The 2017 Concurrences Antitrust Writing Awards received nominations for more than 600 papers. The Awards Editorial Committee has selected:
66 academic articles
91 business articles
21 soft laws
Readers can vote online until February 1 for their favorite papers on the Awards website.
Free access to all these articles is temporarily being provided on the Awards website.
Results will be announced by former FTC Commissioner and renowned antitrust scholar Bill Kovacic and the Board members at the Gala Dinner on March 28, in Washington, D.C., the night before the ABA Spring Meeting.
Competition Law conference provides most in-depth look at the state of Cameroonian antitrust law
Event organised by Dr. Patricia Kipiani and Prof. Tchapga of Primerio & CEMAC, the Cameroon school of business and its competition law section
What follows is an article that appeared in French in the Le Droit journal, written by Stéphane Ngoh, reprinted here with permission. An English translation is below. An interview with Dr. Kipiani related to the conference can be found here. In it, she discusses the planned creation of a “Competition Observatory” for the country.
Le cabinet Primerio International a organisé un séminaire de sensibilisation aux enjeux du droit et de la politique de la concurrence au Cameroun et dans l’espace de la CEMAC. L’évènement lancé par le ministre du Commerce, M. Luc Magloire Mbarga Atangana s’est déroulé le 7 juillet 2016 au siège du GICAM à Douala.
Présenter la concurrence comme « un bien commun » à la collectivité et « renforcer la pédagogie de la concurrence dans ses dimensions juridiques et politiques» tels peuvent être les maitres mots du premier « rendez-vous de la concurrence» au Cameroun et en CEMAC impulsé par le cabinet d’expertise Primerio International et placé sous le thème «Du droit et de la politique de la concurrence au Cameroun et dans l’espace CEMAC ». Comme pour en souligner toute l’importance, le ministre du Commerce du Cameroun, Luc Magloire Mbarga Atangana, a fait le déplacement de la capitale économique dans l’optique d’en présider le lancement officiel. Le Docteur en droit et avocate au barreau de Bruxelles, Mme Patricia Kipiani, qui représentait le cabinet Primerio International pour l’occasion a expliqué combien cette première édition des « rendez-vous de la concurrence », se voulait sérieuse. Toute chose ayant justifié l’association aussi bien des universitaires de tous bords, du groupement inter-patronal du Cameroun (Gicam) que des autorités publiques camerounaises. Les Chercheurs de l’Université de Paris 1 Panthéon-Sorbonne en France et les spécialistes du droit de la concurrence, le Professeur des universités Martine Behar-Touchais et l’enseignant-chercheur Laurent Vidal ont fait le déplacement du Gicam.
Le ministre du Commerce, qui intervient comme l’autorité publique de tutelle du secteur de la concurrence, a tenu à préciser que les rendez-vous de la concurrence ne pouvaient mieux tomber dans un contexte communautaire et camerounais situé à « la veille de l’entrée en vigueur des Accords de partenariat économique « APE », entre les pays ACP et l’UE dont le Cameroun est partie », ces accords qui impliquent une ouverture de l’économie imposent donc qu’un certain accent soit mis sur le droit et la politique de la concurrence. Au demeurant, le représentant de l’Etat du Cameroun à ce rendez-vous a tenu à réaffirmer la place reservée jusqu’ici à la concurrence, « notre conviction, a –t-il expliqué, est que le commerce a besoin d’un environnement sain et c’est la raison pour laquelle un arsenal des textes législatives ou règlementaires existe au Cameroun et cela témoigne de la volonté de l’état de réguler le secteur ». A l’appui de son affirmation, M. Luc Magloire Mbarga Atangana a soutenu que la volonté et la détermination du Cameroun à faire du droit de la concurrence un enjeu de poids, se traduit depuis des années. Pour s’en féliciter, il souligne que les premières velléités d’encadrement de la concurrence remontent aux années1990 et qu’autant les lois ont créé la Commission nationale de la concurrence (Cnc) autant des décrets en ont fixés les contours organisationnels et structurels. Le président de ladite Commission Léopold Boumsong, qui était dans la suite du Mincommerce, a été appelé à présenter les aspects nationaux de la concurrence et précisément le rôle de la Commission nationale de la concurrence. Ce rôle, comme l’a martelé le ministre, doit s’attacher à « poursuivre et sanctionner les pratiques anticoncurrentielles, en s’appuyant sur des textes datant et nouveau à l’instar de la loi cadre protection sur la consommation, de la nouvelle loi portant organisation des activités commerciales ainsi que la loi sur commerce extérieur ».
