Update On The Competition Amendment Bill
"B" Version of the Competition Amendment Bill 2018 (the Bill) was passed by the National Assembly on 23 October 2018. A summary of important additional proposed amendments in the "B" version of the Bill, particularly in relation to the sections on abuse of dominance can be accessed here. The Bill is currently at NCOP level and comments on the latest version are due on 7 November 2018.
New Judgments Of Interest
CAC orders Commission to disclose documents
The Competition Appeal Court (CAC) has upheld an appeal by Continental Tyres South Africa (Pty) Ltd and Goodyear South Africa (Pty) Ltd (collectively the appellants). The appeal was against a decision of the Competition Tribunal (Tribunal) dismissing the appellants' application for disclosure by the Competition Commission (Commission) of three categories of documents - correspondence between the Commission and complainant, correspondence between the Commission and leniency applicant, and transcripts of interrogations conducted by the Commission. The Commission contented that the documents were protected from disclosure by litigation privilege, alternatively, that the documents constituted restricted information in terms of the Competition Act. The CAC held that the Commission had failed to adduce evidence to make out a case for privilege, and that the Tribunal erred when applying the rule of restriction to litigants. The CAC found that the Tribunal's decision cannot be allowed to stand and ordered the Commission to disclose the documents requested to the appellants.
A copy of the decision is available
Agribusiness, food & beverage: Country Bird merger approved
The Commission has conditionally approved a merger whereby Country Bird Holdings (Pty) Ltd (CBH) intends to acquire Opti Agri (Pty) Ltd (Opti Agri). The Commission received concerns from the National Union of Food Beverage Wine Spirits and Allied Workers (NUFBWSAW) that its members at Opti Agri may forfeit some benefits currently enjoy by virtue of Opti Agri being part of the Bargaining Council for the Grain Co-Operative Industry. The Commission imposed conditions that aimed to ensure that, post-merger, the employees of Opti Agri will not forfeit any rights and benefits which accrue to them in law.
Financial services: Investec higher education merger approved
The Tribunal has conditionally approved a proposed transaction in terms of which IAPEF2 Education Holdings Ltd (IAPEF2) intends to purchase shares in RZT Zelpy 4472 (Pty) Ltd (RZT). IAPEF2 is ultimately owned by Investec Ltd (Investec), while RZT is a holding company for a number of subsidiaries that provide higher education and training in South Africa, collectively referred to as the Richfield Group. The merger is the first of two transactions aimed at transferring control of the Richfield Group to Investec. The merger was approved subject to the condition that the merging parties notify the Commission of the second transaction when it occurs.
Mining: Sibanye and Lonmin hearing postponed
The Tribunal's hearing into the proposed merger between Sibanye Gold Ltd and Lonmin Plc has been postponed in agreement with all the parties to the matter. The hearing will now take place between 12 and 16 November 2018.
Oil & gas: Updates & developments
In the oil and gas sector, there are two developments of interest:
- The Commission has referred five Liquid Petroleum Gas (LPG) companies to the Tribunal for prosecution. The Commission has alleged that the companies agreed on the amount to be paid as a deposit fee for LPG cylinders by first time buyers.
- The Commission has extended the exemption granted to the South African Petroleum Industry Association (SAPIA) for a period of six months until March 2019. The exemption has been extended a number of times since 2016 and covers a wide range of agreements and practices, which SAPIA contends are required to ensure the continuity and stability of liquid fuel supply to various sectors and geographic locations in the South African economy.
Regulatory: Updates & developments
There are three developments of interest pertaining to the Commission:
- South Africa has been elected as chair of the African Competition Forum (ACF) for the third consecutive term. ACF consists of 31 members and five regional competition agencies. ACF aims to promote the adoption of competition principles in the implementation of national and regional economic policies of African countries.
- The Commission is hosting the International Competition Network Unilateral Conduct Workshop on 1 and 2 November 2018 in Stellenbosch, Western Cape. The ICN comprises of 104 competition agencies and has been in operation for 17 years.
- The Commission is hosting its 12th Annual Competition Law, Economics and Policy Conference on 5 November 2018 at the University of Witwatersrand in Johannesburg. The theme for this year's conference is
"20 years of Competition Law in South Africa."
Retail: School uniform settlement agreement hearings
The Tribunal has postponed its hearing into settlement agreements between the Commission and four private schools. In terms of the proposed settlement agreements, the schools are agreeing to seek ways in which their school uniforms can be standardised to allow parents an opportunity to buy certain components of the uniforms from general retailers.
