Addressing the media and other stakeholders at the briefing, the chairperson of the inquiry, former Chief Justice Sandile Ngcobo, provided a brief explanation of what a market inquiry is, provided an overview of its possible outcomes, the Competition Commission and panel’s approach, the use of information during the inquiry and the management of confidential information.
Furthermore, the former Chief Justice elaborated on the important dates and timelines of the inquiry, the statement of issues, theories of harm and that stakeholders ought to provide accurate information in order to assist the panel.
The important dates are:
Date
Event
31 May
Statement of Issues and Administrative Guidelines issues for public comment
30 June
Deadline for submission of public comment on Statement of Issues and Administrative Guidelines
1 July – 31 July
Incorporation of comments on Statement of Issues and Administrative Guidelines
01 August
Publication of final Statement of Issues and Administrative Guidelines
01 August
Call for submissions on subject matter of the inquiry
A continuation in our AAT multi-part series on innovation & antitrust as a thematic collection focusing on the concept of innovation markets and how competition and IP laws are able to address the, by definition, novel issues that arise.
By Sofia Ranchordás
In previous posts on the topic of Antitrust & Innovation, we discussed the definition of innovation, its relative character, and the role of regulation in its regulation and advancement, notably in developing countries. In Africa, the lack of a solid regulatory framework may, on the one hand, discourage foreign direct investment, and on the other, fail to stimulate local innovators to invent. However, there are more challenges regarding the advancement of innovation that are impeding a more effective ‘regulation of innovation’. In this short article, attention is paid to the regulatory borders that innovation seems to be crossing at the moment. The next installment shall be focused on two regulatory instruments that might facilitate the regulation of innovation in the dark, not only in Africa but also in other countries.
Democratizing access to finance
The regulation of innovation should start out with understanding the innovation process and its characteristics, notably its uncertain character; the need for diversity, sector-specificity, the complex access to finance, openness to changes and flexibility. An innovation-friendly environment does not exist in most African countries. The lack of flexible rules and the often somewhat inflexible interpretation of existing legal concepts are not helping either. While governments praise innovation as the highest salvation in times of crisis, the list of regulatory obstacles to innovation does not appear to be tackled. This is the case of the poor availability of finance for innovators, insufficient cooperation between public and private parties, or excessive regulation and outdated regulations and procedures.
Think about ‘kickstarter’: while there are already numerous crowdfunding projects supporting startups and non-profit projects in Africa, it is not easy for an African innovator to create this type of crowdfunding accounts from his/her own country and attract anonymous angels. In the case of ‘kickstarter’—one of the platforms with more visibility—this might even be limited to a number of countries (e.g. United States, New Zealand, Australia…) and be subject to specific requirements (e.g. permanent residence).
But what if you do not have a broad network and cannot contact someone reliable in one of those countries? I was recently contacted by a designer from Portugal who had developed an innovative device, but could not create a kickstarter account because he lives in one of the countries where you are not allowed to join this form of crowdfunding (www.dapowa.com). The same would apply to an innovator from an African country, only this one could probably be in a position where he would not even know anyone who would be willing to share his story with you.
There are multiple platforms of crowdfunding that are available worldwide, but the point that I would like to make is that regulators should start paying more attention to this form of democratization of finance. There are obviously risks and controversies behind crowdfunding, but, in a time when we need so much innovation, isn’t it about time we stop adopting an all-or-nothing perspective and rethink the regulatory framework of access to finance? Laissez-faire is not an option, certainly not in the case of finance. Shouldn’t developing countries have more flexible structures allowing their innovators—with properly developed business plans but with a limited social network—to improve access to finance? Funding projects should not necessarily be seen as a mere form of charity. It is a form of philanthropy that should be regarded as a stepping stone for the development of African economies and a complement to foreign direct investment.
Crowdfunding is simply one of the innovations that is putting regulation to the test and making us question the interpretation of existing legal concepts and institutions. Other examples—still less common in Africa—are present in the case of ‘share economy’ (e.g., Uber, Lyft, Airbnb). While ‘share economy’ and crowdfunding are innovative and valuable ideas, they bring along a number of serious risks for consumers (e.g. how many Airbnb houses comply with fire safety regulations? Will the money invested be used for the due purposes?). A ‘laissez faire’ approach might not be enough to conquer the trust of risk-averse consumers, but a stringent regulation of these new forms of democratization of access to finance and facilities will not either.