TROIS GRANDES PRATIQUES ANTICONCURRENTIELLES
Le président de la Cnc a précisé à l’égard des chefs d’entreprises qui emplissaient la salle du Gicam qu’il existe sommairement 3 types de pratiques qui ont « pour effet d’empêcher, de fausser ou de restreindre de manière sensible, l’exercice de la concurrence au niveau du marché intérieur » au sens de la loi n°98/013 du 14 juillet 1998 relative à la concurrence. Il s’agit des abus d’une entreprise ou d’un groupe d’entreprises en position dominante sur le marché, des fusions et acquisitions d’entreprises et aussi des accords anticoncurrentiels. L’un dans l’autre, il est apparu que les pratiques anticoncurrentielles au Cameroun sont constatées par procès-verbal dressé par les membres de la Commission suite aux enquêtes consécutives à une plainte d’une personne physique ou morale ou à celles initiées par eux-mêmes.
Par la suite, les aspects multilatéraux de la concurrence ont été évoqués au travers de la présentation du rôle de la Conférence des Nations Unies sur le Commerce et le Développement (CNUCED) en matière l’accompagnement des politiques de concurrence. L’économiste de la CNUCED, Yves Kenfack a découvert le code CNUCED de la concurrence dont il a salué la pertinence tout en regrettant que celui-ci ne soit pas contraignant pour les Etats signataires.
Un autre moment des échanges a porté sur les aspects croisés entre le point de vue de l’économiste et celui du juriste quant à la concurrence. C’est M. Flavien Tchapga, économiste, consultant lui aussi à Primerio International et professeur associé à l’Université Senghor d’Alexandrie, qui s’y est attelé face à l’auditoire de la salle des conférences du Gicam. L’intervention de ce dernier peut se ramener à une suggestion forte faisant suite à l’interrogation suivante : « peut-on réussir la sensibilisation sur la concurrence si l’on ne tient pas compte des spécificités de l’environnement local ? ». Réponse, en effet, dans un contexte où 9 entreprises sur 10 sont individuelles, il faut se méfier des formules des juristes qui sont souvent larges et complexifiées pour les économistes plus proches du terrain.
Au cours du rendez-vous de la concurrence, une table-ronde a été ouverte pour asseoir la dimension didactique de la rencontre. Les débats et les questions étaient placés sous la houlette de M. Martin Abega, administrateur de sociétés, ancien membre de la Commission nationale de la concurrence et Consul honoraire du Royaume des Pays-Bas au Cameroun.
En dernière analyse, les expériences pratiques de règlementations et de politiques de la concurrence en Europe et au Cameroun ont clairement été croisées par le biais de Martine Behar-Touchais et Laurent Vidal d’une part et de Me Abdoul Bagui d’autre part. Etant entendu qu’au Cameroun, la régulation est émiettée par secteur d’activités.
Ce sont concrètement toutes les difficultés liées au libre exercice de la concurrence qui ont été passées au crible. La contrebande, la persistance des monopoles dans certains domaines ou encore la contrefaçon relèvent de ces écueils épluchés par les soins des experts internationaux et locaux à l’instar des représentants du CNUCED, de CEMAC, de l’OHADA et surtout des entreprises camerounaises. Le Dr. Patricia Kipiani a expliqué qu’il était important que « les réflexions et les échanges reviennent sur les difficultés auxquelles se heurtent les entreprises, sur les difficultés liées à la concurrence déloyale, à leur impact sur le secteur informel et autres activités informelles des entreprises formelles. Et aussi qu’ un accent soit mis sur la réglementation et sur les politiques économiques susceptibles de promouvoir notre espace économique ».
For our English readers, below is a Google Translate version in English of the article:
The international firm Primerio organized an awareness seminar on issues of law and competition policy in Cameroon and in the CEMAC zone.The event launched by the Minister of Trade, Luc Magloire Mbarga Atangana Mr. took place July 7, 2016 at the headquarters of GICAM in Douala.
Introduce competition as a “common good” to the community and “strengthen the teaching of competition in its legal and political dimensions” — such are the watchwords of the first “meeting competition” in Cameroon and driven CEMAC by the consultancy firm Primerio International and under the theme “from the law and competition policy in Cameroon and in the CEMAC.”As if to emphasize the importance, the trade minister of Cameroon, Luc Magloire Atangana Mbarga, made the trip from the economic capital with a view to chair the official launch.The Doctor of Law and lawyer at the Brussels Bar, Patricia Kipiani, who represented the firm Primerio International for the occasion explained how this first edition of “appointments of competition”, was meant seriously.Anything that justified the association both academics of all stripes, the inter-group employers of Cameroon (Gicam) that the Cameroonian public authorities.The researchers from the University of Paris 1 Panthéon-Sorbonne in France and specialists from the competition law, the University Professor Martine Behar-Touchais and Laurent Vidal teacher-researcher made the trip from Gicam.
