a violation of the Act. However, it emphasises that these guidelines are intended to improve transparency and procedural fairness while maintaining robust protections for sensitive business information. The Commission reserves the right to amend the guidelines periodically based on legal developments, stakeholder feedback, and international best practices in competition law enforcement.

Public comment

The Competition Commission invites public comments on the draft guidelines, with written submissions due before 3 March 2025. These guidelines represent a significant step toward improving transparency, procedural fairness, and public access to competition law decisions while maintaining necessary protections for business confidentiality.

Betting on Fair Play: Competition Tribunal orders Interim Relief to Lottoland in Google Ads dispute

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By Matthew Freer

Introduction

On 12 November 2024, Lottoland South Africa (Pty) Ltd (“Lottoland”) was granted interim relief by The Competition Tribunal (“The Tribunal”) against Google Ireland Limited and Google South Africa (Pty) Ltd (collectively “Google”).

Lottoland, a licensed bookmaker as of 7 November 2017 in terms of the Western Cape Gambling and Racing Act, offers fixed-odds bets on the outcome of an array of lotteries worldwide, including the South African National Lottery and various sporting events.[1] Lottoland’s competitors include other licensed bookmakers within the country such as Hollywood Bets, World Sports Betting and Betway, among others. Google, controlled by Google LLC, is a multinational technology company specialising in internet-related services and products, including search engines, online advertising technologies and more. Google is best known for its search engine and advertising platform, Google Ads, which is a key revenue driver for the company. Google Ads allows businesses to display advertisements on Google’s search engine results pages, partner websites and other platforms using a pay-per-clicks model where advertisers bid on keywords to reach targeted audiences. Businesses utilise this service to maximise visibility with the aim of gaining more customers.

In 2020 Google terminated Lottoland’s access to Google Ads, which Lottoland argued was without justification given that the other licensed bookmakers, providing like services, still had access to Google Ad Services. This termination caused financial harm to Lottoland, and it was argued to distort the competition in this very market that Lottoland operated with detrimental effect on options available to consumers. Google’s main argument was that Lottoland’s services contravene certain sections of the Lotteries Act and by granting them access to their Google Ads services, Google’s policies and reputation could be under scrutiny in a public light.

What is an Interim Relief Application?

An Interim Relief Application, in terms of by section 49C of the Competition Act, 89 of 1998 (“Act”), is a temporary measure sought to address an alleged prohibited practice and aimed to prevent serious or irreparable harm pending the outcome of a hearing.[2] “The Tribunal will only grant such relief if it is of the opinion that it is reasonable and just, having regard to the following factors:”[3]

  • The evidence relating to the alleged prohibited practice;
  • the need to prevent serious or irreparable damage to the applicant; and
  • the balance of convenience.

The Tribunal must make a summary assessment before granting such application and this assessment is only at a “prima facie level”.[4] The Tribunal has held that the three above steps must be applied holistically whilst balancing each factor against the other. In this regard “a weak case on say irreparable harm may be counterweighted by a very strong case on the prohibited conduct. And vice versa…”.[5]

In the event an interim relief order is granted, it operates for a period of six months from its date, or the conclusion of the hearing, whichever is earliest.

What is the prohibited practice?

The basis of Lottoland’s application was that Google had contravened sections 8(1)(d)(ii) and 8(1)(c) of the Act.[6] Section 8(1)(d)(ii) states that a firm may not engage in exclusionary acts, such as refusing to supply scarce goods or services to a competitor or customer, unless it can demonstrate that the technological, efficiency, or other pro-competitive benefits outweigh the anti-competitive impact of its actions, and providing the goods or services is economically feasible.[7] Section 8(1)(c) prohibits a dominant firm from engaging in an exclusionary act if the anti-competitive effect of that act outweighs its technological, efficiency or other pro-competitive gain.[8] The overarching element that must be proved in both instances is that there must be a showing of dominance by the firm within the market in question.