In this short article, we pose mere questions and alert for the need to think about regulatory solutions for the described democratization. Self-regulation, soft law and experimental regulations might be options to explore. The first step is however to start thinking about this topic, questioning the need for more transparency, and the need for rules. Crowdfunding and share economy will work while they are based on the bona fides of users. However, one incident might be enough to put an end to it all. Rules are created for a purpose and today’s challenge is to make sure that, on the one hand, ‘too much [law] will not kill [innovation]’, ‘if regulators can’ t make up their minds’ and, on the other, ‘too little law’ does not ‘leave [innovation] behind’.
Philips’ CEO Frans van Houten recognizes untapped potential, invests in Africa
In February, AAT launched its multi-part series on innovation & antitrust as a thematic collection focusing on the concept of innovation markets and how competition and IP laws are able to address the, by definition, novel issues that arise. Recently, and timely so, Philips has joined this debate.
Philips & the future of African innovation: From “things” to “ideas”
For one, Frans van Houten, its President and CEO, has been quoted as saying: “Innovation is our lifeblood and will be the main driver of profitable growth going forward. … I intend to drive innovation with more intensity to help us win new customers.”
Notably, Philips changed its official company slogan from “We make things better” to “We create better ideas.”
Mr. van Houten (source: Philips)
Even more pertinent, Mr. van Houten not only recognizes the crucial forward-looking importance of innovation. Unlike many Western corporate leaders, he positively links it with the economic growth prospects of Africa. In an insightful piece entitled “How Africa’s innovation will change the world” (published on the Davos World Economic Forum blog), Mr. van Houten discusses the promises, challenges, and realities of African innovation and resulting economic growth.
The article highlights the intuitive, yet elusive, insight that challenges become opportunities when looked at with an inventive spirit. It also addresses the importance of multi-disciplinary approaches (such as the one at the foundation of our #AntitrustInnovation series, combining law, economics, and business innovation) and that of partnerships:
Seven years ago, millions of Kenyans were struggling to access basic financial services such as a bank account; they were unable to transfer money or receive microcredit. Then, a locally developed mobile payment system called M-Pesa [see AAT coverage here; — Ed.] radically changed everything. Today, more than two-thirds of Kenya’s population uses M-Pesa to make and receive payments and an estimated 43% of the country’s GDP flows through the system. This is transforming life in the country, increasing income in rural households and spawning a range of start-ups.
This speedy adoption of mobile payments captures the enterprising spirit of African innovation. It reflects the resourcefulness with which people in Africa find local solutions to local issues. It also shows how Africa’s challenges are opportunities in disguise and how the continent can bypass development stages without paying for their replacement. Mobile phones, for example, were rapidly adopted in Africa because of the lack of fixed telecom infrastructure. And solar panels are being adopted faster than in other parts of the world, because kerosene is so expensive that the payback time for investments in solar power is months rather than years.
Healthcare is another exciting area. According to a report from the World Economic Forum, Africa faces 28% of the global disease burden with only 3% of the world’s healthcare workforce. In response, Africa is adopting new operating models and technologies. By training health extension workers to focus on education, family planning and sanitation, Ethiopia achieved a 32% drop in child mortality and 38% drop in maternal mortality. In Kenya, e-learning has taught 12,000 nurses how to treat major diseases such as HIV and malaria, compared to the 100 nurses a year that can be taught in a classroom.
Africa is also embracing new business models that tap into the vitality of the country’s communities. Philips, for example, teamed up with Inyenyeri, a Rwandan NGO, to give families access to an innovative cookstove. Crucially, the cookstove is given away for free and families pay for the stove by harvesting twigs, leaves and grass. This biomass is compressed into fuel pellets, half of which are returned to the family for personal use and half of which are sold by the NGO. The cookstove is produced in Africa, highly energy efficient and, because it is smoke free, significantly healthier.
This example also shows the power of partnerships, without which many African innovations would not come to fruition. Solar-powered light centres, for example, increase the social activity and productivity of communities by generating light after sundown. These communities, however, are often unable to invest in a light centre, so this technology is rolled out through NGOs and governments. Sometimes these light centres are used to power medical equipment such as an ultrasound, or refrigerators that store vaccines. This type of cooperation ensures that innovation generates both financial and social value.