Minister of Commerce, which acts as a public authority supervising the sector to competition, has insisted that the appointment of the competition could not get better in a community and Cameroonian context located “on the eve of the entry into force of the economic partnership agreements ‘EPAs’, between the ACP countries and the EU which Cameroon is a party “, these agreements which involve opening up the economy therefore require that a certain emphasis on law and the competition policy.Moreover, the representative of the State of Cameroon to this appointment held to reaffirm the place reserved far in the competition, “our conviction has -t he explained, is that the trade needs a healthy environment and that is why an arsenal of legislative and regulatory texts exist in Cameroon and it demonstrates the willingness of the state to regulate the sector. “In support of its contention, Luc Magloire Atangana Mbarga argued that the will and determination of Cameroon to the competition law of a weight issue, resulting in years.To be welcomed, he stressed that the first framework for competition ambitions date back to the 1990’s and that so many laws created the National Competition Commission (CNC) as decrees have laid the organizational and structural contours.The president said Leopold Commission Boumsong, who was later in the MINCOMMERCE, was called to present the national aspects of competition and specifically the role of the National Competition Commission.This role, as insisted the minister, must strive to “prosecute and punish anti-competitive practices, based on texts dating and new like the law under protection on consumption, the new law on the organization of business and the foreign trade Act. “
THREE MAJOR ANTI-COMPETITIVE PRACTICES
The president of the CNC said against business leaders who filled the room Gicam there summarily 3 types of practices which have “the effect of preventing, distorting or restricting significantly, the year of competition in the internal market “under law No. 98/013 of 14 July 1998 on competition.This is abuse of a company or group of companies in a dominant market position, mergers and acquisitions as well as anti-competitive agreements.One the other, it appeared that anti-competitive practices in Cameroon are recorded in minutes drawn up by the Commission of the members following the investigations following a complaint from a natural or legal person or those initiated by them -Same.
Thereafter, the multilateral aspects of competition were discussed through the presentation of the role of the United Nations Conference on Trade and Development (UNCTAD) in support for competition policy.The economist of UNCTAD, Yves Kenfack discovered the UNCTAD code of competition which he praised the relevance while regretting that it was not binding on the signatory states.
Another moment of trade covered the Crusaders aspects between the views of the economist and that of the lawyer about the competition.It was Mr. Flavien Tchapga, economist, consultant also to Primerio International and associate professor at the Senghor University of Alexandria, which it is harnessed facing the audience of the Gicam conference room.The intervention of the latter can be reduced to a strong suggestion in response to the following question: “can we succeed awareness on competition if it does not take into account the specificities of the local environment?“.Response, in fact, in a context where 9 out of 10 companies are individual, beware formulas lawyers who are often larger and more complex to the nearest economists ground.
During the appointment of the competition, a panel discussion was opened to establish the educational dimension of the encounter.The debates and issues were under the leadership of Mr. Martin Abega, corporate director, former member of the National Competition Commission and Honorary Consul of the Kingdom of the Netherlands in Cameroon.
Ultimately, the practical experiences of regulations and competition policies in Europe and Cameroon have clearly been crossed through Martine Behar-Touchais and Laurent Vidal one hand and Mr. Abdul Bagui other.It being understood that in Cameroon, regulation is broken by sector.
These are all practical difficulties related to the free exercise of competition that were screened.Smuggling, the persistence of monopolies in certain areas or counterfeiting within these pitfalls peeled for the service of international and local experts like the representatives of UNCTAD, CEMAC, OHADA and especially Cameroonian companies.Dr. Patricia Kipiani said it was important that “the reflections and exchanges back on the difficulties firms face, the difficulties related to unfair competition, their impact on the informal sector and other informal activities formal businesses.And also that an emphasis on regulation and economic policies that promote our economic space. “
This Thursday, June 7th, 2016, the Ministry of Trade & Commerce of Cameroon, the CEMAC organisation of states, and law boutique Pr1merio, will host an all-day conference on competition law & business in Africa, taking place in Douala, Cameroon.
The brochure and press communiqué are available online. Dr. Patricia Kipiani, the host of the event, legal scholar and Pr1merio attorney, notes that the event is almost sold out and few seats remain. “We are excited to host the first-ever antitrust conference of its kind in Cameroon,” Kipiani notes. “Our platform allows us to work directly with both scientific, scholarly, and governmental advisors to create fora like these, where experts are able to discuss cutting-edge issues in the burgeoning field of competition law on the continent,” adds Prof. Flavien Tchapga, who will also speak at the event.
