In recent months, the Minister of Trade, Industry, and Competition has published several block exemption regulations in terms of section 10(10) of the Competition Act, 1998.
An exemption is a regulatory tool that allows firms to conclude agreements or engage in practices that would otherwise be prohibited under the Act, to advance competition objectives. Sections 10(1) to 10(9) of the Act provide for the exemption of agreements, practices or categories of agreements or practices on application to the Competition Commission. A successful application for exemption must show that the agreement(s) or practice(s): (i) are essential to the achievement of the socio-economic or political objectives listed in section 10(3)(b) of the Act; (ii) are necessary for the exercise of intellectual property rights; or (iii) relate to the activities of a professional association.
Block exemptions in terms of the Competition Act
A successful exemption application may lead to a category-wide or industry-wide exemption. For example, in 2010, the Commission granted a short-term exemption for certain categories of agreements and practices to the South African Petroleum Industry Association (SAPIA) and its members to allow the petroleum industry to collaborate to meet the anticipated demand for liquid fuel during the 2010 FIFA World Cup. In a loose sense, this is a "block", or category exemption.
However, a true block exemption mechanism was only introduced in 2019 by the insertion of section 10(10) into the Act. This provision empowers the Minister, after consulting the Commission, to exempt a category of agreements or practices in order to give effect to the purposes of the Act. No application process is required: section 10(10) allows the Minister to act proactively and unilaterally (subject to the consultation requirement, the requirement to further the objectives of the Act and applicable public law requirements).
The agility afforded by section 10(10) has proved useful where urgent or systemic interventions are required and protracted case-specific assessments are impractical. For instance, the section's first use, in March 2020, enabled concerted conduct in the healthcare sector (followed swiftly by the banking, retail property and hotel sectors) to alleviate the effects of the Covid-19 pandemic.
More recently, the May 2023
Energy Suppliers Block Exemption enables collaboration among energy suppliers to ease constraints on the national electricity grid. In both cases, section 10(10) was used to fast-track industry collaboration in response to crises. The June 2024
Block Exemption Regulations for Small, Micro and Medium-Sized Businesses aim to promote the participation of SMMEs in the economy by exempting agreements relating to research and development, production, joint purchasing, joint selling, commercialisation, standardisation, and collective negotiations with large buyers or suppliers. SMMEs must apply to benefit from the exemption, with applications being determined within 30 days – again highlighting the flexibility of section 10(10).
Recent block exemptions
In February 2025, draft regulations governing the
Interim Block Exemption for Tariffs Determination in the Healthcare Sector were published for comment. Ostensibly designed to contribute to the affordability of healthcare, these regulations propose to exempt the collective determination not only of tariffs for healthcare services, but also of standardised diagnosis, procedure, medical device and treatment codes, quality metrics, medicines formularies, and treatment protocols and guidelines. Unusually, the regulations propose the establishment of a Multilateral Negotiating Forum and a Tariffs Governing Body, both controlled by the National Department of Health.
On 8 May 2025, the
Block Exemption for Ports, Rail and Key Feeder Road Corridors was published in response to South Africa's transport and logistics infrastructure challenges. Collaboration is permitted in defined instances, depending on whether the aim is to address difficulties relating to ports, railways, or road corridors.
On the same day, draft regulations for the
Block Exemption for the Implementation of Phase 2 of the Sugar Master Plan were published for comment.
These are aimed at facilitating collaboration in the sugar value chain, including through coordination on pricing methodologies, to stabilise and grow the domestic sugar industry and mitigate adverse effects of the sugar tax and declining local demand. The regulations also propose the appointment of an independent facilitator by the Department of Trade, Industry, and Competition to oversee certain collective determinations.
Parameters of the section 10(10) exemption powers
The varied content of these examples demonstrates that the block exemption powers in section 10(10) of the Competition Act offer a flexible and expedient mechanism for advancing economic policy and assisting industries facing diverse challenges.
However, while the benefits of section 10(10), which is broadly aligned with similar provisions in other jurisdictions, are clear, it is important that the discretion it affords is exercised in a measured and principled manner. This avoids enabling inappropriate political intervention under the guise of competition regulation. This caution is potentially relevant to the draft healthcare sector regulations. The establishment of new regulatory bodies overseen by the National Department of Health and proposed to be empowered – by way of competition regulation – to negotiate, not only on tariffs, but on a wide range of healthcare-related matters, is far-reaching. Submissions from various stakeholders have pointed out that these provisions may exceed what is lawfully permissible under the Act.
The establishment and exercise of the powers afforded by section 10(10) to craft effective responses to economic challenges is to be welcomed. However, it is essential to guard against the blurring of lines between industrial policy and broader political objectives, on the one hand, and what is permitted under competition regulation, on the other. Ultimately, block exemptions must further the objectives of the Competition Act. To withstand legal scrutiny, they must remain within the legislative bounds of section 10(10).