A showing of dominance

Google raised the argument that they are not dominant within the ‘advertising ecosystem’ which includes both online (Google Ads) and offline advertising (print media, billboards, television, etc.) However, The Tribunal took a more detailed approach to determine the specific market Google is operating in, while accounting for the market in which Lottoland and its competitors are advertising in. The Tribunal refused the idea that the market in issue is that of the broader ‘advertising ecosystem’ but it is rather the specific market of online advertising, and even more specifically, the market for online search and search engine marketing (“SEM”) markets. The Tribunal stated that the service of Google Ads operates within this specific market, and it was proven, prima facie, that Google is likely to be dominant in this market in South Africa. Thus, rejecting Google’s argument that they should be viewed as operating in the broader ‘advertising ecosystem’.  

Lottoland submitted that Google has a market share of more than 90% in the SEM market, measured by search volume, and states that such dominance is well-established as The Commission had stated that Google is “the monopoly provider of intent-based marketing and customer acquisition in SA…”.[9]

Section 8(1)(d)(ii) and 8(1)(c) of the Competition Act

Now that dominance is established, we can break down and analyse each element that needs to be proved in terms of this section. The first element involves a refusal to supply a customer. On the face of such scenario, Google has refused to supply Lottoland with their service of Google Ads as Google terminated Lottoland’s access. Google had argued that by allowing Lottoland access to such service there is a potential for criminal liability or other commercial risks. The Tribunal’s ultimate findings was that this argument lacked basis as Lottoland’s competitors were provided access, showing an inconsistent enforcement of Google’s “internal policies”. Furthermore, The Tribunal stated that there is insufficient evidence to suggest that Lottoland had contravened the Lotteries Act.

The second element of proof is that of scarce goods or services. It was indicated in eMedia that a scarce good or service is one that is i) impossible or prohibitively expensive to duplicate or ii) there are effective substitutes for the service.[10] In GovChat, The Tribunal explained that a ‘scarce’ good or service is one that “cannot be easily duplicated without significant capital investment.”[11] Google’s main argument rested on the fact that there are numerous alternatives to Google Ads, all of which are viable and pose significant competitive constraint on Google Ads. However, The Tribunal in this case concluded that SEM services cannot be easily duplicated without significant capital investment and there is no feasible substitute, thus, rejecting Google’s argument and establishing the scarcity of Google Ads.

Alongside the above elements, it must be shown that it is economically feasible for Google Ads to supply Lottoland with Google Ads services. Lottoland seeks nothing more than to have access to Google Ads, as do their competitors. This equitable access request, and as is the opinion of The Tribunal, would prima facie not be impractical or unfeasible, the continued access to Lottoland’s rivals being a determining factor. The fact that Google has supplied Lottoland with Google Ads for some time before terminating access also suggests that it is not economically unviable to do so again.

Once the above has been established, harm is presumed, and the onus would typically shift to the respondent to show that these harmful effects are outweighed by pro-competitive gains. The Tribunal found that Google had no competition-related rationale for their actions and thus, there conduct prima facie distorts competition in the downstream market without any pro-competitive of efficiency justification presented or argued by Google.

Our assessment above, whilst done in the context of Section 8(1)(d)(ii) is also relevant for purposes of Section 8(1)(c). The Tribunal concluded that for reason stated under the section 8(1)(d)(ii) discussion, Google has also violated the provisions of section 8(1)(c). Google’s conduct has a prima facie anti-competitive effect, distorting competition by not allowing Lottoland to expand within their market relative to their rivals. The conduct was not found to be outweighed by technological, efficiency or pro-competitive gain and Google had little to no arguments in this regard.

Application of section 49C(2) of the Act

Lottoland submitted that Google’s refusal to allow it to use Google Ads resulted in Lottoland’s customer registration rate dropping significantly. Lottoland supplemented this with a monetary amount of the revenue that they had suffered as a result of Googles refusal to supply their Google Ads service, which, up until the interim relief was ordered, was ongoing. The Tribunal concluded that this is prima facie evidence that, due to Google’s conduct, Lottoland have suffered ‘serious or irreparable damage’, meeting one of the three stages of section 49C(2) of the Act. Additionally, the preamble of the Act states the importance to “provide for markets in which consumers have access to, and can freely select, the quality and variety of goods and services they desire”, with the overarching purpose of promoting and maintain competition in the Republic for the ultimate benefit of the consumer. It is clear that Google’s conduct has limited the choice for end-consumers.