The complexity of Africa’s challenges also requires a multidisciplinary approach to innovation. Kenya, for example, is investing in systems that encourage open innovation. This sees local universities and small and medium enterprises join forces with NGOs, governmental organizations and foreign multinationals such as IBM and Philips, which have set up regional research and innovation centres in Nairobi. Nairobi is also home to iHub, a booming community of local entrepreneurs, investors and some of the world’s leading technology firms.
For innovation to really succeed in Africa, other factors need to be addressed, too. There is a lack of prototyping equipment and workshops, so local innovators depend on Europe or China, making the process costly and cumbersome. And while there are good patent laws in place, there are still too many counterfeit versions of successful products. Also, international firms should source locally and work with local distributors, whenever possible. And governments should focus their development money on stimulating entrepreneurship and innovation.
While in Africa millions of people still live on less than $2.50 a day, the continent looks set to have a brighter future thanks to local solutions for finance, healthcare and energy that could become globally relevant. M-Pesa, for example, has already been rolled out in other African countries, India, Afghanistan and Eastern Europe. Perhaps sooner than we think, African innovations will help the rest of the world create lasting social and economic value.
More than just writing op-ed pieces, Philips’ leadership has put its money where it matters: On March 20, 2014, the company (with 23-plus billion Euros in annual revenue) announced that it was establishing a “Research & Innovation Hub” in Nairobi, Kenya. The full Philips statement says:
The Philips Africa Innovation Hub in Kenya will be the center for developing innovations “in Africa-for Africa” in the areas of healthcare, lighting and healthy living
Hub underlines Philips’ commitment to invest in Africa and provide Africa-relevant innovations to address key challenges facing the continent
Nairobi, Kenya – Royal Philips (NYSE: PHG, AEX: PHIA) today announced the establishment of its Africa Innovation Hub in Nairobi, Kenya, which underlines the company’s commitment to invest in Africa. The Philips Africa Innovation Hub will work both on the creation of new inventions, as well as bringing these inventions to the market.
The Philips Africa Innovation Hub will do application-focused scientific and user studies to address key challenges like improving access to lighting and affordable healthcare as well as developing innovations to meet the aspirational needs of the rising middle class in Africa.
The Philips Africa Innovation Hub will be located at the Philips East African Headquarters in Nairobi, where African talents and international researchers will operate on the concept of “open innovation” and will work in close collaboration with the R&D ecosystem of Kenya and Africa. Philips is in discussions with local organizations and Universities on R&D collaborations to co-create meaningful solutions for Africa.
“We welcome the establishment of Philips’ Innovation Hub in Kenya; Philips is a globally recognized innovation powerhouse and their selection of Nairobi as the site to establish their African Innovation hub is a testament to the Kenyan government’s commitment to nurture the drive for research and innovation in the region”, says, Hon’ble Adan Mohammed, Cabinet Secretary for Industrialization. “We lend our full support to the investment being made by Philips and look forward to the outcomes of their Africa-specific research and projects that can contribute to transforming society, business and government across the continent”.
JJ van Dongen, Senior Vice President & CEO Philips Africa states: “Philips is passionate to invent, apply technology and partner to help people succeed. Our ambition is to create impactful innovations that matter to people and address the key challenges that confront society. With Kenya as a leader in the continent in science and entrepreneurship as well as a hub of collaboration on technology and innovation, Nairobi, is the ideal location to establish Philips’ African research presence. We want to tap into the city’s vibrant R&D eco-system and contribute to the process of co-creating new solutions, new business models and meaningful partnerships to provide innovations that make an impact.” Enhancing people’s lives in Africa though meaningful innovations
Some innovations that Philips was already working on have now become part of the Innovation Hub, hence, the Philips Africa Innovation Hub will kick-off with ventures that are under development as well as in the pilot phase; these include:
Respiratory rate Monitor to support pneumonia diagnosis: Pneumonia is the leading cause of death among children under the age of five, resulting in 1.1 million deaths worldwide annually¹. Of these, 99% of deaths occur in developing countries in low-resource settings, which typically entail rural areas with very limited or poor healthcare facilities or with low-skilled health workers. The current diagnostic tools in such settings are not easy to use, can easily distract the workers from an accurate conclusion, and thus lead to a poor diagnosis.
