Competition Compliance Programs

This article considers the potential for changes in the treatment of vertical agreements under South African competition law as a result of recent amendments to the Competition Act, as well as current policy views within the law-makers and regulators.

Section 5(1) of the South African Competition Act prohibits vertical agreements that substantially prevent or lessen

The Competition Bureau announced the 2019 transaction-size pre-merger notification threshold under the Competition Act increased to C$96 million from C$92 million, effective February 2, 2019. Innovation, Science and Economic Development Canada also announced new foreign investment review thresholds under the Investment Canada Act, effective January 1, 2019.

Competition Act

In general terms, certain transactions that

The Competition Act (‘Act’) is first and foremost national in its focus. This is clear from its objects set out in the Act’s Preamble and Purpose. Although the Act makes reference to international law obligations, participation in world markets and the role of foreign competition in the Republic, to look at the role of South Africa in competition law’s global village, the key is not to be found in that language, but rather in the continuing development and application of South Africa’s competition policy.

Now in its 19th year, the South African authorities (that includes the Competition Commission, Tribunal and Appeal Court) have enjoyed a leading status amongst developing competition law jurisdictions. The authorities have been recognized by peers in other jurisdictions, global bodies and practitioners for their pioneering role in development of a comprehensive body of competition law and policy, often punching above their weight category, particularly in relation to the role of competition law in socio- and development economics. Some have taken fright at the suggestions advanced which appear to promote the well-being of local businesses and the public interest above consumer welfare as the true-north of anti-trust.

This development of law and policy as well as the well-earned status does not come about simply by practicing in one’s back garden. Far from that, South Africa has gone out in the international arena participating and joining allegiance with others, perhaps sometimes as a more junior partner and in other cases as a more experienced adopter of the competition global wave. There are MOU’s enshrining cooperation with the EC, Brazil, Russia, India, China, Mauritius, Kenya and Namibia. In addition, South Africa has membership of the SADC, African Competition and BRICS fora. The authorities have also benefitted greatly from their active participation in ICN and UNCTAD networks and their staff continue to receive extensive training from leading world authorities and experts. The authorities learn from others and take an active lead in passing on their experience and challenging orthodox views.


Continue Reading South Africa: a citizen in the global village of competition law

This post was originally published as a bulletin on Fasken.com under the title “Unpacking the Competition Amendment Bill: Market Inquiries“.

The Competition Amendment Bill seeks to address two key structural challenges in the South African economy: concentration, and the racially-skewed spread of ownership of firms in the economy.

At the 11th Annual Competition Law, Economics and Policy Conference in September 2017, the Minister of Economic Development, Ebrahim Patel, made the following comment when explaining how economic concentration might be tackled:

It seems to me to be better that it be done through the trusted and predictable processes of competition regulation and its sound institutions than that it be left to laws that simply mandate the breakup of companies irrespective of the economic logic…”.

Market inquiries are seen as one of the five priorities in addressing this objective.  The Background Note published with the Amendment Bill states –

The package of amendments… envisage that market inquiries will become the chief mechanism for analysing and tackling the structural problems in a market, thereby advancing the purposes of the Act. The proposed amendments to the chapter relating to market inquiries will enhance the market inquiry process and will ensure that its outcomes include measures to address concentration and the transformation of ownership.


Continue Reading South Africa: Unpacking the Competition Amendment Bill – Market Inquiries

On October 26, 2017, the Canadian Competition Bureau (“Bureau”) released for public comment a revised version of its Immunity Program, under which a party may receive immunity from criminal prosecution if the party is the first to disclose an offence and agrees to cooperate with the Bureau’s investigation and prosecution of others. The revisions, discussed below, has led to comments and concerns from, among others, the CBA National Competition Law Section and the ABA Section of Antitrust Law. These comments and concerns are discussed below.

According to the press release, the program is being updated to increase transparency and predictability in light of legal and policy developments.