“Partisanship can degrade the brand of the antitrust agencies, reduce their influence aboard, and discourage longer term investments that strengthen agency performance. Though difficult to quantify, these constitute a potentially serious, unnecessary drag on agency effectiveness”
(William Kovacic, “Policies and Partisanship in U.S. Federal Antitrust Enforcement” (2014) Antitrust Law Journal, Vol. 79 at 704).
A consideration of the developments in the South African context indicates the substantial risks associated with the manner in which antitrust agencies and governmental departments approach public interest considerations in merger proceedings.
Merging firms, particularly multinationals, need to be acutely aware of the challenges and risks associated with the use of public-interest considerations throughout merger-control proceedings in South Africa. Recent interventionist strategies have had a significant impact on two key features: the timing and cost of concluding mergers in the region.
The paper was presented at this year’s ABA Antitrust Spring Meeting, the largest competition-law focussed conference in the world, taking place annually in Washington, D.C. AAT’s readers have exclusive free access to the PDF here.
Key competition-law conference features dedicated panel discussion on African antitrust developments
By Michael-James Currie
The 54th annual American Bar Association Antitrust Spring Meeting was held in Washington, D.C., during the second week of April 2016 and the AAT editors were there to ensure that we provide our readers with an update on the latest developments in relation to African antitrust issues, discussed during a panel held last Friday.
Given that mergers hit a global all-time high last year with the total value of transactions amounting to over USD 4.6 trillion, merger control is certainly at the forefront of many antitrust practitioners. The interest in mergers and acquisitions has perhaps gained even further attention in light of the announcement this week that the USD160 billion Pfizer/Allergan global mega-deal has been officially abandoned, despite the transaction having already been filed before all the relevant competition agencies around the world. While the Pfizer/Allergan deal was called off as a result of new tax laws and therefore not as a result of antitrust issues directly, the deal did put multinational mega-deals firmly in the spotlight.
The Pfizer/Allergan deal is not the only mega-deal that faced significant government opposition. It was announced this week that Halliburton’s takeover of Baker Hughes, in a deal valued at USD 25 billion, is going to be strongly opposed by the U.S. DOJ.
It is, however, not only the U.S. Government that is having a significant impact on multinational deals, as evidenced by the Anbang Insurance and Starwood Hotels & Resorts deal, valued at USD 14 billion, which has also been abandoned after mounting pressure by the Chinese government.
From an African perspective, the South African Competition Commission just last week extended its investigation in the USD 104 billion SABMiller and Anheuser-Busch InBev merger. It is widely suspected that the request for the extension is due to intervention by the Minister of Economic Development, in relation to public interest grounds. Although there is no suggestion at this stage that Minister Patel is opposing the deal, the proposed intervention does highlight bring into sharp focus the fact that multinational mega-deals face a number of hurdles in getting the deal done.
‘Getting multinational deals through’ is a hot topic at the moment amongst antitrust practitioners and is and the ABA thought it beneficial to have a panel discussion dedicated purely to merger control issues across African jurisdictions. In particular, the panel addressed some of the key issues which merging parties need to consider, including inter alia issues relating to harmonisation across agencies, the role of public interest considerations, prior implementation and the need for upfront substantive economic assessments.
The panel consisted of a varied mix of panellists from both private practice and government, and included Pr1merio director John Oxenham (he is also a founding partner at South African based law firm Nortons Inc.), economist and former Commissioner of the COMESA Competition Commission (COMESA CC) Rajeev Hasnah (Rajeev was also a former commissioner of the Mauritius Competition Commission and is an economist for Pr1merio), manager of the South African Competition Commission office, Wendy Ndlovu, and Kenyan based external counsel Anne Kiunuhe (Anne practices at the law firm Anjarwalla & Khanna).
The panellists were tasked with addressing a variety of topics: we summarise below some of the key issues which the panellists highlighted, which merging parties, practitioners and antitrust agencies themselves (amongst whom Tembikosi Bonakele, the South African Competition Commissioner was present in the panel audience) should be cognisant of in relation to merger control in Africa.
John pointed out that from a South African perspective, mergers undergo a robust evaluation by the Competition Authorities and that although the investigation of most large mergers is completed within 60-70 days, the fact that the Commission may request the Competition Tribunal for an extension of up to 15 business days at a time, may result in the investigation of certain mergers taking considerably longer. The risk of a merger being delayed is increased significantly due to the level of third party interventionism, particularly ministerial intervention on public interest grounds.