The Innovation hub is working on the development and clinical testing of a robust and affordable Automated Respiratory Rate Monitor that aims to support the diagnosis of pneumonia among infants and children, using smart sensing technology on the body which is intended to be more accurate and reliable compared to manual processes being currently observed. This device will be specially designed for use by community health workers and nurses in rural areas. In Kenya, discussions are on with the Kenya Medical Research Institute (KEMRI) to further develop this project and co-create an effective solution tailored to circumstances in rural Africa.
Community care services: The development and testing of a work-flow innovation designed to reduce the number of avoidable maternal and child deaths. The purpose of the workflow is to enable remote area health centers to diagnose, triage, treat, stabilize and (prepare for) transport expectant mothers that come in for a check-up and treatment.
Smokeless cook stove: Philips has designed and is manufacturing this innovative stove to improve the lives of those who rely on wood or biomass for their daily cooking. These specially designed stoves are extremely efficient and significantly reduce the use of wood as fuel. The cook stove can reduce smoke and carbon monoxide emissions by more than 90% compared to an open fire² thus reducing the health risks of indoor cooking. The contribution of the innovation hub is to create new go-to-market models for these stoves.
Consumer solar solutions: Today an estimated 560 million Africans live without electricity; Philips is committed to improving access to lighting in Africa, for the majority of the population that lives in off-grid communities. The Innovation hub is designing and developing new consumer products using the combination of solar power and energy efficient LED technology. New go-to-market models are also being established to ensure these solutions become accessible to people that would not be able to afford them otherwise.
The Philips Africa Innovation Hub while headquartered in Kenya, will be responsible for pan-African research and projects and will have operations across Africa, linked to the Philips regional offices across the continent; the hub will be headed by Dr. Maarten van Herpen and will work in close collaboration with the Philips research labs in Bangalore, Shanghai and Eindhoven.
¹ Source : Unicef www.unicef.org/media/media_70890.html
² Reference source: Water boiling test version 4.2.2 done at accredited stove laboratory, Aprovecho Research Center, Oregon, USA.
The newly (permanently) appointed Competition Commissioner, Tembinkosi Bonakele, has referred to a “phased” implementation of the 2009 Competition Amendment Act. The legislation technically criminalised hard-core antitrust offences such as bid-rigging or price-fixing cartels. However, it has not yet been implemented or effectively signed into law.
According to a MoneyWeb/ZA report, both he and his boss, Economic Development Minister Ebrahim Patel, had discussions on how and when to implement “to ensure that the necessary institutional capacity is available to apply the amendments.” The initially effective provisions (relating to the SACC’s market-inquiry powers) went into effect last year, while the criminalisation provisions remain unimplemented.
In a somewhat remarkable and prudent self-assessment, the minister and SACC have now admitted that the Commission currently lacks “the institutional capacity needed to comply with the higher burden of proof in criminal cases,” according to the report.
One notable aspect of potential discord lies in not only in the different standard of proof in civil vs. criminal matters (“more probable than not” vs. “beyond a reasonable doubt”), but perhaps more importantly can be found on the procedural side, preventing rapid implementation of the law: There has been historic friction between various elements of the RSA’s police forces and (special) prosecutorial services, and the power to prosecute crimes notably remains within the hands of the National Prosecuting Authority, supported in its investigations by the South African Police Service.
Historical and Legislative Background – and a bit of Advice
Starting in the spring and summer of 2008, the rumoured legislative clamp-down on corrupt & anti-competitive business practices by the government made the RSA business papers’ headlines.
During a presentation I gave at a Johannesburg conference in September that year (“Criminalising Competition Law: A New Era of ‘Antitrust with Teeth’ in South Africa? Lessons Learned from the U.S. Perspective“), I quoted a few highlights among them, asking somewhat rhetorically whether these were the words of fearmongers or oracles?
