Category: competition

This month the Competition Commission, Competition Tribunal and Competition Appeal Tribunal celebrate fifteen years of pursuing the ideal of fair and efficient markets in South Africa.
A look back on one of the most ground-breaking cases the Commission has taken on, known as the Hazel Tau case, which saw the price of antiretrovirals from global manufacturers brought down:

Today, over a decade since lodging that complaint, Tau works for a research programme in health economics at Wits University.

But at the time, the victory at the Commission was bitter-sweet. Many of Tau’s comrades and colleagues lost their lives before antiretrovirals became affordable and widely available.
Read more at enca.com
The authorities’ main anniversary featured Ebrahim Patel, Minister of Economic Development, as keynote speaker.

 

Patel will also consider the extent to which the law, as it stands, allows the competition authorities to break up giants that behave anti-competitively. The pricing practices of dominant firms will also be under scrutiny, to see if amendments are needed to deal with pricing practices considered harmful.

Read more at enca.com
The South African Venture Capital Association is holding a masterclass on merger control on 18 September, following one on abuse of dominance held on the 11th. For a brief Q&A with the convenor of the masterclass, go to www.savca.co.za

 

In tough economic times employment security and protecting consumers’ pockets take on a heightened importance. In mergers, potential job losses especially amongst unskilled and semi-skilled workers, who earn lower incomes, will be of concern. I also expect to see a greater focus on abuse of dominance, in other words single-firm behaviour as opposed to cartels. Recent successful abuse of dominance cases such as Telkom and Sasol set the framework for future investigations.

An opinion piece at Business Day with a focus on excessive pricing, with reference to the recent Tribunal ruling against Sasol:

 

In short, local plastics manufacturers pay an import parity price for polypropylene, the most significant input in production. This is in a market context where there is a greater supply of polypropylene than local manufacturers can absorb. Sasol Chemical Industries exports about half of its production to international markets, notably Asia, where it charges a lower price to manufacturers in those markets. It’s also worth noting that Sasol Chemical Industries is globally a low-cost producer of the input as it enjoys a special cost advantage due to the state’s historical investment in and support for the company.

 

The tribunal heard that the firm’s pricing practice has stunted plastics manufacturers, who are rendered unable to compete with their international counterparts.