John advised that merging parties should consider the impact that a particular merger will have on the public-interest grounds upfront to avoid delays in the investigation period as a result of further requests for information from the Commission, or may even amount to an incomplete filing.
In respect of substantive economic assessments, John pointed out that a number of jurisdictions, including South Africa, Namibia, Zambia and to a lesser extent Botswana, requires a substantive upfront economic assessment. In this regard the South African Competition Commission is perhaps the most robust in its economic evaluation of a merger in light of the resources dedicated to its own in-house economic department as well as utilising external experts when necessary. John also highlighted the fact that the South African Competition Authorities rely on oral testimony and expert witnesses are often subjected to substantial and lengthy examination and cross examination before the Competition Tribunal.
On the topic of gun-jumping or prior implementation, John mentioned that the following jurisdictions are examples of countries which do not require notification prior to implementing the transaction – in other words, they are not suspensory:
Whereas the following countries do require notification prior to implementation (suspensory merger control jurisdictions):
On harmonisation, John confirmed that in relation to public interest considerations in merger control, the South African competition authorities play a leading role on the African continent and pointed out that in addition to Kenya and Tanzania, Namibia also considers public interest considerations and that there is a substantial amount of collaboration and information sharing between the South African and Namibian competition authorities, as was the case in the Walmart/Massmart deal.
Despite the information sharing between agencies, John confirmed that there are rules in place to protect confidential and legally privileged information and that the South African competition authorities are cognisant and respectful of these provisions.
Rajeev noted the significant progress which the COMESA CC has made in relation to merger control by publishing financial thresholds for mandatorily notifiable transactions and specified filing fees, as well as publishing guidelines which clarify when a merger will have a sufficient regional dimension to fall within the COMESA CC’s jurisdiction.
On the topic of harmonisation, Rajeev discussed the challenges due to a lack of harmonisation between COMESA and its member states and noted that COMESA does not have exclusive jurisdiction in the cases which do fall within its jurisdiction. Parties, therefore, may find themselves being required to file a merger both before the COMESA CC as well as before the respective national authorities. A further challenge facing the COMESA CC is that there are 19 member states and consequently, the relevant geographic market is significant. Accordingly, often the national authorities are best placed to evaluate a merger and will therefore defer the evaluation of the merger to the relevant national authority.
On the role of economic assessments, Rajeev stated that an economic assessment underlies any merger evaluation and that both the Mauritius Competition Commission and the COMESA Competition Commission conducts a comprehensive economic assessment of a merger.
When asked on what role public interest considerations play in merger control in terms of the South African competition regime, Wendy indicated that the framework of the Competition Act specifically requires the competition authorities to consider the impact that a merger may have on the four specified public interest provisions contained in the Act. Wendy confirmed that an evaluation of public interest considerations may both justify a merger despite the merger likely being likely to cause a substantial lessening or prevention of competition in the market, alternatively, public interest considerations may lead to a prohibition or the imposition of conditions on a merger which raises no competition law concerns and may in fact be pro-competitive.
Wendy recognised that there is a need, however, for greater certainty in respect to the manner in which the South African authorities evaluate public interest considerations and pointed out that the Competition Commission is likely to finalise and publish its guidelines on the public interest assessment in an effort to promote greater certainty.
On prior the issue of prior implementation, Wendy pointed out that merging parties need to be mindful of the consequences of gun-jumping and noted that the South African Competition Tribunal has imposed administrative penalties, as in the Netcare case, on parties for failing to notify a mandatorily notifiable transaction.
Anne discussed the Competition Authority of Kenya’s (CAK) willingness to focus not only on merger control but has also identified the CAK’s increasing tendency to investigate and prosecute firms engaged in restrictive practices (as demonstrated by the recent dawn raids conducted by the CAK in the fertiliser industry). Despite the CAK’s growing confidence, Anne pointed out that in respect of merger control, the CAK is open to and in fact often relies on precedent from foreign jurisdictions when evaluating a merger. In particular, Anne noted that public interest grounds are specifically considered during the merger review procedure and that in this respect, the CAK largely takes the lead from the South African competition authorities.
From a practical perspective, Anne mentioned that the CAK usually requests a meeting with the merging parties soon after a transaction has been notified, and that usually representatives from the merging parties, along with local external legal counsel, should be present. The CAK prefers that the representatives present should be the best placed to answer or address the CAK’s queries. This often necessitates representatives from the parent company being present as opposed to representatives from the subsidiary entities only.
The direct contact between the CAK and the merging parties is quite different from the manner in which the COMESA CC evaluates mergers where the consideration of a merger is done solely on the papers and any communication between the COMESA CC and the merging parties is done through the merging parties’ local external counsel.
