Antitrust Overhaul: South Africa to amend Competition Act today

South African President Cyril Ramaphosa is expected to sign the Competition Amendment Bill into law today, February 13, 2019, continuing a busy seven-day streak for major legislative antitrust developments on the continent (see here). The new law will be amending the venerable Competition Act, one of the preëminent antitrust statutes of the continent.  The amendment has been pushed for by Minister for Economic Development, Ebrahim Patel.  The official Presidential commentary on today’s signing notes the novel fights against “concentration and economic exclusion as core challenges” to the country’s growth, as well as the perceived dangers of economic exclusion from major markets of small and black-owned businesses.

As a trio of competition attorneys write in a recent article in the Journal of European Competition Law & Practice, the Amendment Bill alters key provisions of the South African Competition Act focusing specifically on the redistribution of wealth and transformation of ownership in lieu of pursuing traditional antitrust goals.

The Bill provides for greater ministerial intervention at the initial stage of a merger (based on national security), during the merger investigation (based on public-interest grounds) and broadens the right of appeals to parties outside the merger control review.

The Bill lowers the standard that the South African Competition Commission must meet to prosecute cases and foreshadows a risk of increased third-party interventionism more generally.

The departure from a traditional substantial lessening of competition (SLC) test to an adverse effects-based test, which takes public interests considerations into account, is likely to result in the injection of greater subjectivity into the decision-making process and parties’ increased difficulty in self-assessment of conduct particularly in relation to dominant firms.

AAT has published further articles on the topic here, here, and here.

Minister Patel speaks

Minister Patel speaks

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Antitrust amnesty: new regime to go online soon

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Kenya to become latest competition jurisdiction with cartel leniency scheme

As Mugambi Mutegi of the Business Daily reports, Kenya is the latest antitrust jurisdiction to embrace a self-reporting leniency programme.

Mr Wang’ombe Kariuki, director of the CAK

Self-reporting of “hard-core” competition-law offences (such as price-fixing cartel conduct, market division, bid rigging, or group boycotts among horizontal competitors) has long been a staple of antitrust enforcement in the most developed jurisdictions, including the United States and the European Union.  In South Africa, cartel-whistleblowing leniency has just passed its 10th anniversary, and in the EU, the European Commission’s “Notice” on the non-imposition of fines in certain cartel cases (i.e., the EU’s leniency regime) recently celebrated its 18th birthday — nowadays, more than 75% of the EC’s cartel matters are uncovered thanks to one or many cartel members “snitching” on their counterparts, in exchange for full or partial amnesty from antitrust prosecution and attendant fines.

The Competition Authority of Kenya (CAK) has recently upped its rhetoric, threatening criminal sanctions against various business sectors’ potential cartel members and disputing jurisdiction of the multi-national, but still feeble, COMESA competition authority in merger cases.

In Africa, Kenya (AAT archive on CAK issues here) is now becoming a new member of the “Leniency Club”, rewarding whistleblowers with eased penalties for volunteering relevant tips and information on the workings of the cartel.  The CAK is acting to implement the provision of the Kenyan Finance Bill 2014, which allows it to terminate cartel investigations with lighter punishment for whistleblowers, all the way to a full pardon.

“The Authority (CAK) may operate a leniency programme where an undertaking that voluntarily discloses the existence of an agreement or practice that is prohibited by the Competition Act and co-operates…in the investigation of the agreement may not be subject to all or part of a fine…”

The agency’s web site — which otherwise (unusually) refers to the Business Daily article quoted here, instead of issuing its own press release — tersely provides as follows:

Cartel firms get amnesty in new CAK regulation

The competition regulator has drafted a law that will see whistleblower companies and their directors get off with lighter punishment for volunteering information that helps to break up cartels.

The Competition Authority of Kenya (CAK) says introduction of this law, which is already in the Finance Bill 2014, will attract informers that can help to bust unlawful business agreements between cartels and other secretive pacts that facilitate anti-competitive behaviour.

Whistleblowers whose evidence leads to the successful termination of such agreements and punishment (fines and jail sentences) of the participants will either get reduced fines or full pardon.

The CAK’s Director General, Francis Wang’ombe Kariuki, is quoted as saying that the authority’s is merely awaiting Parliament’s amendment of the law, and that “[t]he settlement policy we have drafted includes offering leniency to the directors of companies who come forward individually or as a group to report on cartels or unlawful business pacts“.

More antitrust? Calls for competition legislation in Ghana

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Former Ghanaian Supreme Court Justice calls for competition law

According to online reports, Mr Samuel Date-Bah, retired Justice of the Ghanaian Supreme Court and Council Chairman of the University of Ghana, made some strong public comments on the economic necessity of creating a new West-African antitrust regime at a conference on December 5, 2013, also known as “World Competition Day”.  The event was the “Policy Roundtable Discussion on Competition Reforms in Ghana,” organized by CUTS International, held in the capital of Accra.

The article reports that Justice Date-Bah, who has held visiting academic positions at Oxford and Yale Law School, deplored the legislature’s previously failed attempts of enacting a comprehensive competition law, calling for the country to do so to ensure proper market dynamics.

Other panelists, such as Dr Edward Brown, Director of Policy Advisory Services at the African Centre for Economic Transformation (ACET), reportedly supported the Justice’s position on the need for a Ghanaian competition-law regime and called for its integration into the regional supranational bodies of ECOWAS and UEMOA.