The Bureau has advised that the changes are prompted partly by the outcome of recent unsuccessful prosecutions and include the following:

  • Interim Grant of Immunity: Documentary and testimonial evidence will be provided under an interim grant of immunity (IGI). Final immunity will be provided when the applicant’s cooperation and assistance is no longer required.
  • End of Automatic Corporate Immunity for Directors, Officers and Employees: Automatic coverage under a corporate immunity agreement for all directors, officers and employees will no longer be provided. Instead, individuals that require immunity will need to demonstrate their knowledge of the conduct in question and their willingness to cooperate with the Bureau’s investigation.
  • Greater Use of Recordings: Witness interviews may be conducted under oath and may be video or audio recorded. Proffers, statements made by an applicant (usually through counsel) to the Bureau where the applicant is expected to reveal its identity and describe in detail the anti-competitive activity, may also be audio recorded.
  • Privileged Documents: Non-privileged records from companies’ internal investigations will be treated as presumptively disclosable facts in the possession of cooperating parties. And while privileged records will continue to be protected from disclosure, applicants will now be required to justify their claims of privilege.


Continue Reading Proposed Revisions to the CCB’s Immunity Program: Minor Recalibration or Significant Shift?

One might think that competition law would applaud a firm that submits an independent and competitive bid, in response to a tender aimed at lowering prices.  Recent experience in South Africa suggests that this is not always the case, and that such a firm may face investigation by the competition authorities precisely because it won the competitive tender.

In October 2017, the South African Competition Commission announced that it has initiated, and is investigating, a complaint of abuse of dominance by Vodacom, the country’s largest cellular network services provider.

The subject of the complaint is a four year exclusive contract, in terms of which Vodacom will supply mobile telecommunications services to 20 government departments.

Although Vodacom bid for the contract in a competitive tender process, the Commission “is of the view” that the contract will (1) further entrench Vodacom’s dominant position in the relevant market; (2) raise barriers to entry and expansion in the relevant market; (3) distort competition in the market; and (4) result in a loss of market share for other network operators.

Leaving aside the merits of the complaint, the announcement is interesting and controversial for a number of reasons.  In particular, it raises important questions about the Commission’s advocacy strategy, and about the obligations on business when participating in significant tenders.


Continue Reading South Africa: When a competitive bid is not enough

Merger clearance in South Africa is not easy, nor quick. That may be a take-away from observing the recent clearance by the South African authorities of the DowDuPont global merger of equals covering markets for agricultural products, material sciences and chemicals as well as specialized health and electrical products. The merger was cleared some 15 months from the date of filing and then subject to detailed conditions.

We know that each merger will present its own features and issues. But, as in other multinational mergers considered by the competition authorities, certain points arise from the present merger to be considered by those who may be involved in similar transactions.

First, it is important to understand the counterfactual and theory of harm you are dealing with. The counterfactual, a term used to describe the likely position the relevant markets would be in absent the merger, is a necessary and legislatively mandated tool for merger evaluation. For the authority to determine whether the proposed merger will substantially lessen or prevent competition, it must understand fully what the market would look like without the merger. The Commission can then evaluate the merger based upon a theory of harm appropriate to the circumstances. This means they will assess what possible harm to competition will arise from the merger.

If the counterfactual is not clear, or is based upon speculation only, the theory of harm cannot be substantiated. Moreover, in that case, any remedies which are proposed – whether by the parties or the Commission – to address the theory of harm cannot be properly evaluated. This is far from an exact science, especially as one is seeking to predict future behaviour of the parties and others, in markets which are dynamic and environments which change.


Continue Reading South Africa: More Merger Lessons

(The full version of this bulletin was originally published on Fasken.com – “The Competition Commission’s Market Inquiry into Data Services” – September 12th, 2017.)

On 18 September 2017, the Competition Commission is expected to commence a market inquiry into data services in South Africa. This is the sixth market inquiry to

The Canadian Competition Tribunal recently dismissed a jurisdictional challenge by HarperCollins to the Commissioner of Competition’s application for an order prohibiting the implementation of an alleged agreement between HarperCollins and other e-book publishers.  The Commissioner’s application is under section 90.1 of the Competition Act (“non-criminal agreements between competitors”).  It alleges, broadly speaking, that in

calgary-1751847_1920The Competition Bureau (Bureau) announced on December 7, 2016 that the Commissioner of Competition (Commissioner) had reached a settlement with Moose International Inc. (Moose) regarding his concerns over Moose’s “Made in Canada” advertising and labelling with respect to certain of its premium brand parkas.  The settlement brings to an end legal proceedings between the parties