As to legislative developments, Anne pointed out that the merger regulations in Kenya now provide that for purposes of establishing a “change of control”, it is sufficient if the acquiring firm is able to materially influence the commercial decisions of the target firm. Accordingly, the acquisition of a minority shareholding for instance may constitute a change of control if the holders of such shares may for instance exercise veto rights.
On COMESA, Anne mentioned that the COMESA CC permits merging parties to seek a comfort letter when unsure as to whether a merger requires filing and that the use of comfort letters has been rather prevalent.
The role of public interest considerations in merger control was a dominant focus point throughout the panel discussion due to this unique aspect in a growing number of African jurisdictions merger control provisions.
Please click on the following link to access a an article on the role of public interest considerations in merger control in South Africa, which addresses in particular, the impact of ministerial intervention in merger proceedings and the concomitant impact which such intervention has on the costs, timing and certainty of merger proceedings.
In our latest instalment of our Meet the Enforcers series, we speak with South African Competition Commissioner Tembinkosi Bonakele on the topic of hosting a series of academic & practitioner platforms to discuss cases and developments in competition-law enforcement.
This week, the South African Competition Commission and the Competition Tribunal successfully organised the 9th Annual Conference on Competition Law, Economics & Policy (as part of the 4th BRICS International Competition Conference), taking place in Durban, South Africa.
Commissioner Bonakele, the head of the SACC, discussed hosting the conference with AAT’s contributing author, Njeri Mugure, Esq. According to his biography, Mr. Bonakele has been with the Commission for the past ten years. He briefly left the Commission in March 2013 and came back in October 2013 as Acting Commissioner. He has been in this position until his appointment as the Commissioner. Bonakele has occupied various positions in the Commission’s core divisions. He was appointed Deputy Commissioner in 2008, and prior to that worked as head of mergers, head of compliance and senior legal counsel respectively.
The AAT-exclusive interview follows:
AfricanAntitrust.com: South Africa has been participating in the BRICS International Competition Conference (“BRICS ICC”) since 2011, a year after she officially became a member of BRICS. This November the country will host the 4th of this biennial meeting in Durban. What are your goals for this year’s conference?
The theme for the BRICS International Competition Conference 2015 is “Competition and Inclusive”. This theme will enable the conference to explore the relationship between competition and growth, competition and employment, competition and inequality and competition and poverty. As with the previous conferences, the aim of the conference is to strengthen cooperation amongst BRICS countries in the area of competition regulation by creating a platform for sharing experiences. We also aim to use the conference to discuss a proposed Memorandum of Understanding between BRICS competition agencies. Finally, the conference is also a platform for both developed and developing countries to discuss competition policy and enforcement issues.
AfricanAntitrust.com: Speaking of Durban, some might have expected for the 9th Annual Competition Law, Economics and Policy Conference (“Annual Competition Conference”) and/or the BRICS ICC to be held in Pretoria, the capital city of South Africa. Could you tell us why you chose to hold the two conferences in Durban?
We wanted a venue that would provide world class facilities for the conference as well as enjoyment for the delegates, and Durban ticks both boxes. The Kwazulu-Natal province, where Durban is situated, is home to rich natural resources, including Africa’s Big Five game and beautiful mountainous landscapes.
Durban itself is a diverse African city providing cultural diversity as well as a natural paradise known for its beautiful coastline beaches and subtropical climate. The City is also host to the largest and busiest harbor in Africa. The Inkosi Albert Luthuli International Convention Centre (Durban ICC), where the two conferences will be held, is the largest indoor conference facility in Africa.
The Commission has previously partnered with the KwaZulu-Natal Provincial Government, eThekwini (Durban) Municipality and the University KwaZulu-Natal on various activities.
AfricanAntitrust.com: In addition to hosting the Annual and the BRICS competition conferences, the South African Competition Commission (“the Commission”) along with Cresse and the University of Kwazulu-Natal will hold a joint workshop exploring areas such as collusions and cartels, unilateral and coordinated effects in mergers, the economics of exclusionary conducts, and use of economic evidence, among others. What do you hope this workshop will achieve?
The economic understanding of competition policy is constantly evolving. In the last two decades economists have developed new theories of harm and traditional views have changed significantly. The workshop will bring top quality instruction on the economics of competition to agency officials in South Africa and more broadly Africa, competition practitioners, academics and policy makers. I hope that everyone attending the workshop will walk away having learned something new about the economics of competition.
AfricanAntitrust.com: Speaking of the this year’s events, planning the joint workshop, the Annual Competition Conference and the BRICS ICC was a great undertaking, could you tell us why you decided to have the three events back to back and what audience each event is tailored to suit?
