New Developments Of Interest
Update On The Competition Amendment Bill
The Portfolio Committee on Economic Development has invited the public to submit written comments on the Competition Amendment Bill 2018 (the Bill) by
17 August 2018. Public hearings to discuss the Bill will also be held in Parliament on 28 and 29 August 2018. Our recent client alert setting out the key amendments proposed by the Bill is available
here.
[Source]
Health Market Inquiry Provisional Report Published
The Health Market Inquiry (HMI) has published its Provisional Findings and Recommendations Report (the Provisional Report). The HMI has stated that its key provisional findings indicate that the market is characterised by high and rising costs. The HMI has made a number of preliminary recommendations and has invited stakeholders to provide comments on the provisional findings and proposed recommendations by 7 September 2018. A copy of the full report and all related documents can be accessed
here.
Local News
Agribusiness, Food & Beverages: Updates & Developments
In the agribusiness, food and beverage sector, there are two developments of interest:
- The Competition Commission (Commission) has referred Technical Systems (Pty) Ltd and CGC Industries (Pty) Ltd, trading as RTS Industries (Pty) Ltd (RTS), to the Competition Tribunal (Tribunal) for prosecution. Both companies are active in the market for the production and supply of certain machinery to the international poultry feeding market. The Commission has alleged that the companies divided markets by allocating territories and that it was agreed between the parties that RTS would exit the market throughout the world. RTS has subsequently applied for leniency.
- The Tribunal has approved a merger in terms of which BASF SE (BASF) will acquire the Divestment Business of Bayer AG (Bayer). The assets being transferred from Bayer to BASF are those assets being divested pursuant to undertakings by Bayer to the United States Department of Justice (DOJ) and the European Commission (EC) in relation to the Bayer Aktiengesellschaft and Monsanto Company merger.
[Source] and
[Source]
Mining: Mapochs Mine Merger Prohibited
The Commission has prohibited a small merger in terms of which IRL (South Africa) Resources Investment (Pty) Ltd intended to acquire the assets of Mapochs Mine (Pty) Ltd (Mapochs Mine), which is currently under provisional liquidation. The Commission found that the merged entity will have the ability and incentive to foreclose downstream processors of vanadium bearing ore, and that as a result of this foreclosure, there will also be a detrimental effect on public interest with particular reference to the effect on the mining industry and the ability of national industries to participate in international markets.
[Source]
Regulatory: Competition Commission Conference To Be Held In November
The Commission will be hosting its 12th Annual Conference on Competition Law, Economics and Policy on 5 and 6 November 2018, in Johannesburg. The theme of this year's conference is: 20 Years of Competition Law in South Africa: Key Milestones, Challenges and Developments. The deadline for submissions for inclusion in the conference programme (full papers) is 14 September 2018.
[Source]
Sport: Football Agent Pleads Guilty To Price-fixing
Quality Talent Sports (Pty) Ltd (QTS), a sports agency representing players and coaches in the Premier Soccer League, has entered into a settlement agreement with the Commission. QTS has admitted to fixing the price of commission fees and fixing trading conditions, and has agreed to pay an administrative penalty of ZAR 114,168.84. The settlement agreement has been referred to the Tribunal for confirmation.
[Source]
Transport: Updates & Developments
In the transport sector, there have been two developments of interest:
- The Tribunal has confirmed a settlement agreement between the Commission and Baxter International Movers CC (Baxter). Baxter and Retief Transport CC admitted to engaging in price-fixing, market division and collusion in relation to a 2008 Eskom tender. Baxter agreed to pay an administrative penalty of ZAR 24,506.64. A copy of the settlement agreement is available
here.
- The Competition Commissioner has remarked that the three vessel owners, who recently admitted to price-fixing and collusive tendering, should be considered for criminal prosecution. These vessel owners transport passengers between the Robben Island Museum and the V&A Waterfront in Cape Town. The Commissioner said that the Robben Island museum deserves to be treated with great pride and respect and that the actions of the vessel owners exhibited distain for the country’s history.
[Source] and
[Source]
Rest Of Africa News
Botswana: Competition Law Scrunitised
The United Nations Conference on Trade and Development (UNCTAD) has facilitated a voluntary peer review of Botswana's competition law and policy. The review was undertaken by experts from South Africa, Kenya and the United States of America. Botswana's Minister of Investment, Trade and Industry noted that while peer reviewers identified some points for improvement in the scope and application of Botswana's competition law and policy, the government accepted the report and welcomed its recommendations.
[Source]
COMESA: Tunisa And Somalia Officially Join COMESA
The COMESA Competition Commission has released a notice confirming that the Republic of Tunisia and the Federal Republic of Somalia have been admitted as Member States of COMESA. Accordingly, the COMESA Competition Regulations of 2004, and its accompanying rules, shall be enforceable in Tunisia and Somalia with immediate effect. A copy of the notice can be accessed
here. COMESA now comprises of 21 Member States.