With reference to ‘the balance of convenience’, The Tribunal weighed up the harm suffered by each party if they were to grant/refuse the application for interim relief, pending a decision on merits and stated that if there is clear and non-speculative evidence that suggest, and to what extent, a party will suffer harm if the relief was not given, then such relief should be given. It was stated in eMedia that “whilst there will inevitably be disputes of fact”, the Tribunal should still take a robust approach on the evidence before it, and that “if there is a prima facie right, even one open to some doubt and well-grounded apprehension of irreparable harm if the relief is not granted and ultimately granted at a final relief stage, then the balance of convenience favours the grant of the relief.”[12]

The Tribunal concluded that Lottoland had made out a prima facie case of restrictive practices and well as the irreparable harm it has suffered, therefore the balance of convenience, as shown, favours granting of interim relief. The requirements of section 49C of the Act have been satisfied and there is a case for interim relief.

Key takeaways

This case highlights critical elements that The Tribunal considers when assessing prohibited practices and granting interim relief under the Act. For a prohibited practice, The Tribunal focuses on determining market dominance, the exclusionary nature of the conduct, and whether the anti-competitive effects outweigh any pro-competitive justifications. The Tribunal’s approach to market dominance was particularly noteworthy. Instead of accepting Google’s broad definition of the market as the ‘advertising ecosystem,’ The Tribunal adopted a narrower definition focusing on the specific market for SEM services. This refined approach allowed for a more precise assessment of competition dynamics, underscoring Google’s overwhelming dominance in the SEM market.

The Tribunal further scrutinised Google’s refusal to supply Lottoland and its inconsistent application of internal policies, emphasising the scarcity of Google Ads as a service and its critical role for businesses reliant on digital advertising. Regarding interim relief, the Tribunal assesses whether there is prima facie evidence of a prohibited practice, serious or irreparable harm to the applicant, and whether the balance of convenience favours granting relief. Notably, the Tribunal’s robust and detailed approach to evaluating dominance and harm provides a roadmap for future cases, emphasizing the importance of context-specific market definitions and balancing the interests of all parties involved. This case underscores the Tribunal’s commitment to protecting competition and consumer choice while maintaining fairness in digital markets.

Joshua Eveleigh, Managing Associate at Primerio International says:

“At its crux, this matter dealt with the weighing up of the alleged risks and reputational harm to Google against the claimed foreclosure of Lottoland in the downstream market. Importantly, the Tribunal clarified that its mandate is to pronounce on how conduct may distort competition in a market.

Hence, if there is prima facie proof of anti-competitive conduct which cannot be outweighed on a balance of convenience, an application for interim relief must succeed. This is a particularly noteworthy judgement for firms operating within regulated environments. In effect, a dominant firm will be hard placed to cut-off services to a customer if, for example, it does not have clear evidence that the customer engaged in unlawful conduct.”

[1] Western Cape Gambling and Racing Act 4 of 1996.

[2] Competition Act 89 of 1998 (the “Act”), sec 49C.

[3] The Act, sec 49C(2).

[4] eMedia Investments (Pty) Ltd SA v MultiChoice (Pty) Ltd and Another, Case No. 201/CAC/Jun22 (“eMedia”), para 93.

[5] GovChat (Pty) Ltd and Hashtag Letstalk (Pty) Ltd v Facebook, Inc and Others, Case No. IR165Nov20 (“GovChat”), para 160.

[6] The Act, sec 8(1)(d)(ii) and 8(1)(c).

[7] The Act, sec 8(1)(d)(ii).

[8] The Act, sec 8(1)(c).

[9] Competition Tribunal of South Africa, Lottoland South Africa (Pty) Ltd v Google Ireland Limited and Google South Africa (Pty) Ltd, Case No: IR191Mar23 (Reasons for Decision and Order), para 78.1.

[10] eMedia, para 129.

[11] GovChat, para 113.

[12] eMedia, para 83 and 95.

AfCFTA: An Injection For Intra-African Trade Or Just Another Ambitious Idea?

