NATIONAL TRAINING WORKSHOP ON
COMPETITION POLICY AND LAW FOR
MOZAMBIQUE
KASTURI MOODALIYAR
SENIOR LECTURER IN COMPETITION LAWUNIVERSITY OF WITWATERSRAND
SOUTH AFRICA
[email protected]
WHAT IS COMPETITION POLICY
AND COMPETITION LAW?

The term “competition policy” is sometimes
used to describe an array of government
policy measures that influence competition in
domestic markets. On that broad definition,
policies regarding tariff protection,
deregulation and direct foreign investment,
for example, would come within the ambit of
competition policy.(UNCTAD 2004)
WHAT IS COMPETITION POLICY
AND COMPETITION LAW?

Competition law is intended to eliminate or
curtail restrictive business practices, which
hinder or prevent firms from competing freely
with one another in domestic markets. The
law recognises that, in some circumstances,
the benefits to the community from a
particular anti-competitive agreement or anticompetitive conduct will be greater than the
detrimental effects that it causes.
Why do we need a competition
Policy?

We need competition policy because if
firms are unmonitored, they may resort
to actions that increase their profits but
harm society.
How do we analyse competition
policy?

Competition policy requires both legal
an economic analysis. Legal- being the
interpretation and application of the
Competition Act and Economic analysis
provides valuable insights into market
structures and business practices.
Brief history of Competition Policy
in SA

Maintenance and Promotion of
Competition Act 96 of 1979

Competition Act No 89 of 1998 (as
amended), (the “Act”) which came into
operation on 1 September 1999.
Objectives of competition policy

The Preamble to the Act states that:
“apartheid and other discriminatory laws and
practices of the past resulted in excessive
concentrations of ownership and control
within the national economy, inadequate
restraints against anti-competitive trade
practices, and unjust restrictions on full and
free participation in the economy by all South
Africans.”
Purpose of the Act
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(a) to promote the efficiency, adaptability and development of
the economy;
(b) to provide consumers with competitive prices and product
choices;
(c)
to promote employment and advance the social and
economic welfare of South Africans;
(d) to expand opportunities for South African participation in
world markets and recognise the role of foreign competition in
the Republic;
(e) to ensure that small and medium-sized enterprises have an
equitable opportunity to participate in the economy; and
to promote a greater spread of ownership, in particular to
increase the ownership stakes of historically disadvantaged
persons”.
The structure of the Competition
Act
Competition Commission
(“Commission)
 Competition Tribunal (“Tribunal”)
 Competition Appeal Court (“CAC”).

All three organisations are completely
independent of each other.
The Competition Commission

1.The organizational structure of the
Commission
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2.The role of the Competition Commission

3.How to bring a matter to the attention of the
Competition Commission
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4. The Competition Commission’s power to
summons for documents and to conduct search
of premises and seizure of documents.
The organizational structure of the
Commission

COMMISSIONER

Deputy Commissioner

Compliance
Mergers & Acquisitions
Enforcement and Exemptions
Corporate Services
Policy & Research Legal Services
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The role of the Competition
Commission
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implement measures to increase market transparency;
implement measures to develop public awareness of the provisions of this Act;
investigate and evaluate alleged contraventions of chapter 2 (prohibited
practices);
grant or refuse applications for exemption in terms of chapter 2;
authorise, with or without conditions, prohibit or refer mergers of which it
receives notice in terms of chapter 3 (merger control);
negotiate and conclude consent orders;
refer matters to the Competition Tribunal, and appear before the Tribunal;
negotiate agreements with any regulatory authority to co-ordinate and
harmonize the exercise of jurisdiction over competition matters within the
relevant industry or sector, and to ensure the consistent application of the
principles of this Act;
participate in the proceedings of any regulatory authority;
advise and receive advice from any regulatory authority;
review legislation and public regulations and report to the Minister of the DTI
concerning any provisions that permits uncompetitive behaviour; and
deal with any matter referred to it by the Tribunal.
How to bring a matter to the
attention of the Competition
Commission
Complainant files CC1 complaint or
Commissioner initiates complaint
 1 year to investigate
 Notice of Referral or Notice of NonReferral
 CC refers to the Tribunal or
 Complainant may refer to the Tribunal
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The role of the Adjudicative
institutions in South Africa
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1.
2.
3.
Competition Tribunal
Competition Appeal Court
Supreme Court of Appeal
Competition Tribunal
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 adjudicate on any prohibited conduct and to determine
whether the prohibited conduct has occurred and if , to impose
any remedy provided for in this Act;
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 adjudicate on any other matter that may, in terms of this Act,
be considered by it, and make any order provided for in this Act;
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 hear appeals from, or review any decision of, the Competition
Commission that may, in terms of this Act, be referred to it; and
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 make a ruling or order necessary or incidental to the
performance of its functions in terms of this Act.
Competition Tribunal
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forbid a proven prohibited practice
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order a firm or person to supply or distributed goods or
services to another firm or person
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impose an administrative fine
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prohibit any merger agreement
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order divestiture
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declare the conduct of a firm to be a prohibitive practice
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declare the whole or part of an agreement to be illegal
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order access to an essential facility
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confirm a consent agreement as an order of the Tribunal
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approve any breach of its rules and procedures, if good
reason is shown.
Competition Appeal Court

The CAC may confirm, amend or set
aside a decision or order of the Tribunal
or remit a matter to the Tribunal for a
further hearing on any appropriate
terms
Supreme Court of Appeal

American Natural Soda Ash Cooperation and another v Competition
Commissioner and others

Case No 554/03. www.comptrib.co.za
Restrictive Practices
{Horizontal relationship}
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Manufacturer-----Manufacturer
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Distributor--------Distributor
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Retailer----------------Retailer
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End User--------- End User
Abuse of Dominance
Market power is defined in the Act as
“the power of a firm to control prices, or
to exclude competition or to behave to
an appreciable extent independently of
its competitors, customers and
suppliers”.
Sanctions and Remedies
Administrative Penalty and consent
orders
Leniency and whistleblowers
Administrative Penalty and consent
orders

First time occurrence and repeated breaches certain
prohibited practices;
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Failure to notify a merger;
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Implementing a merger which the Commission or the
Tribunal had prohibited;
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Implementing a merger contrary to the conditions
imposed by the Commission or the Tribunal
Fines
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The nature, duration, gravity and extent of the contravention;
Any loss or damage suffered as a result of the contravention;
The behaviour of the respondent;
The market circumstances in which the contravention took
place;
The level of profit derived from the contravention;
The degree to which the respondent has co-operated with the
Commission and the Competition Tribunal; and
Whether the respondent has previously been found in
contraventions of this Act.
Consent Orders

The Respondent and the Commission
may negotiate a consent order to agree
on the terms of an appropriate order,
during, on or after the completion of the
investigation of a complaint.
The size of penalties recently
imposed
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Federal mogul--R 3 million
SAA--R 45 million
Toyota--R 12 million
Board of Healthcare Funders--R 20 million
South African Medical Association--R 900 000
Hospital Association of SA--R 4.5 million
Estate Agents--R522 400
Leniency for “whistleblowers”
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Corporate Leniency Policy