Catch Up With Competition Law Now - January 2019

Update On The Competition Amendment Bill

The Minister of Economic Development recently published draft Price Discrimination and Buyer Power Regulations for public comment (available here). The Regulations indicate the general approach to determine the appropriate factors and benchmarks to give effect to the amendments proposed to the abuse of dominance sections of the Competition Act. A summary of some of the key aspects of the Regulations is available here. Following the conclusion of the commentary process at the end of January 2019, the Ministry will host a set of forums with firms which may be impacted by the proposed amendments. The Regulations indicate that the President will assent to the Competition Amendment Bill 2018 soon after the forums take place.


New decision of interest: exclusive agreements

The Competition Tribunal has imposed an administrative penalty of ZAR20 million on Computicket (Pty) Ltd for abusing its dominance. Computicket is a dominant firm in the market for the provision of outsourced ticket distribution services to inventory providers (such as theatres, concert promoters, sport stadia etc.). The Tribunal was asked to determine whether Computicket abused its dominance by using exclusive agreements with its clients to exclude effective competition in the market. A copy of the Tribunal's decision is available here.

The contracts in question were for a minimum duration of three years, contained a default annual renewal clause and pertained to all events hosted by a client. In addition, an 'all or nothing' policy was adopted by Computicket - in terms of this policy, unless the client agreed to exclusivity there would be no agreement available to them.

The Tribunal found that exclusionary effects were evident with sufficient robustness during the period 2005 to 2010 and that there was limited market entry during this period, which at the beginning and thereafter, coincided with the introduction of the longer-term exclusivity contracts and Computicket's aggressive enforcement of its rights under these contracts. The Tribunal also found that Computicket did not meet the tests for any efficiency defences. Shoprite Checkers (Pty) Ltd, Computicket's owner, has subsequently confirmed that it would lodge an appeal to the Competition Appeal Court against the decision.


Local News

Agribusiness, food & beverage: Updates & developments

In the agribusiness, food & beverage sector, there are two developments of interest:

  • The Commission has prohibited the proposed merger between Ostrich Skins (Pty) Ltd, Mosstrich (Pty) Ltd (Mosstrich) and Klein Karoo International (Pty) Ltd (KKI). KKI and Mosstrich are both active in the supply of ostrich meat, leather and feathers. The Commission found, among other things, that the merger is likely to result in unilateral effects in the market for the supply of ostrich meat and that the merged entity will likely be able to exercise significant market power post-merger.
  • The Tribunal has approved the proposed merger whereby Karan Beef Holdings (Pty) Ltd seeks to acquire Karan Beef (Pty) Ltd and The Karan Beef Feedlot. The merger was approved subject to conditions aimed at providing a means for historically disadvantaged persons to participate in commercial farming activities.
Healthcare: Updates & developments

In the healthcare sector, there are two developments of interest:

  • The Commission announced that the publication of the Health Market Inquiry's (HMI) Final Report has been delayed due to budget constraints. The Commission has suspended the work of the HMI panel and external consultants until the end of the 2018/19 financial year (i.e. 31 March 2019).
  • The Tribunal prohibited a merger between Mediclinic Southern Africa (Pty) Ltd and Matlosana Medical Health Services (Pty) Ltd in the North West province. The merger was initially prohibited by the Commission due to competition and public interest concerns. The merger parties subsequently applied to the Tribunal for the merger to be considered in that forum. The Tribunal concluded that the merger parties did not tender an appropriate remedy to cure the substantial lessening of competition that would arise as a result of the proposed transaction.
Industrials: Settlement agreements confirmed

The Tribunal confirmed two settlement agreements relating to collusive tendering. In terms of the first settlement, Eye Way Trading (Pty) Ltd has agreed to pay a penalty of ZAR 115 000 for engaging in collusive tendering when responding to a tender issued by National Treasury for the supply of fabric used to make uniforms for various government departments. In the second settlement, Casalinga Investments CC t/a Wasterite admitted to colluding on a tender issued by Pikitup SOC. Wasterite has agreed to pay a penalty of ZAR 225 690.

Mining: Sibanye Stillwater / Lonmin merger contested

The merger involving Sibanye Gold t/a Sibanye Stillwater and Lonmin Plc is expected to be contested at the Competition Appeal Court on 2 April 2019. The appeal was launched by the Association of Mineworkers and Construction Union, who allege that the Tribunal failed to take into consideration its submissions on the merger, particularly in relation to employment concerns. The merger parties have extended the longstop date for the transaction to 30 June 2019.