“Competition Bill to Pave Way for Criminal Liability”
“Tough on directors”
“Criminalisation of directors by far most controversial”
“Bosses Must Pay Fines Themselves”
“New leniency regime to turn up heat on cartels”
“New era in the application of competition policy in SA”
“Likely to give rise to constitutional challenges”
“New Bill On Cartels is a Step Too Far”
“Fork out huge sums or face jail time if found guilty”
“Disqualification from directorships … very career limiting”
I also quoted international precedent-setting institutions and enforcers’ recommendations, all of which tended towards the positive effect of criminal antitrust penalties:
OECD, 3rd Hard-Core Cartel Report (2005):
Recommends that governments consider the introduction and imposition of criminal antitrust sanctions against individuals to enhance deterrence and incentives to cooperate through leniency programmes.
U.S. Department of Justice, Tom Barnett (2008):
“Jail time creates the most effective, necessary deterrent.”
“[N]othing in our enforcement arsenal has as great a deterrent as the threat of substantial jail time in a United States prison, either as a result of a criminal trial or a guilty plea.”
While the presentation contained a lot more detail, the key recommendations that I summarised would seem to continue to hold true today, and may serve as guide-posts for Commissioner Bonakele and the EDD ministry:
Cornerstones of a successful criminal antitrust regime
Crystal-clear demarcation of criminal vs. civil conduct
Highly effective leniency policy also applies to individuals
Standard of proof must be met beyond a reasonable doubt
No blanket liability for negligent directors – only actors liable
Plea bargaining to be used as an effective tool to reduce sentence
Clear pronouncements by enforcement agency to help counsel predict outcomes
Demarcation of criminal vs civil antitrust conduct in U.S.
The South African mobile operator landscape can be described as a microcosmic reflection of the larger African experience: Mobile technology is exponentially more developed than what an outside observer would otherwise predict, based on distinct economic predictors. One of the key reasons for this highly-developed sub-Saharan mobile world is the concomitant lack of hard-wired infrastructure, necessitating that mobile make up for the copper-wire slack. Other reasons include the hot topic of mobile banking (again: lack of brick-and-mortar banks necessitates mobile banking alternatives, such as M-Pesa’s services, on which AAT has reported extensively).
South Africa, as the continent’s largest (or second-largest, depending on whether you trust the revised Nigerian GDP numbers) economy, is of course at the forefront of the African mobile/internet frontier.
Now, the large South African operator Vodacom has rejoined the antitrust headlines simultaneously in two ways:
Second, Vodacom has confirmed the prior reports of its competitor Cell-C’s October 2013 complaint, accusing Vodacom of discriminatory pricing, which is now being taken rather seriously by the SACC, according to TechCentral’s reporting. On that front, Vodacom’s spokesman Richard Boorman is quoted as using classic competition-law argumentation as a clever shield:
“Cell C is apparently arguing for an increase in the price that Vodacom customers pay to call other Vodacom customers. It’s hard to argue that increasing prices would be a benefit to consumers.”
Further to the SENS announcement on 30 September 2013, Vodacom has reached an agreement with the shareholders of Neotel Proprietary Limited (“Neotel” or the “Company”) to acquire 100% of the issued share capital in, and shareholder loans against, Neotel for a total cash consideration equivalent to an enterprise value of R7.0bn.
Principal benefits of the transaction
Leading fixed telecommunications network
Neotel, which started operations in 2007, is the second largest provider of fixed telecommunications services for both businesses (commonly referred to as enterprise services) and consumers in South Africa. The company has access to over 15,000 km of fibre-optic cable, including 8,000 km of metro fibre in Johannesburg, Cape Town and Durban. Neotel also has access to 2 x 12 MHz of 1800 MHz spectrum, 2 x 5 MHz of 800 MHz spectrum and 2 x 28 MHz of 3.5 GHz spectrum.
Acceleration of Vodacom’s unified communications strategy
Neotel will become a subsidiary of Vodacom South Africa and the combination with Vodacom’s South African fixed enterprise business will create a national service provider with annual revenues of more than R5bn.
Vodacom sees a significant opportunity to accelerate growth in unified communications products and services by integrating its extensive distribution and marketing capabilities with Neotel’s fixed network and product capabilities. The combined entity will be able to offer an expanded and enhanced range of converged services (e.g. hosted PBX, OneNet) to enterprise customers. Vodacom estimates revenue synergies with a total net present value of approximately R0.9bn after integration costs.
