Minister’s grip over antitrust authorities further strengthened

South Africa takes on more price regulation in planned amendment to Competition Act

BDLive’s Carol Paton reports that Economic Development Minister Ebrahim Patel – with whose involvement in competition policy AAT readers are well aware from reading our site – has further strengthened his grip on the country’s competition authorities.  He is said to be drafting amendments to the Competition Act in relation to dominant firms’ “excessive pricing” practices.  The amendments are to be introduced to Parliament in 2015.
The article quotes Mr. Patel’s Sunday interview, in which he said:

“The past five years indicated that we are serious about dealing with cartels. But the challenge that we have had is that the economy still has many formal monopolies or upstream producers who are able to impose high prices on downstream manufacturers. We have got to move with greater urgency to tackle the structural challenges.  Giving a dominant player the right to set its own price results is an unfairness. In the Sasol example, part of the remedy is for the firm to work with the competition authorities to develop a soft version of price regulation.”

Price regulation is an absolute taboo in U.S. antitrust law, and even under more interventionist and public-policy influenced EU standards, explicit price regulation is not practiced in the bloc’s 28 member states.
Sasol, the giant South African oil company, is said to be aware of the government’s plans, saying: “setting prices, in particular of traded goods, invariably leads to unsatisfactory outcomes.  South Africa’s joining the World Trade Organisation in 1995 took us forward to opening the economy to compete internationally, with prices being brought in line with international prices. Regulating prices to below gate price, is unlikely to lead to building long-term competitive industries.”

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COMESA criticised for inflated merger notification fees

COMESA Competition Commission logo

As BDLive’s Amanda Visser reports online, the COMESA Competition Commission (“CCC”) has come under fire for inflating its deal-notification filing fees.

The Cipla / Cipla Medpro SA deal is reported in the article to have come in at 0.5% of turnover and cost the merging firms R4.5m in filing fees.

The online journal also notes that appeals to COMESA’s appellate body in Sudan (the COMESA Court of Justice) are unlikely in the case of high filing fees.  Notably, the CCC is prepared to listen to its stakeholders, says Willard Mwemba, head of mergers at the CCC: “The commission has heard the concerns and is engaging a consultant to come up with reduced notification fees.”