South African competition law
South Africa has a well-developed and regulated competition regime based on best international practice.
South Africa's economic system is predominantly based on free market principles. However, as in most developed economies, competition is controlled.
The Competition Act of 1998 fundamentally reformed the country's competition legislation, substantially strengthening the powers of the competition authorities along the lines of the European Union, US and Canadian models.
The Act provides for various prohibitions on anti-competitive conduct, restrictive practices (such as price fixing, predatory pricing and collusive tendering) and "abuses" by "dominant" firms (firms with a market share of 35% or more).
The Act also entails a notification and prior approval procedure for certain mergers and acquisitions, carries significant penalties for contraventions - and reaches beyond South Africa, applying to economic activity both in and having an effect in the country.
The Competition Commission is responsible for investigating and evaluating mergers and prohibited practices. It has the power to disallow small and intermediate mergers, and makes recommendations on larger mergers to the Competition Tribunal.
Both bodies are independent of the government, although minister of trade and industry appoints the Competition Commissioner and the President appoints the members of the Tribunal.
In terms of the law, the competion authorities can take into account both competitiveness and general public interest - including black economic empowerment - in arriving at their judgments.
In general, the Competition Act seeks to maintain and promote competition in the South African market in order to:
- Promote economic efficiency, adaptability and development.
- Promote employment and general socio-economic welfare.
- Promote a greater spread of ownership within the economy.
- Provide consumers with competitive prices and product choices.
- Ensure that small business have an equitable opportunity to participate in the economy.
- Expand opportunities for South African participation in world markets, while recognising the role of foreign competition within South Africa.