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By Jannes van der Merwe

The African Continental Free Trade Area (“AfCFTA”) agreement, currently entered by 55 African countries, came into operation on 30 May 2019 and thereafter officially lodged in 2021. The purpose of the AfCFTA agreement is to create a single market for the continent, allowing free flow of goods and services across the continent and boost trading position of Africa in the global market[1].

While it is important to take into consideration that any change requires time, the question remains whether the AfCFTA agreement will in fact inject a positive change into Africa’s economy and promote intra-African trade.

The World bank predicts an economic growth for Africa, albeit it substantially low, indicating that the projected growth for Sub-Saharan Africa is 3% in 2024 and by 4% in 2025 to 2026, with East Africa expected to grow by 2.2% in 2024 and West Africa to grow by 3.9% in 2024.[2]

In 2023, the World bank further stated that research shows that the AfCFTA could lift 50 million people in Africa out of extreme poverty by 2035 and expand incomes by USD 571 billion[3].

Africa has been preparing itself for a growth in the Economy and the competition that comes with this in the broader African economy, by increasing regulatory infrastructure to oversee intra-African trade, with the likes of COMESA[4] and the recently functional ECOWAS[5], together with an increase of regulatory provision within African jurisdictions.  ‘

However, despite the preparation and readiness for a nuclear increase of intra-African trade, various factors have been hindering the progress. Africa has been riddled with uncertainties, related to political unrest, rising conflict and violence, climate shocks and high debt distress risks[6]. This leaves market leaders cautious to invest in Africa, and African entities to trade over and across these uncertain jurisdictions.

Article 4 of the AfCFTA agreement states that the specific objectives of the agreement is to progressively eliminate tariffs and non-tariff barriers; progressively liberalise trade in services; cooperate on investments, IP and competition policy; cooperate on all trade-related areas; cooperate on customs matters and the implementation of trade facilitation measures; establish a mechanism for the settlement of disputes concerning their rights and obligations; and to establish and maintain an institutional framework for the implementation and administration of AfCFTA.

South Africa has taken a positive step in this direction, as trade under the AfCFTA commenced during January 2024 where South African entities can export on a duty free, or reduced duty, for certain products. The South African Revenue Services has implemented the AfCFTA agreement and reduced the tariffs for these products[7]. However, the responsibility remains on African entities to promote the benefits of AfCFTA by increasing the intra-African trade and making full use of the economic gain that stems from the AfCFTA agreement.

While Africa is hopeful for the positive incorporation of the specific objectives of AfCFTA and the potential economic boost that AfCFTA can incorporate, this will only come with time, cooperation by the various African jurisdictions and proper implementation of the AfCFTA agreement.

[1]See: https://www.eac.int/trade/international-trade/trade-agreements/african-continental-free-trade-area-afcfta-agreement.   

[2]See: https://www.worldbank.org/en/region/afr/overview.

[3] See: https://blogs.worldbank.org/en/trade/africa-pursues-free-trade-amid-global-fragmentation.

[4] Common Market for Eastern and Southern Africa.

[5] Economic Community of West African States.

[6] See fn. 2 supra.

[7] The reduced tariffs can be found at https://www.sars.gov.za/legal-counsel/secondary-legislation/tariff-amendments/tariff-amendments-2024/

Real-Life Monopoly in Zimbabwe

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Zimbabwe’s Supreme Court hears competition matter between CTC & Innscor

By Jannes van der Merwe & Joshua Eveleigh 

On 3 October 2024, the Supreme Court of Zimbabwe (“SCZ”) delivered a judgment in the matter of the Competition Tariff Commission v. Ashram Investments (Private) Limited, and Others, setting aside the order of the Administrative Court (“Court a quo”), which had previously set aside the order of the Competition Tariff Commission (“CTC”) (the appellant before the SCZ).

The decision by the CTC dates back to 2014, when the CTC rejected a merger application where Ashram Investments would obtain control of Profeeds and Produtrade. The CTC rejected the merger on the grounds that Profeeds and Ashram, which is wholly owned by Innscor, had shares in National Foods and Irvines (collectively referred to as “the Respondents”). The proposed merger was likely to give Profeeds and National Foods a monopoly in the stock feeds market. Subsequently, in 2015, the Respondents agreed to merge the entities and obtained 49% of the shares of the target entities, in an attempt to circumvent the regulatory framework.

