The following report is submitted by South Africa to the OECD Competition Committee for discussion at its forthcoming meeting to be held on 29-30 November 2016.

Submission by the Competition Commission of South Africa

The 2015/16 financial year brought significant developments for the South African competition agencies: the Competition Commission of South Africa (CCSA) and the Competition Tribunal of South Africa (CTSA). On the legislation and policy front, law makers introduced personal criminal liability for directors or managers who knew about or participated in cartel conduct. The new law became effective in May 2016, which was soon after the financial year end, but because of the far reaching implications of this development in South African law we highlighted it in our 2015/2016 annual report, as we do in the pages that follow. The move was not without controversy but the CCSA is working with relevant agencies to bring about a smooth transition into the new criminal dispensation. The CCSA also published final guidelines on two subjects: (1) its approach to assessing public interest concerns in mergers and (2) its approach to calculating administrative penalties for anti-competitive conduct.

The CCSA and CTSA continued their enforcement action against cartels, restrictive vertical agreements and abuse of dominance. The agencies tackled cartels in several industries including construction, car parts, foreign exchange, waste removal and furniture removal. The CTSA handed down its first predatory pricing decision, finding that the CCSA had successfully made out a case against Media24, a multimedia firm, for pushing a rival out of the market for community newspapers. However the Constitutional Court of South Africa dealt the CCSA a blow when it found that the CCSA could not appeal a decision handed down by the Competition Appeal Court (CAC) – effectively finding that Sasol Chemical Industries had not contravened the Competition Act as previously alleged by the CCSA.

The retail sector came under the spotlight this year with the launch of a new market inquiry focusing on all levels of the retail chain. The market inquiry derives its powers from a 2013 amendment to the Competition Act which gave the CCSA the power to conduct broad studies into the state of competition in a selected industry.

Three major transactions were notified in the telecommunications industry this year. These transactions involved some of the largest telecommunications networks in the country all bidding to take advantage of the next frontier in communication technology. Only one merger, the Telkom/BCX deal, went all the way to a hearing before the CTSA. The other two mergers were abandoned before reaching that point. After a hearing the CTSA approved the Telkom/BCX merger with conditions.

Finally the Commission carried out or took part in several studies which assessed the impact of the CCSA and CTSA’s interventions after the fact. We have selected some for discussion in this annual report. Included in these were assessments of the local cement industry, the fertiliser industry and the fruit and vegetable industry. For the most part the industries assessed display positive competition developments since the interventions of the competition agencies.