November 2016


BICYCLES: TWO WHEELS, THREE IMPORTANT LESSONS Competition Law November 2016

In late June, the Competition Tribunal posted the public version of its reasons in the matter of Competition Commission of South Africa vs Fritz Pienaar Cycles and nineteen others. This judgement did not appear to attract much in the way of public commentary or media attention. That is not entirely surprising because, on the face of it, the highlight for the casual reader is that two firms received administrative penalties which, in the scheme of the now almost 250 administrative penalties imposed by the competition authorities, were not particularly large.

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COMPETITION LAW IS PUBLIC INTEREST LAW Competition Law November 2016

The South African Competition Act is unique in comparison with most other jurisdictions in that it provides specifically that all mergers must pass a public interest test in addition to any competition analysis. Not only that, but the preamble to the Act recognises the need to create "an efficient economic environment, balancing the interests of workers, owners and consumers...".

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TIME TO OVERHAUL THE MERGER REVIEW PROCESS? Competition Law November 2016

The South African merger review system has been lauded as a highly effective instrument in the enforcement of competition policy. The Competition Commission and the Competition Tribunal have reviewed thousands of mergers over the past 17 years and this review process has undeniably prevented anti-competitive market structures and negative public interest effects, to the benefit of the South African public.

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CREATIVE SOLUTIONS Competition Law November 2016

2016 has witnessed creative approaches to remedies and conditions by the South African competition authorities. Three recent cases come to mind: ArcelorMittal's settlement with the Competition Commission in relation to cartel and abuse of dominance allegations; Media24 v Competition Commission, which related to allegations of predatory pricing in relation to community newspapers in the Welkom region and the merger between Anheuser-Busch InBev and SABMiller.


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BEWARE OF “PAY-FOR-DELAY” SETTLEMENTS Competition Law November 2016

On 8 September, the General Court of the European Union upheld a €93.8 million fine imposed by the European Commission in 2013 against Danish pharmaceutical provider, Lundbeck, in addition to fines totalling €52.2 million against four generic pharmaceutical companies. The fines were imposed on these companies as a result of so called "pay-for-delay" settlement agreements they entered into, which were found by the court to be anti-competitive.

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FROM PREDATORY PRICING TO PROMOTION OF COMPETITION Competition Law November 2016

On 8 September 2015, the Competition Tribunal found that Media 24 (Pty) Ltd had contravened the Competition Act by engaging in a predatory pricing strategy to drive a rival community newspaper, Gold Net News (GNN) owned and managed by a small company, Berkina Twintig (Pty) Ltd, out of the market in the Welkom area. In its decision, summarised later in this article, the Tribunal indicated that it would convene a further hearing to deal with the remedies that should be imposed. On 6 September 2016, the Tribunal released its reasons for the decision regarding a remedy. But how appropriate is the remedy reached after a year?

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ARE THE COMPETITION COMMISSION'S REMEDIES BECOMING TOO INVENTIVE? Competition Law November 2016

The last few months have seen a marked change in the Competition Commission's approach to the conditions it requires respondent firms to agree to in order to settle prohibited practice cases. In addition to the typical conditions requiring respondents to pay administrative penalties and to cease their allegedly unlawful behaviour, the Commission is increasingly pushing respondents to commit to unusual behavioural remedies that compel them to do things or spend money on initiatives that are unrelated to the cessation of the putative unlawful conduct. While the Commission's objectives with these conditions may be laudable, it is arguably acting beyond its powers in requiring respondents to accept some of these conditions as they are not provided for in the Competition Act.

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IMPLICATIONS OF THE TWIN PEAKS MODEL AND INSURANCE BILL Competition Law November 2016

The "Twin Peaks Model" is a comprehensive regulatory framework that intends to fundamentally reform South Africa's financial sector. As a result, certain transactions in the financial sector may be subject to the concurrent jurisdiction of both the competition authorities and financial sector regulatory authorities.

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A "ONCE OFF AFFAIR"? Competition Law November 2016

Until recently, competition law practitioners would advise a client, which had notified its acquisition of sole control at a time when that control was attenuated by some other firm, that the subsequent removal of the joint controller would not necessitate another merger notification. However, the Media 24 case (Caxton and CTP Publishers and Printers Limited and Media 24 (Pty), Novus Holdings Limited & Three Others, Competition Appeal Court (CAC) Case No.: 136/CAC/March2015 and Competition Tribunal Case No.: 020974.) now suggests that the concept of sole control being a "once-off affair" may not be as watertight as we had all hoped.

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DAMAGES FOR COMPETITION “VICTIMS” Competition Law November 2016

The Competition Act (89 of 1998) provides for the victims of anti-competitive practices to claim compensation or damages for the harm they have suffered as a consequence of these practices. This, ideally, should be an additional deterrent for companies not to engage in cartel behaviour.

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CLOUDY WITH A CHANCE OF SUNNY PATCHES Competition Law November 2016

Merger control worldwide, including the African continent, is aimed at identifying and preventing those mergers that will limit competition and harm consumers. As a result of enhanced innovation and operating efficiencies, most mergers benefit consumers and the overall economy. It is not denied that some mergers could result in an increase in market power, and limitation on competition and consumer welfare. However, of crucial importance for economic growth in Africa, is that pro-competitive mergers or mergers neutral to competition, which in fact facilitate investment, should not be frustrated due to regulatory merger control hurdles and unclear, uncertain merger enforcement.

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NOTES ON MERGER CONTROL UNDER ETHIOPIAN LAW Competition Law November 2016

As is the case in other jurisdictions, Ethiopia has laws designed to control anti- competitive acts, and to create a market based on the tenets of the free market economy. Currently, the main source in this regard is the Trade Competition and Consumers Protection Proclamation (813 of 2013). This Proclamation, among others, prohibits anti-competitive practices and incorporates the frameworks to regulate mergers, distribution of goods and consumer protection.

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ABUSE OF MARKET DOMINANCE IN ETHIOPIA Competition Law November 2016

Competition law in Ethiopia is mainly regulated under the Trade Competition and Consumers Protection Proclamation (813 of 2013). The Proclamation is applicable to any commercial activity or transaction in goods or services conducted or having effect within the Federal Democratic Republic of Ethiopia, unless exempted by the Council of Ministers. As of yet, there have been no exemptions.

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COMPETITION LAW IN UGANDA Competition Law November 2016

There is no dedicated domestic competition law regime or dedicated competition authority in Uganda. Sector specific regulators focus on any area that relates to competition in their relevant industries.

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What’s in a name? Intellectual Property November 2016

In his play "Romeo and Juliet", William Shakespeare proposed, through his character Juliet, "What's in a name? That which we call a rose by any other name would smell as sweet." What he was saying was that the rose had intrinsic value, and, no matter what name it was given, that intrinsic value would be unaffected. The actual name, per se, was irrelevant and had little or no value. That proposition may have had some merit in the seventeenth century, and in the specific context in which it was advanced, but it does not have universal application today.

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