Enhancement of next generation network capabilities in South Africa
The combination of Neotel’s and Vodacom’s networks will improve overall network availability and reduce the cost to serve customers. The combined business will also be ideally positioned to accelerate broadband connectivity in line with the South African Government’s broadband targets, enabling Vodacom to take a leading position in the fibre to the home and fibre to the enterprise segments of the market.
The combined entity will also be able to use the radio spectrum currently assigned to Neotel more effectively. This spectrum will enable Vodacom to accelerate the roll-out of LTE (commonly referred to as 4G) services, providing high speed, high quality wireless connectivity to a greater proportion of the South African population.
In-market consolidation with substantial cost and capex savings
Vodacom expects to achieve substantial cost and capex synergies with an annual run-rate of approximately R300m before integration costs in the full fifth year post completion, equivalent to a net present value of approximately R1.5bn after integration costs. These savings will primarily be derived from the joint utilisation of Neotel’s extensive fibre network and the elimination of overlapping elements, joint procurement and the combination of overlapping administrative functions. The transaction values Neotel at a multiple of 8.8x annualised 1H2014 OpFCF, adjusted for cost and capex synergies.
Neotel management and employees
Vodacom looks forward to welcoming Neotel’s employees. Their fixed and enterprise skills will enable the combined entity to deliver enhanced and extended service offers.
Additional information on the transaction
Vodacom will fund the acquisition through available cash resources and existing credit facilities.
The transaction remains subject to the fulfilment of a number of conditions precedent including applicable regulatory approvals and is expected to close before the end of the financial year.
Speaking about the transaction, Vodacom Group CEO Shameel Joosub said:
“Through the combination of these two businesses, the provision of a wider range of business services and much needed consumer services like fibre-to-the-business and fibre-to-the-home becomes a concrete reality – it will be good for the consumer, good for business and good for the country. And for our investors, the transaction fits perfectly within the priorities of Vodacom’s growth strategy focused on continuing our investment in data and our Enterprise business.”
This morning, economic-development minister Ebrahim Patel announced the retention of the 38 year-old Mr. Bonakele as the top antitrust enforcer in the South African republic, making permanent for a five-year term the interim appointment of the man who said the following in an interview regarding the independence of the competition authorities in South Africa:
“While competition authorities should not be beholden to the government neither can they be loose cannons who claim independence without accountability.”
In prolonging Mr. Bonakele’s interim appointment for another five years, Minister Patel thus assured that the important position of Competition Commissioner did not go to a “loose cannon”…
Legislative basis
The appointment is made pursuant to Part A, Art. 22 of the South African Competition Act of 1999, as amended, which also provides (in sub section 4) for the flexible salary and benefits determination to be made by the minister himself: “The Minister must, in consultation with the Minister of Finance, determine the Commissioner’s remuneration, allowances, benefits, and other terms and conditions of employment”
Minister PatelCommissioner Bonakele
Public announcement and emphasis on enforcement
In the duo’s official tweets announcing the decision (see graphic extract below), Patel congratulated Mr. Bonakele, reaffirming his and the SA cabinet’s support of the “eminently suitable” candidate, and emphasizing the importance of (1) the Competition Commission‘s ongoing and hotly debated private health-care inquiry as well as (2) the “social-justice” elements of merger conditions imposed by the SACC on mergers in the past 5 years, purportedly “protecting” 4,900 jobs.
The agency had come under considerable flak in the past year due to its high staff and executive-level turnover and a work environment that has been described as “toxic” by insiders.
The official release by the Ministry of Economic Development quotes Patel as follows:
“I am pleased to have someone of Bonakele’s calibre at the helm of the Competition Commission. He is taking leadership of the Commission at a time when the South African economy needs to become more competitive and create many more decent work opportunities by combatting market abuse such as cartels and pervasive monopolies and ensure competitive pricing of products. In particular, the key jobs drivers identified in our policy frameworks require coordinated and concerted efforts improve economic performance and development outcomes.
“The Competition Commission has been one of a number of successful economic agencies and regulators that are together beginning to transform the South African economy. Mr Bonakele possesses the skills and experience to build on the successes of the Competition Commission.”
The agency’s official “Structure” page had not yet been updated as of the day of the announcement, listing Mr. Bonakele as “Acting” head and still showing the long-departed Ms. Makhaya as a Commission official.
