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Africa: Highlights from Bowmans’ 12th Annual Africa Competition Law Conference 2024 (1 of 3)

15 April 2024
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Overview

  • Bowmans hosted its 12th Annual Competition Law Conference in Nairobi, Kenya, in February this year. The conference theme ‘Towards Convergence’ was contextualised within the development of a competition protocol under the African Continental Free Trade Area (AfCFTA) agreement. The topic invited discussion from delegates on the interactions among various African competition regulators and the anticipated evolution of competition laws towards harmonisation among differing competition regimes.
  • This article, the first in a series of three highlighting the key points of the discussions, addresses the subject of convergence among African competition regimes.

This is the first in a series of three articles summarising the key points of discussion during Bowmans’ 12th Annual Africa Competition Law Conference, held in Nairobi, Kenya, in February 2024. 

The first panel discussion focused on the introduction of new competition regimes, including the African Continental Free Trade Area (AfCTFA) Protocol on Competition (Protocol), and the questions these raise for much needed convergence and harmonisation among various national and regional competition regimes in Africa.

The panel members included:

  • Joyce Karanja, moderator, partner, Bowmans Kenya
  • Dr Adano Roba, acting Director General of the Competition Authority of Kenya (CAK)
  • Dr Willard Mwemba, CEO, COMESA Competition Commission (CCC)
  • Juan Rodriguez, partner, Sullivan & Cromwell
  • Lilian Mukoronia, registrar of the East African Competition Authority (EAC)
  • Magdalena Utouh, director of Restrictive Trade Practices at the Tanzanian Fair Competition Commission (FCC)

Firms operating within Africa are well aware of the rate of change in the African competition regulatory framework. There has been an explosion in the adoption of competition laws over the last 12 years, including the establishment and operation of a number of regional competition authorities.

The latest, and perhaps most significant development has been the Protocol adopted under the AfCFTA framework. The aim of the Protocol is to establish a Pan-African competition regulation regime, and essential to this aim is the coordination and harmonisation of national and regional competition laws with any such continental laws.

Developing and introducing effective regimes

The panel discussed the introduction of new competition laws, particularly the Protocol under AfCFTA, and the East African Competition Authority (Amendment) Bill to be enforced by the East African Community Competition Authority (EACCA).

Conceptual ‘must haves’ for an effective competition regime were discussed at the outset, considering the frameworks proposed under the Protocol and other African competition laws. It was posited that an effective regime (from the perspective of clients and practitioners) should include:

  • Due process – requiring the competition authority to make an adequate case, and to afford respondents a right of reply.
  • A right of appeal against administrative decisions, with clear timelines for any contemplated appeal or review processes. It was also pointed out that it is necessary for judges dealing with appeal processes to have capacity to process cases in reasonable timeframes and that they should have an appreciation of economics and business.
  • Competition policy that is free from political interference, although it was conceded that this aspect is a complex one, given that many countries employ competition laws as tools to effect industrial policy.

For merger regimes in particular, it was discussed that clients want:

  • Reasonable merger notification thresholds (preferably based on turnover).
  • Reasonable predictability in the review process (fostered through published guidelines and full written reasons for decisions taken).
  • A ‘pure’ competition assessment without public interest considerations, although as has been discussed in previous conferences and in the later panel on protectionism, public interest has been and will remain an important feature in competition regulation in Africa.
  • At a practical level, reasonable filing fees and merger filing processes that are free from burdensome and bureaucratic requirements (such as the submission of original or authenticated filing documents).

With regard to developing the fundamentals of a competition regime, the representative of the EAC described the considerable efforts that have gone into the establishment of the necessary policies, infrastructure and staffing to bring the EACCA fully online.

It was noted that it is intended that the existing EAC competition laws (which were published in 2006) be updated to introduce key features that were not previously stipulated for, such as merger thresholds and clear statutory timelines. The EACCA has also developed threshold and fee guidelines, which are in the process of being gazetted.

Steps towards harmonisation

The Protocol under AfCFTA has underscored the need for national and regional regulators to consider how existing competition regimes might operate within the continental competition law framework. These considerations are not dissimilar to those required following the establishment of regional regulators over the course of the last 12 years including, the more recently anticipated operation of the competition regime in the EAC.

The panel touched on the learnings and adjustments made by regional and national regulators in response to the new regional competition regimes. Such solutions include co-operation under agreements or memoranda of understanding (MOUs), but panellists also noted the need for pragmatic and solutions-orientated steps, such as revisions and amendments to existing laws and appropriate referral mechanisms to better suit changing economic and legal contexts. The introduction of new, supranational laws may also present an opportunity to introduce new concepts into local laws.

Amendments to existing laws

The CCC, the most active African regional competition regulator, pointed to the process of refinements and updates required to keep national and regional competition regimes in harmony and to address issues or inconsistencies that have been identified in practice. As in previous years, the CCC’s approach is to be practical and pragmatic to find solutions to achieve effective regulation and allow businesses to operate across the region. Amendments to the existing COMESA Competition Regulations are being deliberated and are expected to be finalised by December this year.

The representative from the CAK noted that, on the whole, the fundamental principles set out in the Protocol align to a great extent with the competition principles in the Kenyan Competition Act.  An important difference is the introduction under the Protocol of the concept of an abuse of ‘economic dependence’, which is a useful construct in assessing conduct in digital markets, especially online platforms.

The CAK views the introduction of the Protocol as an opportunity to update and enhance local laws by adopting similar provisions.  It was noted that the CAK has developed a position paper with respect to the introduction of concepts such a ‘strategic market position’ in view of potential future updates to competition laws.

The CCC similarly welcomed the inclusion of the provisions of Article 11 of the AfCFTA Protocol as a model for national and regional laws.

The CCC stressed the importance of input from lawyers and members of the business community when draft laws are published for comment.

MOUs, agreements and other steps

The EACCA  is working on framework agreements with the national competition regulators of the EAC Member States, which aim to address issues of jurisdiction between the regional and national regulators. The representative from the FCC noted that a level of convergence is necessary in light of the imminent operation of the EAC, and that the FCC is taking steps to better align with the regional regulator. Such steps include attending events and programs hosted by the EAC and providing comments to proposed regulations and guidelines.

As regards the specific overlaps that may arise at the regional level once the EACCA becomes fully operational, the CCC suggested that express provisions could allow it the discretion to refer matters to the EACCCA where appropriate. The EACCA and CCC are working together to agree on mechanisms for the referral of matters to the appropriate jurisdiction.

The CCC is also hopeful that issues of jurisdiction at a Pan-African level can be similarly regulated by reference to thresholds, with appropriate buy-in from the national authority, such that only continental matters are dealt with within AfCTFA, while regional and national competition issues are dealt with at the respective levels.

As regards the potentially tricky issue of delineation between national and regional jurisdictions, there are helpful learnings from the approach taken by the European Commission (EC), where parties can choose to navigate their transactions to the EC or vice versa.  It was noted that thresholds require corrective mechanisms to allow for adjustments under particular circumstances, where warranted.

The CAK intends to engage with the competition authority under the Protocol as soon as it is established to conclude a MOU before the Protocol comes into effect so that mechanisms are well in place to address issues of concurrent jurisdiction.