By doing so, the Respondents obtained an increasing stake in the stock feeds market, where the vertically integrated Respondents operated together. Inscorr, through its subsidiary Irvines[1] and National Foods[2], operates in the stock feed market, spanning their activities over eggs, day old chicks and stock feed manufacturing. Profeeds is also in the market of manufacturing stock feed and poultry feed. [3]

The Respondents were advised to notify the CTC about the implemented mergers, which they did in 2019. The CTC investigated the matter and informed the Respondents, in terms of Section 31(5) of the Competition Act [Chapter 14:28] (“the Act”), that Ashram should divest from Profeeds and that the CTC would impose a penalty for the Respondents’ contraventions of the Act. The Respondents were given an opportunity to make representations regarding the CTC’s broad terms order.

The CTC held that the merger was not in the public interest and was likely to create a monopoly within the market, and that the Respondents failed to notify the CTC of the proposed merger as the Respondents surpassed the notifiable monetary threshold; accordingly, the CTC prohibited the merger. The Respondents appealed to the Court a quo, which upheld the appeal.

The CTC appealed the decision of the Court a quo to the SCZ on the principal grounds that the Court a quo’s findings were grossly unreasonable or irrational, and that it failed to determine that the merger was contrary to the public interest, resulting in a monopoly.

The SCZ opined that the Court a quo erred in allowing the merger. Further, the SCZ held that in terms of the Act, competition must be in the interest of the public and that parties must adhere to the provisions set out in the Act.

The SCZ considered the evidence indicating that, despite the short-term benefits that the Respondents might rely on, the Court a quo failed to consider the long-term effects of the proposed merger and the consequences that arise from a monopolistic enterprise.

The SCZ held that:

“Monopolistic tendencies must be carefully assessed because they may initially appear favorable, but in the long run, they may, when the monopolists get to the point where the market has no other option but to buy their goods, turn around and control even the economy of a country by producing highly priced goods or substandard goods sold at high prices.”

The SCZ relied on the Akzo matter where the COMESA Competition Commission had prohibited a monopolistic merger in Zimbabwe, where it was found that the merger of two strong paint brands would result in there being no effective competition in the market. The SCZ stated that:

“In the present case the court a quo ought to have upheld the prohibition of the merger taking into consideration the merging of Profeeds and National Foods which resulted in the concentration of industrial power in the two biggest companies in the stock feed industry. There are striking similarities between this case and the Akzo case”

This judgment has set a new precedent in Zimbabwe, reaffirming the sound principles set out in the Act and the consequences for parties who wish to jump the gun to circumvent legislation and regulatory authorities.

[1] https://irvinesgroup.com/our-offering/

[2] https://nationalfoods.co.zw/stockfeeds/

[3] https://www.profeeds.co.zw/products

Trouble in Store: New challenges for Shein and Temu devotees in South Africa

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By Nicole Araujo 

It is no secret that international e-commerce giants Shein and Temu — the “ultra-cheap, ultra-fast retail giants” — have become increasingly popular among the South African population. The entry of these affordable and efficient platforms has certainly given Takealot – the established market leader – a run for its money, sparking reasonable concern for its survival and that of other local players in the market. 

The Commissioner of the South African Competition Commission (“Commission”), Doris Tshepe, stated that “all tools of government” are needed to level the playing field in the e-commerce sector considering the entry of international industry giants such as Amazon, Shein and Temu. This call for action comes 14 months after the Commission’s Online Intermediation Platforms Market Inquiry Final Report (“OIPMI”), released in July 2023which identified Takealot as the market leader and holding a dominant share of over 35% of online transactions.

The South African e-commerce sector is growing quickly, demanding stronger competition regulation and government policies. The OIPMI focused on ‘then’ current market dynamics. The arrival of international players (who were not in the Commission’s scope at the time of the inquiry), however, now arguably requires a shift in regulatory focus. 