With the BRICS conference coming into South Africa was a great opportunity as so many people were interested to come. So many opinion makers, academics and practitioners were going to be in the country, so we organized all these events to take advantage of their presence, and the response was very positive. We also thought logistically it makes sense to have our annual conference organized back to back with BRICS, so we don’t get conference fatigued. In the end, all the events flow into each other.
The Joint Workshop is a technical training and knowledge sharing platform, looking at the latest thinking on various aspects of competition enforcement.
The conference is an annual academic platform to discuss cases and developments in competition law enforcement.
AfricanAntitrust.com: Turning to the BRICS International Competition Conference, in what way has this year’s agenda been informed by the previous three conferences? What impact do you think the previous conferences have had on antitrust discourse in BRICS and non-BRICS countries?
The previous conferences, hosted by the Federal Antimonopoly Services of Russia in 2009, the State Administration for Industry and Commerce of the People’s Republic of China in 2011 and Competition Commission of India in 2013, created a solid platform on which we can deepen our relations in the field of competition regulation.
South Africa has focused the conference on the relationship between growth and inclusivity. Furthermore, this year’s conference aims to institutionalize BRICS cooperation on competition matters, and move it beyond conferences. There is a proposed Memorandum and Understanding, as well as a joint research initiative.
AfricanAntitrust.com: There’s been a lot of debate surrounding public interest factors in merger review. What do you hope to achieve by including the topic to this year’s conference agenda?
It is important that BRICS countries weigh-in on this important debate. There is a divergence of views amongst many antitrust practitioners on the compatibility of antitrust issues with public interest issues, but everyone accept that there are public interest issues. The conference will deepen and broaden perspectives on the matter.
AfricanAntitrust.com: How do these engagements such as the BRICS conference and competition law enforcement in general benefit the ordinary South African?
The South African competition authorities were established as a package of reforms to transform the unequal South African economy to make it economy inclusive and ensuring that those who participate in it are competitive.
Through engagements such as the BRICS conference we’re able to discuss with our BRICS counterparts how to make our economies, which are similar, more efficient, competitive and inclusive.
The Commission has, in the past 16 years investigated and dismantled cartels from different sectors including construction, bread – a staple food for many South Africans, and cement. In the cement cartel, for instance, the Commission conducted a study post the cartel and discovered that we have saved consumers about R6 billion.
AfricanAntitrust.com: Mr. Bonakele, are there other topics you would have liked to address or comments you would like to add?
We see BRICS as an important and strategic platform where we advance arguments about the relationships between competition and other policy instruments that are very relevant in our developing countries.
As a collective, BRICS competition authorities are able to provide leadership in the international antitrust community on what it means to create and enforce competition law and policy in developing economies which come with their own particular challenges and opportunities. These perspectives will serve to enrich the global knowledge base in competition enforcement.
AfricanAntitrust.com: Thank you for taking the time to speak with me, Commissioner!
Minister finds praise for competition agencies, having increased fines “1000%”
The official South African news agency reports that Economic Development Minister Ebrahim Patel has lauded the country’s competition authorities as “remarkably effective over the past 15 years.”
“The competition authorities have done solid investigations as they have stepped up actions against cartels and promoted public interest consideration when conducting investigations,” he is quoted as saying at the 8th Annual Competition, Law, Economics and Policy Conference in Johannesburg. “The remedies and fines imposed by the competition authorities climbed ten fold compared to the previous five years, call it 1000 percent, reaching over R6 billion.”
Minister Patel said the competition authority had come into their own with solid pipelines of anti-cartel investigation, the systematic consideration of public interest and issues in merger acquisition.
Setting aside the unorthodox phraseology (“merger acquisition”) in the quoted paragraph, the Minister’s remarks indeed echo what we at AAT have observed for well over a year now, namely the renewed and increased focus of the competition agencies on so-called “public-interest” factors, in lieu of (or in addition to) traditional, classic antitrust considerations, such as market power, concentration/HHIs, and prediction of unilateral/coordinated effects of proposed mergers.
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.
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.
The conference web site’s headline points out, somewhat vaguely, that the event is “more than a meeting, it’s our future“, perhaps implying that competition law is essential to this African nation’s future economic growth — a fact that bodes well for the enforcement activities of the thus-far largely dormant Moroccan Conseil de la Concurrence, an agency that has notably seen its budget slashedby over a quarter to a mere $1.74m in 2012 (last available year of its annual reporting).