Regulatory: Updates & developments

There have been three developments of interest pertaining to the Competition Act and the Commission:

  • On 25 January 2019, the Minister published amended Regulation 15 of the Competition Commission Rules. The amendment specifies that Rule 15(1) (in terms of which any person, upon payment of the prescribed fee, may inspect or copy any Commission record), does not apply to a record in certain instances. The amendment seeks to bring Rule 15 in line with section 7 of the Promotion of Access to Information Act, 2000. A copy of the Gazette can be found here.
  • The Minister published an amendment to Regulation 10(5) of the Competition Commission Rules (available here). In terms of the amendment, new merger filing fees are effective from 1 January 2019: ZAR 165,000 for an intermediate merger (increased from ZAR 150,000) and ZAR 550,000 for a large merger (increased from ZAR 500,000).
  • In a written response to a parliamentary question, the Minister indicated that the HMI has cost ZAR 196 million over four years. Most of the costs were attributed to human resources and operational costs (approximately ZAR 78.6 million). The Minister has also revealed that the 12 dawn raids carried out by the Commission between April 2015 and November 2017 cost ZAR 58 million.
Retail: Updates & developments

In the retail sector, there are two developments of interest:

  • The Commission referred Computicket and Shoprite to the Tribunal for prosecution. The Commission has alleged that the two companies signed and enforced exclusive agreements in contravention of the Competition Act. This new case is similar to the case against Computicket which has just been decided by the Tribunal (see above), however, the period under investigation is from January 2013 to date and Shoprite has been added as a second respondent.
  • The Commission has urged schools to adhere to the school uniform guidelines issued by government. This follows an investigation concluded by the Commission last year into anti-competitive behaviour involving schools and exclusive contracts with suppliers. The guidelines aim to encourage a competitive bidding process when appointing suppliers.

Rest Of Africa News

Angola: Competition Authority Board appointed

The President of Angola has appointed the Board of Directors of the Competition Regulatory Authority. The Board comprises of Eugenia Chela Pontes Pereira (Chairperson), José Renato Peres Mamede (administrator) and Ana Zulmira da Silva Ramalheira (administrator). These appointments follow the passing of Competition Law 5/18 in early 2018.

Egypt: Updates & developments

In Egypt, there are two developments of interest:

  • The government has submitted a bill for discussion by Parliament's economic affairs committee to amend certain provisions of the Protection of Competition and the Prohibition of Monopolistic Practices Law. It has been suggested that penalties in violation of Article 6 (relating to cartel conduct) be strengthened by imposing a fine of not less than 2% and no more than 12% of the total revenues of the violating person or persons, in the fiscal year prior to the offence.
  • The Egyptian Competition Authority (ECA) has given Apple and its regional distributor 60 days to remove alleged "restrictions" on local distributors. The ECA alleged that Apple managed, through its marketing strategy and contracts, to ban all forms of parallel imports. According to the ECA, Apple's actions resulted in an "unjustified" increase in prices of its products in Egypt.
Eswatini: Taiwan and Eswatini sign MOU

Taiwan's Fair Trade Commission (FTC) and eSwatini's Competition Commission have signed a memorandum of understanding (MOU). The purpose of the MOU is to facilitate cooperation on the implementation of fair trade laws within the respective countries. ESwatini is the first African country and the ninth in the world to sign a MOU with the FTC.

Kenya: Buyer Power Department established

The Kenyan government created a Buyer Power Department within the Competition Authority of Kenya (CAK) to address concerns regarding businesses abusing their influence over suppliers. The Buyer Power Department is empowered to investigate such abuse and may impose fines and/or criminal prosecutions for infringements. The Buyer Power Department will concentrate its initial investigations on the retail sector.

Mauritius: Update on RPM Amnesty Programme

The Competition Commission of Mauritius (CCM) released its first batch of decisions for its Resale Price Maintenance (RPM) Amnesty Programme. Of the 102 applications received, the CCM has accepted the amnesty applications made by a total of 32 applicant-enterprises, granting them immunity for validly reported RPM conduct. The CCM's first batch of decisions concerns 26 resellers (all of which operate in the retail sales of consumer goods segment) and six suppliers.

Morocco: Competition authority operational

In December 2018, members of the Competition Council of Morocco (the Council) were appointed. The Council is now effective and has the power and authority to review merger notifications. Driss Guerraoui has been appointed as president of the Council.

Zimbabwe: Parliament to launch mobile data costs inquiry

The Zimbabwean parliament will begin an inquiry into mobile data costs in February 2019. The committee decided to set up the inquiry after receiving an increased number of consumer complaints related to high charges.