Telecoms, media & technology: Updates & developments
In the telecoms, media and technology sector, there are three developments of interest:
- The Tribunal has dismissed allegations of collusive tendering and price-fixing against two brand activation firms - Geometry Global (Pty) Ltd and Vaxiprox (Pty) Ltd. The charges relate to a 2014 tender issued by South Africa Tourism. The Tribunal found there was no evidence of subverting competition in the tender process, but warned companies claiming to operate as joint ventures that
"whispered agreements at side meetings are poor substitutes for formalised memorandums of understanding or joint venture agreements". A copy of the decision is available
- The Commission held public hearing as part of its Data Services Market Inquiry between 17 and 19 October 2018. The panel consisted of the Commission’s Chief Economist, Liberty Mncube; Chief Legal Counsel, Bukhosibakhe Majenge; and Head of Inquiry Technical Team, Jason Aproskie. The inquiry is expected to be completed by the end of March 2019.
- The Tribunal has confirmed a settlement agreement between the Commission and Natal Witness Publishing and Printing Company (Pty) Ltd (Natal Witness). In terms of the settlement agreement, Natal Witness has agreed to pay a penalty of ZAR 255,528.00 for agreeing to divide markets through a joint venture, in the Howick area in KwaZulu-Natal.
Rest Of Africa News
Angola: Competition Law Regulations passed
On 12 October 2018, Presidential Decree 240/18 approved Competition Law Regulations in Angola. This development follows the passing of Competition Law 5/18 in May 2018 and indicates that an active competition law regime is likely to come into effect in Angola soon.
COMESA: CCC promotes competition law in Uganda
The COMESA Competition Commission (CCC) recently held a training workshop for Ugandan officials, including over 100 district commercial officers, on competition law. George Lipimile, the CCC'S Executive Director, noted that approximately USD 1 million (approximately ZAR 14.6 million) is attributable to Uganda as part of its share of a total of USD 27 million (approximately ZAR 396 million) in filing fees, which has been collected by the CCC since it became oerational in 2013.
Botswana: Buying group exemption rejected
The Botswana Competition Authority (BCA) has rejected an exemption application for a buying group from Choppies Distribution Centre and Payless Supermarket. The applicants contended that the envisaged buying group would enable better purchasing power which would translate into lower prices and better quality products. The BCA found that there was a substantial lessening of competition in the considered market and directed that the parties dissolve the agreement because it has no substantial economic benefits for the public.
Namibia: Corporate Leniency Programme launched
The Namibian Competition Commission has announced the introduction of its Corporate Leniency Programme (CLP). The CLP provides a framework for businesses engaged in cartel conduct to report such activities and hand over evidence in return for lenient treatment during prosecution. The CLP was gazetted on 12 October 2018. A copy of the CLP can be accessed
European Union: Updates & developments
In the European Union, there are two developments of interest:
- The General Court has upheld an appeal by GEA Group AG (GEA) against the European Commission's (EC) decision to fine GEA for participating in a cartel in the market for heat stabilisers. The General Court held that by treating GEA differently from the other undertakings involved, the EC effectively breached the principle of equal treatment without any objective justification. The General Court found that the EC's approach resulted in GEA being liable for a higher share of the fine. The case can be found
- The EC has issued a Statement of Objections to Slovak rail company, ZSSK. The EC alleges that ZSSK obstructed a dawn raid it conducted on the company's premises by providing incorrect information and deleting data from a laptop. The raid formed part of an antitrust inquiry into the rail passenger transport sector. The EC has taken the preliminary view that ZSSK's actions may have infringed its obligations to comply with anti-trust regulations.
India: CCI raids breweries in India
The Competition Commission of India has raided the oﬃces of three beer companies. The search and seizure operation follows a year-long investigation into the companies for price-fixing. It has been reported that one of the three companies filed a leniency application with the regulator, revealing details of the alleged price-fixing.
UK: CMA launches review of audit sector
The Competition and Markets Authority (CMA) has initiated a fast-track review of the audit sector which will primarily focus on the big four accounting firms. The objective of the review is to improve choice and book-keeping standards. A key part of the CMA's investigation will involve determining whether the sector is competitive and resilient enough to maintain high quality standards.
Our Recent Work
Neopak and APL merger approved
The Commission has conditionally approved a merger in terms of which APL Cartons (Pty) Ltd (APL) intends to acquire the Epping (Cape Town) and Port Elizabeth corrugating and converting plants currently owned and operated by Neopak (Pty) Ltd (Neopak). Neopak's other corrugating and paper plants do not form part of the transaction.
Shawn van der Meulen and
Makati Seekane acted for the merger parties.
APL is a partially integrated corrugated packaging company which operates a plant in Worcester, Western Cape. Neopak's corrugating plants in Epping (Cape Town) and Port Elizabeth are used to manufacture corrugated sheet which is then converted into corrugated packaging, principally for use in the packaging and transporting of fresh produce.
The merger was approved subject to employment conditions.
Our Recent Insights
Listen to Daryl Dingley providing insights on regulator search & seizures/dawn raids - interviewed by Radio702 (Part 1 and Part 2) . Also to help you prepare & manage a raid, read about our new alert tool
Daryl Dingley and Elisha Bhugwandeen also recently published an article titled, "Is your business prepared for a dawn raid" - read more