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Africa: Regulator objectives and procedural fairness in mergers

30 March 2023
– 5 Minute Read


This article is the first in a series of three highlighting the discussions that took place at our Africa Competition Law Conference held in February 2023. It covers the main points made by panellists on the topic of regulator objectives and procedural fairness. 

The panellists in this session were:

  • Dr Willard Mwemba, director and CEO of the COMESA Competition Commission
  • Mr Lufuno Shinwana, senior legal counsel: Competition Law and Data Privacy, Africa Zone, AB InBev
  • Mr Thomas Janssens, global head – Antitrust, Competition and Trade Group, Freshfields Bruckhaus Deringer
  • Mr Judd Lurie, partner, Bowmans
  • Ms Bertha Mwarija, senior associate, Bowmans

The crux of the discussion was that competition authorities are operational in multiple African jurisdictions and, although there are some common denominators to their approaches, there remain significant differences in merger assessments and anti-trust matters.

These differences produce complexities for companies undertaking mergers and acquisitions on the continent and particularly for those firms with operations across a number of African countries.

Key elements of procedural fairness

Procedural fairness does not only apply once transactions have been notified to the relevant regulator but extends to the earlier planning process involving the assessment of the transaction, consideration of whether it requires notification, and which competition authority/ies have jurisdiction. 

From a business perspective, legal teams need to advise the board of directors of the regulatory processes involved in the merger and provide reasonably reliable guidance as to timing and issues that need to be addressed in the merger filing.  Having regulators that are consistent and predictable fosters certainty in the process. 

The panel discussed the key elements of procedural fairness: transparency, certainty and consistency, and the related need for a clear analytical framework for the competition authority to follow. 

From the perspective of the COMESA Competition Commission (CCC), it was noted that having clear rules is a necessary, but not sufficient, requirement for fairness and, in fact, the attitude of the competition authority was underlined. The approach of CCC is to remain available and responsive to merger parties to ensure fairness in its operations. It was noted that the CCC is receptive to the feedback of its stakeholders and has issued guidelines and practice notes and has even withdrawn some of these documents, where they have led to confusion or misunderstanding.  The CCC is acutely aware of the impacts of its decisions on business and economic outcomes in COMESA and aims to resolve matters as efficiently as possible.

Fairness in procedure for third party intervention

Another potential challenge is when there are discrepancies between regulators in relation to third-party submissions or interventions during merger reviews.  Third-party input can be valuable in assessing the likelihood of a substantial lessening or prevention of competition because of the merger, but such input needs to be balanced against the timeline of the review period, the speakers said, noting that while South Africa has a clear framework for third-party intervention, this is not always the case in other jurisdictions.

In some jurisdictions where third-party input is provided for, there appears to be inadequate provision for third parties to produce evidence and, in turn, for merger parties to respond to third-party submissions and cross-examine witnesses.

The example was given of a case in Tanzania, where third parties had been allowed to raise objections after the merger had been approved. In that case, the merging parties had brought an appeal against certain conditions attaching to the merger.  During the appeal proceedings, third-party objectors came forward to raise issues with the transaction – even though they had not come forward earlier when they had been afforded the opportunity to do so.

Despite the late entry of the third-party objectors into the process, the Tanzanian Competition Tribunal allowed them to enter submissions so that it could assess whether they had legitimate issues. 

The implication is that even where third parties have no legitimate basis on which to seek to intervene, they can nevertheless cause additional delays.

Interestingly, opacity in respect of third-party submissions is not limited to African merger review processes. It has also been observed in European Commission merger reviews, where merger parties may not receive direct insight into issues raised by third parties.

One stop shop approach to merger reviews in COMESA

The issue of COMESA’s ‘one-stop-shop’ approach to merger reviews was clarified during the panel discussion. The CCC clarified that all COMESA Member States recognise the regional regulator’s one-stop-shop policy; and the CCC has had no official notice from any Member State that they intended not to comply with the policy. This means that a filing to the CCC should cover all relevant COMESA jurisdictions. Individual member states may call on merger parties to provide a notice or confirmation that a transaction has been duly filed with the CCC.

In this context, there is necessary information flow between the CCC as a regional regulator and national competition authorities of the COMESA Member States. It was clarified that:

  • When the CCC receives a merger notice, it informs the Member States affected in that transaction and requests input on the country-specific effects of the transaction.
  • National regulators may issue information requests directly to merger parties to gather this information.
  • Best practice may be for the national regulator to copy the CCC in when contacting merger parties.