Competition Policy in South Africa

The 1998 Competition Act heralded a new era of active competition enforcement in South Africa. Since then, South Africa has developed a robust and admirable competition system. To some extent, the enforcement of competition law has contributed to an increase in more affordable goods and services. Furthermore, it has contributed to creating a market environment that encourages economic participation by all South Africans, increases the competitiveness of South African firms, and facilitates inclusive economic development. However, the South African economy remains highly concentrated, strategic barriers to entry protect incumbents, and the spread of ownership and economic participation remain skewed. The competition system has not delivered on all of its promises to address South Africa’s problems. This chapter provides a critical review of many of the developments that helped shape and mature the competition system into one of the most outstanding and path-breaking in the developing world. It also offers reflections on current challenges and opportunities.

The Coca-Cola Company/Coca-Cola Beverages Africa Merger: Lessons for Robust Regional Competition Enforcement

This article uses the Coca-Cola Company/Coca-Cola Beverages Africa merger to illustrate the important role that competition policy should continue to play in the regional and continental integration agenda. The case provides an illustrative example that the structure and reach of firms play a pivotal role in the dynamics of value chains, as well as on the extent to which market power can potentially be exerted within and across countries. Competitive rivalry is necessary for innovation and lower prices, but the playing field needs to be leveled in order for entrants and smaller rivals to make and realize investments, build capabilities, and participate effectively. Competition reforms that take a bottom-up approach and account for the varying levels of development of countries play an integral role in opening up markets for entrants and small rivals, which in turn allow for the objectives of the African Continental Free Trade Area to be realized.

Combatting corruption and collusion in public procurement: lessons from operation car wash

This article examines the question of how a nation can combat corruption and collusion and prevent these practices from plaguing and undermining public procurement processes. This matter is especially important to Brazil where Operation Car Wash exposed widespread corruption and collusion affecting public procurement. Although focusing on Brazil, this article reflects on a broader academic and policy debate as to how a nation can escape from a ‘high-corruption’ equilibrium, especially one strengthened by its interaction with supplier collusion. In particular, whether endemic corruption can be combatted through an invigorated law enforcement push, combined with incremental reform, or whether some ‘big bang’ approach, with complete institutional overhaul, is required to establish a new equilibrium. The article notes that the Brazilian experience provides support for the hypothesis that, where corruption is endemic, better laws and law enforcement may be insufficient on their own to break a cycle and to remove the incentives and opportunities for corruption and collusion that exist. However, it also recognizes that, for many jurisdictions, wholesale big bang reform is unlikely to be feasible. It thus proposes a multi-pronged, and self-reinforcing, set of reforms to trigger change, concentrated on weaknesses diagnosed in the system. In particular, it suggests that where corruption affects public procurement, beyond specific adjustments to procurement, competition and anti-corruption laws, procurers, anti-corruption and competition enforcement agencies need to work closely together to coordinate policies, achieve synergies and to combat incentives and opportunities for corruption and collusion within procurement processes. Such reforms must be combined with measures to tackle broader factors contributing to systemic corruption. Although inspired by the Brazilian case study, the diagnosis and proposed reform strategy provides a workable model for use in other jurisdictions.

Platform mergers and antitrust

Should internet era merger policy differ from industrial era merger policy? Platform ecosystems rely on economies of scale, data-driven economies of scope, high-quality algorithmic systems, and strong network effects that frequently promote winner-take-most markets. Their market dominance has generated competition concerns that appear difficult to assess with traditional merger policy tools. This paper examines the acquisition strategies of the five major U.S. platforms—Google, Amazon, Facebook, Apple, and Microsoft—since their inception. We discuss the main merger and acquisition theories of harm and how these operate differently than in the past. To address merger and acquisition concerns of multi-sided platforms, we develop four proposals that incorporate (i) a new ex ante regulatory framework, (ii) an update of the conditions under which the notification of mergers should be compulsory and the burden of proof should be reversed, (iii) differential regulatory priorities in investigating horizontal versus vertical acquisitions, and (iv) an update of competition enforcement tools to increase visibility into market data and trends.

Towards a World Class Regime—An Overview of Twenty Years of UK Competition Enforcement

Chapter 1 provides an excellent and informed general backdrop for the remainder of the chapters. It explains the objectives of the competition law regime introduced from 1998 to 2002 and the problems that led to the reforms of 2013. It reviews how the regime has performed in each aspect: antitrust, markets, mergers, the appeal system and private enforcement, ministers and the public interest, and concurrent application by regulators. It discusses exit from the EU and the ‘digital challenge’ and it comments on the recent reform proposals from the then chairman of the CMA. It gives an overall assessment and considers the way forward, including the possible effects of the Covid-19 pandemic. It is a must-read for anyone wanting to understand the core aspects and direction of travel of UK competition law in one chapter and sets the scene beautifully for the chapters which follow.