In the government’s efforts to curb the large volume of low-value imports from Shein and Temu, the South African Revenue Service (“SARS”) introduced a new tax regulation in September 2024. SARS’ intervention was based on the fact that domestic clothing retailers are required to pay 45% on imported clothes whereas international e-commerce retailers, as an alleged way to avoid higher import rates, segment large orders into smaller amounts to ensure they remain under R500.   In this regard, items are now subject to VAT, in addition to the 20% flat rate, even where items are less than R500. 

At this particular juncture, it is too early to gauge the impact of the adjustments on sales, however the implemented tax adjustments intend to address competition concerns by increasing costs for low-value imports, making it less advantageous for consumers to consistently choose Shein and Temu’s cheaper imports over local options. Takealot has, however, demanded greater intervention to ensure further fairness within the South African market. Takealot, therefore, proposes that international e-commerce players such as Shein and Temu set up local offices and distribution centres in South Africa. Implementing these proposals would require Shein and Temu to invest in local infrastructure, thereby leading to job creation and increased tax contributions in South Africa. This would ultimately establish equity in the market, aligning their operational costs and processes with those of local online retailers and reducing the cost advantage these companies currently enjoy by selling and shipping directly from abroad. Furthermore, Takealot has advocated for their international industry partners to collaborate with local businesses and open local bank accounts to ensure fair tax contributions. 

With the shift in the Commission’s focus from market dynamics to international players, South African fans of the two industry giants can expect further tax implications and regulatory changes which may impact their online purchases and decision-making.Additionally, the rapid developments in the industry and the Commission’s evolving approach to market assessments raise questions about the effectiveness of market inquiries and their findings.

In light of the Commissioner’s recent comments, it is expected that the Commission will keep a watchful eye on the industry and its international participants, particularly taking into account local player’s concerns. 

Ultimately, the Commission will aim to foster a more equitable playing field, ensuring the sustainability and competitiveness of South Africa’s local industry in an increasingly globalised market. For local retailers, there may be a positive shift in foreign-owned business tax contributions, while consumers could see a positive impact on the overall economy.

Joshua Eveleigh, an associate competition law attorney at Primerio International, notes:

“the explosive growth of Shein and Temu within South Africa also demonstrates an important concern associated with the Commission’s market inquiry regime. Specifically, the Commission looks to impose binding remedies on firms within dynamic markets. This creates an inherent risk that by the time the Commission does impose remedies on a firm, the market has already changed and the remedy becomes ineffective.”

In any event, it is clear that certain measures will be taken to maintain effective competition in South Africa. In doing so, however, the Commission should be cautious in not becoming a price or sector regulator.

New Book Alert: “Regulating for Rivalry: The Development of Competition Regimes in Africa”

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Book Launch Monday: CCRED’s latest covers AAT’s bread and butter, namely the rise of regulatory antitrust frameworks across the African continent.

The Centre for Competition, Regulation and Economic Development (“CCRED”) has announced the launch of its latest publication: “Regulating for Rivalry: The Development of Competition Regimes in Africa”. Co-edited by Reena das Nair, Simon Roberts, and Jonathan Klaaren, this book looks to be a comprehensive compilation of cutting-edge research and analyses, bringing together the key papers presented at previous ACER Week (Annual Competition and Economic Regulation) conferences. It also includes contributions from CCRED’s ongoing work, reflecting a rich exchange of ideas aimed at fostering competitive markets and effective regulation across the African continent. 

One of the notable contributions in the book is a paper written by Primerio’s John Oxenham, Michael-James Currie, and Joshua Eveleigh, titled “Buyer Power in Emerging Markets: Assessing the Effectiveness of Regulatory Enforcement Developments in South Africa and Kenya”. This paper delves into the complex dynamics of buyer power, particularly in emerging markets, and evaluates the impact of recent regulatory enforcement efforts in South Africa and Kenya. Their research provides critical insights into the challenges and successes of regulatory buyer power within these key African economies, offering valuable lessons for policymakers and regulators across the continent. 

“Regulating for Rivalry” will be available in both digital and print formats towards the end of 2024. The book is expected to be an essential resource for academics, regulators, legal practitioners, and policymakers engaged in the development and enforcement of competition law in Africa. It showcases the growing maturity and innovation of competition regimes across the continent, highlighting the critical role of effective regulation in promoting economic development and inclusive growth.