Substantively, one of the key topics discussed at the event is the question how antitrust enforcers should deal with state-owned enterprises (SOEs). Especially in emerging ICN member countries (including many African nations with relatively young competition-law authorities), this topic is hotly debated, as their economies are transitioning from a largely SOE-dominated environment to a more open and competitive one. The Moroccan Conseil has therefore created a “Special Project” on the issue, including a survey to be distributed to members, outlined as follows:
The Moroccan Conseil de la Concurrence (MCC) wishes to address the issue of competition enforcement in relation to State Owned Enterprises (SOEs) as the Special Project for the 2014 ICN Annual Conference. The MCC wishes to address this issue not only because it is a hot-topic in developing economies, but also because of the liberalization of markets, this may lead to the revocation of exemptions for certain SOEs and subsequent investigation of competition infringements as an issue of interest for all ICN members.
One of the biggest economic dilemmas is how far a government should supply goods and services. In many developing economies, government intervention and the creation of public enterprises is a common way to cope with the need for economic and social development in key sectors. However, once a sector has reached sufficient maturity, the need for a SOE often decreases.
Many jurisdictions face the legacy of SOEs, some of which are entirely exempted from the ambit of competition enforcement. Once the economy is ripe for private sector entrants, it can be difficult to dislodge SOE supported monopolies. It is noted that this situation has created shortcomings in performance, competitiveness and operating systems in some sectors.
Looking at Morocco as an example, the country adopted in 1989, a law pertaining to the privatization of SOEs and started to implement a liberalization process of an important part of its economy. In 2000, this whole process culminated in the adoption of a law on freedom of prices and competition, thus marking the end of a long period of price control and restriction of competition.
All these elements lead Morocco naturally to question the position of SOEs relating to competition rules, especially in the current context of the reform of Moroccan competition law.
So what do we mean by SOEs in the context of this project? In our opinion, SOEs are those publicly owned enterprises created to ensure that a public need for a product and/or service is fulfilled and universally accessible.
Generally, a SOE must provide coverage to all consumers, irrespective of geographical location at regulated prices. As the Moroccan government has deemed that the service which the SOE provides is necessary for the well-functioning of the state, a SOE must be in a position to guarantee consistent supply, which includes a requirement to have reserve/standby capacity available at all times for possible peaks.
There are also SOEs that may have purely commercial activities without any goal of general interest satisfaction.
Although most jurisdictions assess SOEs under competition law, there are often a few exemptions for certain sectors or businesses. These SOEs are then exempted from falling under competition law and potentially other national laws (sovereign immunity). When the exemption is created, the purpose is generally to ensure that a nascent industry has enough financial (and political) backing to survive.
SOEs are generally put in place where the provision of essential goods or services may be at risk. In some sectors, the market may fail to provide essential goods or services as a result of a private enterprises’ inherent desire to minimize risks, for example, risk selection which might otherwise occur in the health care or education sectors and in other markets, based on infrastructure networks, the incentive (or means) to carry out the initial investment may be lacking or may lead to natural monopolies (telecom, post, rail, gas, electricity)
One of the issues this Special Project wishes to address is whether (and to what extent) an exemption which excludes a SOE from the purview of competition enforcement is appropriate in view of the public interest objective. SOEs that do not face free competition may lack an incentive to be innovative or to be efficient, for example to search for the cheapest – yet most effective materials or means of production to provide a certain good. This is linked to the question of how (or to what extent) governments and competition authorities can (re)introduce a certain sector, or business, to the forces of competition. A related issue is the question of whether competition authorities can have a role to play in encouraging a sector, or a SOE within that sector, to evolve in such a way as to ensure the eventual maturity of the market so that a SOE or an exemption for a SOE from competition law is no longer necessary to provide the state with the needed services/products.
A further issue this Special Project wishes to address is the potential difficulty in ensuring that competition enforcement involving SOEs is effective. For example, how do members deal with political and social pressure; and what can members do to ensure that sanctions serve a deterrent purpose.
This brings us to the final issue the MCC wishes to address within the ambit of this Special Project, namely, advocacy and guidance efforts. How can a competition authority best explain to the government why the inclusion of SOEs within the jurisdiction of competition rules will lead to better conditions for consumers?
The MCC wishes to gather information on this topic for the purposes of an information sharing experience among ICN members on the more practical aspects of investigating SOEs. It is thought that the discussions which spring from this Special Project will help all ICN members in understanding regulated sectors and their advocacy efforts.
The three core issues identified above are vital to the daily work of many newer competition authorities and of mature competition authorities in emerging economies. Although many excellent papers have been written by the ICN Unilateral Conduct Working Group, the Organisation for Economic Co-operation and Development and the World Trade Organization, as well as several academics, very few of these articles touch upon the above mentioned practical implementation issues.