ECOWAS: Regional authority established
On 12 July 2018, the Economic Community of West African States (ECOWAS) announced the establishment of the ECOWAS Regional Competition Authority (ERCA). The Gambian President has inaugurated the ERCA headquarters in Bijilo, Gambia. The ERCA has recognised the role played by UNCTAD in assisting it to reach this stage. We will keep you updated on all further developments relating to this new regional competition authority.
[Source],
[Source] and
[Source]
Kenya: Merger Between Vivo Energy & Engen Approved
The Competition Authority of Kenya (CAK) has conditionally approved the acquisition of Engen International Holdings (Mauritius) Ltd (Engen) by Vivo Energy Holding B.V. The parties to the transaction are both involved in the importation and sale of petroleum products. The merger was approved subject to a number of conditions, including that the merged entity divests one of its Engen retail outlets to a player currently not operating in this area or to a new entrant, and that the merged entity honors all existing contracts with its small and medium enterprise suppliers.
[Source]
Namibia: Abuse Of Dominance Case Against Namib Mills Continues
The Namibia Competition Commission (NaCC) has referred Namib Mills Ltd (Namib Mills) to the Windhoek High Court for allegedly abusing its dominance in the market for the production and supply of wheat flour. The NaCC has asked the court to impose an administrative penalty of N$ 51 million (approximately ZAR 49 million) on the company. The NaCC alleges that Namib Mills concluded loan agreements with bakeries, which included a clause requiring that the bakeries exclusively purchase their wheat flour from Namib Mills.
[Source] and
[Source]
Zambia: Regulation Of Bank Charges Raises Concerns
The Bankers Association of Zambia (BAZ) has said that the Zambian Finance Minister's intention to regulate bank charge rates will contravene competition law in Zambia. The BAZ has said that the pricing of products for each bank is usually based on the cost of their infrastructure and that the public should shop around for banks with lower prices. The BAZ has also requested that it be consulted before such legislation is passed.
[Source]
International news
European Union: Updates & Developments
In the European Union, there are two developments of interest:
- The EC has fined Google EUR 4.34 billion (approximately ZAR 61 billion) for breaching EU anti-trust rules. This is the highest anti-trust penalty ever imposed. The EC found that, among other things, Google has required manufacturers to pre-install the Google Search as a condition for licensing Google's app store and made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices. Google must now bring the conduct to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.
- The EC has taken four separate decisions to fine Asus, "Denon & Marantz", Pioneer and Philips a total of EUR 111 million (approximately ZAR 1.7 billion) for imposing fixed or minimum resale prices on their online retailers. The EC said that the companies restricted the ability of their online retailers to set their own retail prices for widely used consumer electronics products such as kitchen appliances, notebooks and hi-fi products.
[Source] and
[Source]
United States Of America: Updates & Developments
In the USA, there are two developments of interest:
- The DOJ has filed an appeal against the approval of the multi-billion dollar merger between AT&T Inc. and Time Warner Inc. The DOJ also has filed a request to have the content of "bench conferences" revealed. Following the DOJ's request, the judge who presided over the trial has allowed for the release of the transcripts, but has left 50 excerpts of the transcripts under seal. Last year, the DOJ attempted to block the merger due to competition concerns.
- President Trump has criticised the EU following the EUR 4.34 billion fine imposed on Google. The President tweeted that the European Union "has taken advantage of the US, but not for long", and accused the EU of being an economic "foe" of the US.
[Source],
[Source] and
[Source]
Our Recent Work
Little Manhattan Development Merger Approved
The Commission has unconditionally approved the proposed transaction whereby IHS Fund II SA Rental Trust 2 (Trust 2), intends to acquire Extensions 14 & 16 and portions 534 & 551 of the Little Manhattan Development in Lotus Gardens Pretoria West (Little Manhattan).
Trust 2 is controlled by IHS Fund II SA PVE, a private equity fund which invests in affordable rental housing in the low and moderate income residential sector. The fund is an en commandite partnership controlled by IHS Fund II SA GP (Pty) Ltd, which in turn is controlled by International Housing Solutions S.a.r.l, a Luxembourg-based company. Little Manhattan comprises affordable housing units and the remaining land located in Lotus Gardens, Pretoria West.
The Commission found that the merger is unlikely to substantially lessen or prevent competition and does not raise any public interest concerns.
Shawn van der Meulen and
Sarah Manley acted for the merger parties.
New Largo Coal Merger Approved
The Tribunal has unconditionally approved a merger whereby New Largo Coal (Pty) Ltd (New Largo Coal) intends to acquire the New Largo Business of Anglo American Inyosi Coal (Pty) Ltd (AAIC).
New Largo Coal is jointly controlled by Seriti New Largo (Pty) Ltd and the Industrial Development Corporation of South Africa Ltd. The New Largo Business comprises a coal mining project under development, a closed colliery and a conveyor belt project also under development. These relate to the prospective mining of coal and supplying it principally to the Eskom Kusile Power Station. New Largo Business is controlled by AAIC which is in turn controlled by Anglo South Africa (Pty) Ltd.
The Tribunal found that the merger is unlikely to substantially lessen or prevent competition and does not raise any public interest concerns.
Daryl Dingley, Betty Mkatshwa and
Makati Seekane acted for the merger parties.