The Emerging Contribution of Director Disqualification in UK Competition Law

Peter Whelan assesses a developing and increasingly significant enforcement tool in the UK competition authority’s armoury in Chapter 11. In it, Whelan notes that the enforcement of UK competition law is deterrence-focused and comprises both criminal and non-criminal (i.e. civil/administrative) elements. The chapter concentrates on the non-criminal enforcement apparatus that has been developed over the last twenty years. More specifically, it critically evaluates a particular enforcement mechanism that has been gaining increasing importance throughout the recent development of UK competition enforcement practice: the use of director disqualification. It first establishes the normative role of director disqualification in the UK’s armoury of non-criminal antitrust sanctions (i.e. its complementing of the deterrent function of corporate antitrust fines), following which it highlights their potential for performing this role effectively. It then outlines the legal basis for the use of director disqualification within the UK and evaluates the policy and enforcement practice to date with respect to such orders, before proceeding to outline some of the insights that the UK director disqualification regime can provide to other jurisdictions. Ultimately it concludes that, on the basis of the promising, albeit nascent, UK experience to date, director disqualification should be seriously considered by jurisdictions that wish to operate a robust competition law enforcement regime.

Human Rights and the UK Competition Act

In Chapter 9, Arianna Andreangeli discusses the approach adopted in the UK towards questions of human rights compliance in UK competition enforcement processes. It examines the nature of competition proceedings in light of Article 6 of the European Convention on Human Rights and the implications that that issue has for the fairness standards applicable to those proceedings. It is argued that while the recognition that competition cases may have a ‘criminal nature’ does not justify the wholesale extension of all the safeguards that the Convention reserves to criminal cases, it nonetheless means that investigated parties are entitled to some basic protections that Article 6 ECHR enshrines. The chapter explores the Competition Appeal Tribunal’s powers of review of infringement decisions and suggests that at the root of the conferral of a power of scrutiny ‘on the merits’ is the need to ensure that the public enforcement competition proceedings are ‘human-rights proofed’. It concludes that, while demands of effectiveness in the application of the UK competition rules cannot be overlooked, maintaining the CAT’s rigorous review role for competition decisions is indispensable for compliance with human rights standards and for the integrity and reputation of the UK competition framework.

Fundamental Rights in EU Competition Enforcement

This chapter assesses the role of fundamental rights in EU competition enforcement. EU competition policy comprises a number of limbs, each with its own peculiarities and rules but together contributing to the objective of protecting (relatively) undistorted competition in the Union's internal market. The key reason why EU competition policy is an interesting and important case study from the point of view of fundamental rights application is enforcement. Unlike in other areas, the EU, in particular the European Commission, wields considerable powers when it comes to the protection of undistorted competition in the internal market. Although the extent of the enforcement powers and their potential impact on fundamental rights differs between the various aspects of competition policy, the field as a whole embodies supranational authority as almost none other. This is so despite the fact that in enforcing competition law the Commission cooperates closely with national competition authorities (NCAs) as part of the European Competition Network (ECN) and that the majority of decisions applying EU antitrust rules are taken by the NCAs.

Competition criminal law: an international and global trend?

Research background: Competition laws have become widespread and as a rule have a sanctioning nature. DANVERS refers an exponential increase in legal systems that introduced competition laws in recent years, accounting for more than 127 jurisdictions hereto. Specifically concerning the trend of criminalizing cartels, SHAFFER and NESBITT consider it due to transnational interests, and SÁNCHEZ defends a link between the economic subsystem as the engine of globalization and the economic law with the latter – where economic criminal law, competition law, financial markets law, among others are included - being subject to strong international influences, and possibly being moreover a sign of democracy. More than 30 jurisdictions already have criminalized cartels and STEPHAN mentions that about 60 jurisdictions already present internal legal solutions combining a reinforcement of sanctions with the figure of leniency, in a “carrot and stick” approach to destabilizing and deterring cartels. Purpose of the article: Considering the cartel criminalization trend in competition law, it is paramount to identify the underlying legal interests as a (global) recognized fundamental value, even if there are particularities adjusted to each legal order, and the purpose of the article is to identify the legal interests and adscription criteria that may be considered and retained as common in competition enforcement. Methods: normative analyses of the law. Findings & Value added: To discuss how to harmonize, in an international legal environment, competition enforcement.