WHITE PAPER | HOW WILL THE COMPETITION AMENDMENT BILL AFFECT YOU?

The public hearings on the Competition Amendment Bill (“the Amendment Bill”) have been tabled by Parliament’s Portfolio Committee of Economic Development for 28 & 29 August 2018.

The Competition Amendment Bill, if approved, will amend the Competition Act 89 of 1998 (“the Act). The main objective of the amendments is to address two persistent structural constraints on the South African economy, namely, the high levels of economic concentration in the economy and the skewed ownership profile of the economy. The Amendment Bill aims to address these structural constrains through seven key focus areas.

To read comments on the Amendment Bill, download our latest White Paper below.

JAC MARAIS

Partner
Commercial Attorney

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MISHA VAN NIEKERK

Senior Associate
Commerical Attorney

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COMPETITION TRIBUNAL ENDS MASSMART EXCLUSIVE LEASE SAGA

The Massmart exclusive lease saga, which commenced with Massmart’s complaint to the Competition Commission (“the Commission”) in October 2014, has finally come to an end.

The Competition Tribunal (“the Tribunal”) yesterday upheld exceptions brought by Pick ‘n Pay, Shoprite Checkers and Spar (“the Excipients”) and dismissed Massmart’s complaint that the Excipients’ exclusive lease agreements with various shopping malls were anti-competitive and falls foul of the prohibition on restrictive vertical practices contained in Section 5(1) of the Competition Act 89 of 1998 (“the Act”).

Massmart initially self-referred the complaint to the Tribunal in 2015, following the Commission’s non-referral of Massmart’s 2014 complaint – the Commission put forth its decision to institute an enquiry into the grocery retail sector as the reason for the non-referral. A number of exceptions were raised to this first referral and Massmart was granted an opportunity to amend. Massmart’s amended referral was again the subject of a number of exceptions which were heard by the Tribunal on the 19th of September 2017 and resulted in the complaint finally being dismissed yesterday.

The common thread running through all the exceptions raised was the fact that Massmart’s complaint failed to make out a cause of action in respect of Section 5(1) of the Act – not only did Massmart fail to define the markets with sufficient particularity, it also failed to sufficiently demonstrate an anti-competitive effect. In this regard, the Tribunal stated that the “fact that Game is excluded from malls does not equate to an exclusion of competition if another rival is present…Mere proof of exclusion of a particular competitor does not suffice.

The Tribunal’s approach to exclusive lease agreements as demonstrated in this case, can be summed up by its statement that a “complainant needs to allege more than the existence of a contractual restraint.

by Misha van Niekerk | Associate

JAC MARAIS

Partner
Commercial Attorney

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MISHA VAN NIEKERK

Associate
Commercial Attorney

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INCREASED PENALTIES INTRODUCED FOR CARTEL CONDUCT

Section 13 of the Competition Amendment Act, 2009 came into operation on Thursday, 9 June 2016, by virtue of Proclamation no. 36 of 2016. The aforementioned Section amends Section 74 of the Competition Act, 89 of 1998 (“the Act”) to provide for the following penalties in respect of a contravention of Section 73A of the Act (which Section has criminalised cartel conduct) – a fine not exceeding R500,000 or imprisonment for a period not exceeding 10 years or both.

For further details regarding the Competition Amendment Act, contact Misha van Niekerk | 012 432 6370

Jac Marais

Partner
Commercial Attorney

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Competition Commission appoints panel for retail inquiry

Following on from the Competition Commission’s publication late last year of its Terms of Reference for the Market Inquiry into the Grocery Retail Sector, the Competition Commission (“Commission”) on Thursday, 18 February 2016, appointed Halton Cheadle to head the panel for the Commission’s Market Inquiry into the Grocery Retail Sector. Lulama Mtanga and Lumkile Mondi were appointed as panellists.

The Market Inquiry aims to determine whether or not there are features within the Grocery Retail Sector which may prevent, impact or distort competition within the market. To this end, the Commission has, inter alia, identified the following areas of investigation:

1. how the expansion, diversification and consolidation of national supermarket chains, impacts on small and independent retailers in townships, peri-urban and rural areas;

2. how regulations, including municipal town planning and by-laws, impacts on small and independent retailers in townships, peri-urban and rural areas;

3. how buyer groups impact on small and independent retailers in townships, peri-urban and rural areas;

4. how a number of identified value chains impact on the operations of small and independent retailers
in townships, peri-urban and rural areas;

5. the dynamics of competition between local and foreign national operated small and independent retailers in townships, peri-urban and rural areas;

6. what impact long term exclusive lease agreements has on competition within the grocery retail
market sector.

Now that the Panel has been appointed, we await the publication of its administrative guidelines.
The Commission has previously indicated that it hopes to complete the Market Inquiry by May 2017.

The Grocery Sector Market Inquiry is the third Market Inquiry initiated by the Commission after the Amendment to the Competition Act, 89 of 1998, which provided the legal framework for market inquiries. The Healthcare Market Inquiry and the LPG Inquiry are ongoing.

Issued by Adams & Adams | 22 February 2016

Alexis Apostolidis

Partner & Head of Competition Law Group
Patent Attorney

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