International News

European Union: Updates & developments

In the European Union, there are two developments of interest:

  • The European Commission (EC) fined Guess EUR 40 million (approximately ZAR 609 million) for restricting retailers from online advertising and selling cross-border to customers in other member states. Their distribution agreements were found to contravene the recently implemented geo-blocking rules, allowing Guess to maintain artificially high retail prices in certain European states. Guess obtained a 50% reduction in its fine in return for its cooperation with the EC.
  • According to media reports, the EC may possibly impose two more anti-trust penalties against Google. The third possible fine relates to Google’s AdSense advertising service - the product is being investigated following allegations that it hinders competition for online advertisements. Google is also facing a wider local search complaint. The EC's antitrust unit has sent out a questionnaire to Google's local search competitors in Europe to ascertain whether the changes to Google's algorithms and other practices are adversely impacting them.
Germany: Amazon abuse of dominance investigation launched

Germany's Federal Cartel Office (GFCO) has begun an investigation to examine Amazon's terms of business and practices towards sellers on its German marketplace ( The investigation will probe whether Amazon is abusing its market position to the detriment of sellers active on its marketplace.

India: Breweries seek leniency

Denmark's Carlsberg and India's United Breweries have applied to the Competition Commission of India for leniency following a probe into price-fixing allegations (as reported in our October update available here).

United Kingdom: CMA proposes reforms to audit sector

The Competition and Markets Authority (CMA) has published an update paper outlining serious competition concerns and proposing changes to legislation to improve the audit sector for the benefit of savers and investors. The CMA is proposing legislation to: separate audit from consulting services; introduce measures to substantially increase the accountability of those chairing audit committees in firms, and impose a ‘joint audit’ regime giving firms outside the Big Four a role in auditing the UK’s biggest companies.


Our Recent Work

Actis / Abraaj merger approved

The Tribunal has unconditionally approved a proposed merger in terms of which Actis International Ltd will acquire the management rights held by Abraaj Investment Management Ltd (in provisional liquidation) in respect of several private equity funds.

Robert Wilson, Werner Rys​​bergen and Busisiwe Masango acted for the merger parties.

The Tribunal found that the merger is unlikely to substantially lessen or prevent competition and does not raise any public interest concerns.

AYO Technology / Zaloserve merger approved

The Commission has unconditionally approved the proposed merger whereby AYO Technology Solutions Ltd (AYO) intends to acquire Zaloserve (Pty) Ltd (Zaloserve), the holding company for Sizwe Africa IT Group (Pty) Ltd (Sizwe).

Robert Wilson, Burton Phillips and Busisiwe Masango acted for the merger parties.

AYO is an information and communication technology company and provides services such as big data analytics, systems integration, business process management, software development, internet of things, technology security, clouds solutions and digital transformation. Apart from being an investment holding company, Zaloserve does not conduct any business activities. It holds all the shares in Sizwe, the company which provides services such as fibre and facilities, managed services, systems integration and unified network solutions.

The Commission found that the merger is unlikely to substantially lessen or prevent competition or raise any public interest concerns.

Professional Provident Society Insurance Company / Professional Provident Society Short-Term Insurance Company merger approved

The Commission has unconditionally approved the proposed merger whereby Professional Provident Society Insurance Company Ltd (PPS) intends to acquire Professional Provident Society Short-Term Insurance Company Ltd (PST).

Desmond Rudman and Andriza Liebenberg acted for the merger parties.

PPS is a long-term insurer registered in South Africa and is licenced to provide the following types of long-term insurance products: life insurance, health insurance and disability insurance. PST is a short-term insurer and is licenced to provide the following types of short-term insurance products: motor insurance, liability insurance, property insurance and miscellaneous insurance.

The Commission found that the merger is unlikely to substantially lessen or prevent competition or raise any public interest concerns.

Robor and Macsteel tubes and pipes merger approved

The Tribunal has conditionally approved a merger whereby Robor (Pty) Ltd (Robor) and Macsteel Service Centres South Africa (Pty) Ltd (Macsteel) intend to consolidate their tubes and pipes businesses.

Daryl Di​ngley, Burton Phillips and Andriza Liebenberg acted for the merger parties.

Robor and Macsteel operate in the South African tube and pipe industry, manufacturing and distributing various types of tube and pipes, cold form steel profiles and associated value added products. The Tribunal approved the merger subject to employment conditions.

Webber Wentzel > News > Catch Up With Competition Law Now - January 2019
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