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This note summarizes the recent decision of the South African Competition Tribunal, which found Sasol Chemical Industries guilty of excessive pricing.

South Africa is one of the few competition law jurisdictions that actively pursues cases of ‘excessive pricing’ by dominant firms.  The Competition Commission had alleged that Sasol had charged domestic customers excessive prices

The South African Competition Commission has recently concluded its investigation into the potential effects on competition of exclusive lease agreements between supermarkets and their landlords. This note explains the implications of the Commission’s decision for firms that rely on exclusive lease agreements. 

Arguments for and against exclusive lease agreements

Supermarkets often play the role of

The year of 2013 provided further opportunity for development of South Africa’s competition policy, law and practice. The year’s highlights included the conclusion of the Competition Commission’s Fast Track Settlement  process involving bid rigging in the construction sector; some important merger decisions; developments in the law on pursuit of private damages; and clarity on numerous procedural matters in enforcement actions. These are elaborated upon further below.

Mergers

Merger Regulation Trends

324 mergers were notified to the Competition Commission in the period April 2012 to March 2013.  This represents an increase of around 10% to the 291 mergers notified in the previous year. Most of these transactions were in the manufacturing 23%, property 27% and mining sectors.

In this most recent period, 85% of mergers were approved unconditionally. 11% were approved subject to conditions (28 behavioural remedies aimed at public interest issues and seven structural remedies); and 4% were withdrawn or dismissed for lack of jurisdiction.  No mergers were prohibited.

The Commission continued with a trend we identified last year in protecting and advancing public policy considerations (most notably protection of employment) in its merger analysis. The case of Stefanutti/Enorgotec gave rise to the fastest decision yet by the authorities (reportedly made within four hours of filing of the Commission’s recommendation to the Tribunal) was based largely on the need to protect employment in a firm under severe financial distress.

In Glencore / Xstrata, the Competition Tribunal confirmed an agreement between the merging parties and the National Union of Mineworkers that the number of skilled employees retrenched as a result of the merger would be limited to 80, and the number of semi-skilled and unskilled employees retrenched would be limited to 100.  Greater protection was provided for semi-skilled and unskilled workers, who may only be retrenched after two years following a 90 day review period, during which the necessity of the potential retrenchments had to be considered in consultation with the trade union.


Continue Reading 2013 South African Antitrust/Competition & Marketing Law Year in Review