On 7 June 2017 the Competition Commission South Africa will commence a market inquiry into the public passenger transport sector. This is the fifth market inquiry to be initiated by the Commission, following inquiries into the LPG, healthcare, grocery retail and banking sectors.
What does the Commission intend to investigate?
In terms of the Terms of Reference (published on 10 May 2017), the Commission will explore how competition in the public passenger transport sector is affected by factors such as:
- Government regulations which govern the prices that may be charged by certain transport providers, such as metered taxi operators;
- Government subsidies provided to certain providers, such as PRASA and the Gautrain;
- Government regulations allocating certain transport routes to particular service providers;
- Disruptive technology, such as Uber;
- Gautrain buses being accessible to Gautrain passengers only, and
- Envisaged expansion of the Gautrain’s network.
The Commission has also indicated that it will consider the ownership patterns and transformation in the sector.
What is a market inquiry?
A market inquiry is a general investigation into the state, nature and form of competition in a market, rather than a narrow investigation of specific conduct by any particular firm.
The Commission, acting on its own initiative, may conduct a market inquiry if it has reason to believe that any feature or combination of features of a market for any goods or services prevents, distorts or restricts competition within that market.
Upon completion of an inquiry, the Commission must publish and submit a report to the Minister of Economic Development, with or without recommendations. These recommendations may include recommendations for new or amended policies, legislation or regulations relating to the sector in question, or recommendations to other regulatory authorities on competition matters.
It is also possible that, in the course of the inquiry, the Commission may uncover illegal conduct, in which case it may initiate a complaint and commence enforcement proceedings against a particular firm.
Which firms could be the subject of this market inquiry?
The Terms of Reference are broad, and indicate that the Commission will investigate all aspects of the land-based public passenger transport industry. This will include investigations into:
- Minibus taxis;
- Localised taxis;
- Metered taxis;
- App-based taxis;
- The Passenger Rail Agency of South Africa (PRASA);
- The Gautrain, and
- Buses, including commuter buses, scholar buses, long distance buses and tourist buses.
What should affected firms expect during the inquiry?
As set out in the Terms of Reference, the Commission will establish a team that consists of Commission staff, as well as industry experts and/or consultants as and when required. The Commission will also allow all stakeholders an opportunity to provide input into the inquiry process and its outcomes.
Once established, the team will gather and assess information from relevant stakeholders of the public passenger transport industry. This information may be gathered by way of:
- Information requests;
- Calls for written and/or oral submissions;
- Targeted meetings with key industry stakeholders, and
- Public hearings.
During the inquiry, the Commission will contact all stakeholders involved in the land based public passenger transport industry in order to gather information in the ways described above.
The Commission aims to complete the public passenger transport market inquiry by May 2019.