Legislation: Competition Amendment Act gazetted

The controversial Competition Amendment Act was gazetted yesterday but is not yet in force, notes Pam Saxby for Legalbrief Policy Watch. According to a Presidency media statement announcing the imminent enactment of the Bill concerned, once operational the new piece of legislation is expected to ‘boost’ economic inclusion, facilitate transformation and open the door to ‘fresh investment and innovation’. To that end, it strengthens the powers of the competition authorities to deal with prohibited practices and the abuse of market dominance – focusing on improved outcomes for small and black-owned businesses, as Legalbrief Today has regularly reported.

In the view of its champion, Economic Development Minister Ebrahim Patel, the Act constitutes ‘a new deal for economic transformation and inclusion’ (eNCA). ‘We’ve taken a major, potentially very controversial piece of legislation and secured, through social dialogue, a significant understanding of what we seek to do and an acceptance that we’ve struck an effective balance between all … the imperatives,’ Patel told media representatives last July.

Among other things, the Act ‘allows for greater participation by the Minister’ by empowering him/her to intervene in mergers ‘on public interest grounds’, ‘appeal merger decisions’ and ‘require the initiation of market inquiries’ (Cliffe Dekker Hofmeyr). The Minister may also ‘direct’ the Act’s enforcement by issuing regulations on a range of issues including: restrictive horizontal and vertical practices; ‘the calculation and determination of an excessive price’; ‘sectors to which … buyer power provisions apply’; and the ‘factors and benchmarks’ to be considered in ‘determining if prices or conditions are unfair’ and whether ‘a dominant firm’s pricing impedes the participation of small, medium and micro enterprises (SMMEs) and historically disadvantaged persons’.

As Legalbrief Today has also reported, the Act’s implications for SMMEs will to some extent be determined by the outcome of a review of definitions in a schedule to the 1996 National Small Enterprises Act. According to December’s call for input on the issue from the Department of Economic Development, this is noting that the revised definitions will influence which ‘types of firms … benefit from certain protections and considerations’ once the new piece of legislation is operational. At the time of writing, it was still not clear if an apparently separate review initiated in October by the Department of Small Business Development is part of the same process.

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