Keep up to date on the most important competition law developments across Africa in February 2021.
Case development of interest: Beefcor matter heard at the Constitutional Court
- South Africa: The Constitutional Court (the Court) has been asked to determine the implications of a withdrawal of a complaint by the Competition Commission (Commission), in an instance where the Commission sought to reinstate the complaint at a later stage, as well as the meaning of ‘completed proceedings’ in terms of the Competition Act. On 23 February 2021, the Court heard an application for leave to appeal by the Commission against decisions of the Competition Appeal Court (CAC) and the Competition Tribunal (Tribunal) dismissing an application for reinstatement of a complaint referral that the Commission had withdrawn against Beefcor (Pty) Ltd and another respondent.
Regulatory: Updates & developments
- Botswana - The Botswana Competition and Consumer Authority (BCCA) prohibited the proposed acquisition of a letting enterprise situated at Tribal Lot 1299 Maun, together with the underlying leases and the right to collect rental, as a going concern from El Alamein (Pty) Ltd by New African Properties Ltd (NAP). The BCCA found, among other things, that the merger will increase concentration in the retail rental space market and increase NAP's dominance.
- The COMESA Competition Commission (CCC) published a new practice note (Practice Note 1 of 2021) clarifying important aspects of its merger control thresholds. This is an important development that will greatly assist merger parties to assess whether transactions meet the CCC's merger filing requirements. Further details are available in our e-alert
- The CCC published a
Cautionary Note on Restrictive Business Agreements. In the note, the CCC indicates its concern that some undertakings operating in the Common Market, have been engaging in, and continue to engage in, agreements that include, among other things, restrictions, restrictive territorial clauses, market allocation. The CCC has warned that it will focus more on hard enforcement through screening, detection, investigation and punishment of offenders.
- The CCC announced that the tenure of Dr George Lipimile who was the Director and Chief Executive Officer (CEO) of the CCC for the past ten years, came to an end on 31 January 2021. Dr Willard Mwemba has been appointed as the Acting Director and CEO of the CCC from 1 February 2021 until a permanent Director is recruited.
- Kenya - The Competition Authority of Kenya (CAK) operationalised an Informant Reward Scheme (the Scheme). The Scheme, effective from 1 January 2021, provides a mechanism for informants to receive financial incentives in exchange for actionable information regarding restrictive trade practices. Any informant who provides credible intelligence leading to the closure of an investigation and the imposition of a penalty, is entitled to 1% of the administrative penalty imposed by the CAK. The CAK also published draft Block Exemption Guidelines and draft Joint Venture Guidelines for public comment.
Retail: Jobs saved in retail mergers
- South Africa: The Tribunal conditionally approved Blue Falcon 188 Trading (Pty) Ltd's (Blue Falcon) acquisition of certain portions and assets of the “John Craig” Business, a Division of Pepkor Speciality (Pty) Ltd (the transferring business). As a result of the merger, 422 jobs were saved. The merger was approved subject to the condition that 422 employees of the transferring business will be transferred to Blue Falcon. Blue Falcon also agreed to a condition that it will use its best efforts to procure the labels it intends to offer at the John Craig stores from local manufacturers.
- South Africa: The Tribunal conditionally approved Devland Cash and Carry (Pty) Ltd's (Devland) acquisition of certain stores owned by Masscash (Pty) Ltd, which is controlled by Massmart Holdings Ltd. As a result of the merger, at least 640 jobs will be saved. The Tribunal imposed a condition that no employees will be retrenched as a result of the merger for a period of nine months. Since Devland is owned and controlled by two historically disadvantaged persons (HDPs), while the target stores are not owned by HDPs, the merger will also have a positive effect on the promotion of a greater spread of HDP and worker ownership in the grocery market.
Telecommunications, media and technology: SA competition authority's heightened focus on digital markets
South Africa - The Commission has published draft Terms of Reference (TOR) ahead of an 18-month inquiry into any potentially anti-competitive aspects of selected digital platforms. Comments on the draft TOR are due before 16:00 on 12 March 2021. Further details are available in our e-alert
here. The Commission also released the
second version of its paper on competition in the digital economy, following submissions on the version published in September 2020. The new version of the paper incorporates stakeholder views and sets out the Commission's strategic actions to achieve a more inclusive digital economy.