Official S.A. government tweets announcing SACC personnel decision of permanent Bonakele appointment
Site down – 5 “comfort letters in 5 months – Guidelines revision by June
In an almost farcical repetition of its information-technology woes, the COMESA Competition Commission’s web site (http://www.comesacompetition.org/) is off-line, yet again, after having been successfully hacked multiple times. Whether the latest outage is due to a similar attack or simply (and hopefully) due to its webmaster’s shoring up the competition enforcer’s IT security measures remains to be seen. (We have not yet heard back from the agency’s leadership on our request for information on the online data safety of parties’ submissions.)
In more substantive news, IFLR reports that the CCC has issued five so-called “Comfort Letters” since December 2013, exempting otherwise notifiable transactions from the duty to file (as well as the concomitant payment of the (high) filing fees), where the actual nexus to the COMESA region was negligible or non-existent. This may help explain some of the lackluster filing statistics on which we reported previously.
The report also quotes the CCC’s head of mergers, Mr. Willard Mwemba, as saying that the revision of the Competition Guidelines should be finalised by the end of June 2014.
A report by the South African Citizen discusses the language barriers still present in the Republic today.
The piece, entitled “Tribunal struggles with Afrikaans” by Antoinette Slabbert, notes that the RSA Competition Tribunal has decided to have testimony given in Afrikaans transcribed, together with its English translation, “to ensure the court properly captures what a witness was trying to say.”
The underlying case is the Competition Commission’s case against Media24, alleging an abuse of dominance by squeezing its competitor, Gold-Net News, out of the market for advertising in community newspapers in the Free State Gold Fields between 2004 and 2009.
The Citizen reports:
Tribunal chairperson Norman Manoim asked whether Van Eck would mind testifying in English, since he was concerned about the quality of the translation of her responses the previous day. Media24′s legal team objected, saying Van Eck was already assisting the tribunal by taking questions in English.
The legal representative of the commission pointed out that Van Eck’s English was good. Both legal teams shared Manoim’s concern about the English interpretations. Van Eck said she prefered testifying in her home language to better express herself.
Earlier, Wian Bonthuyzen, Van Eck’s former manager and a key witness, switched from Afrikaans to broken English during his testimony, after another interpreter failed to properly convey his responses to the tribunal.
First-ever FT African Investment Summit to be held in London
In October, the Financial Times will be hosting a timely “FT-Live” London symposium on investment in Africa. The Oct. 6th FT Africa Summit (agenda) is expected to draw a global audience from various industry sectors, limited to 150 attendees.
Whether or not the conference will spark a wave of M&A activity (and hence antitrust scrutiny) on the continent remains to be seen. For now, the paper’s event PR proclaims optimistically:
The continent’s economic growth is the second fastest in the world, underpinned by a virtuous cycle of improved governance, Chinese-led investments in infrastructure, high commodities prices, and the growth of a nascent, even if fragile, middle class. Yet, risks abound, from rising inequality to the potential of setbacks in governance.
The inaugural FT Africa Summit will provide a global platform to hear and discuss the views of finance ministers, investors and businesses leaders from around the region. Altogether the first Summit and the special report will be a unique opportunity to gain insights into one of the world’s most exciting markets.
Today’s edition also reports, fittingly, that large-scale investors (such as Atlas Mara’s head and former Barclays CEO Bob Diamond) are looking increasingly to the African continent for high-growth financial investment opportunities. Diamond is reported to have raised $1/3 billion for his “African war chest” of Atlas Mara to invest in African bank acquisitions, and is said to plan another $400m round of fund-raising later this year.
Bob Diamond
As the FT points out, the growth potential for financial services in sub-Saharan Africa is theoretically immense, as the majority of the region’s 1-billion-plus population does not yet have bank accounts. However — and the FT omits this crucial fact — as we reported elsewhere, the dearth of access to brick-and-mortar banks in Africa has led to the pioneering use of GSM mobile technology, such as M-Pesa, for retail financial transactions at a record-setting adoption rate in Africa; see our M-Pesa reporting and other stories.
According to the report, CAK Director General Francis Wang’ombe Kariuki said that “investigations are already being conducted in [the] transport, insurance, shipping, milling, banking, cement, sugar, health care and tea” sectors, pursuant to purported consumer complaints.
African Antitrust & Competition Law 