SOUTH AFRICA: DTIC ISSUES A COMPETITION POLICY FOR JOBS AND INDUSTRIAL DEVELOPMENT
The Department of Trade, Industry and Competition (DTIC) released a competition policy for jobs and industrial development on 19 May 2021.
The policy provides guidance to policy-makers on the approach to be applied when interacting with the Competition Commission and the Competition Tribunal, the independent regulators which administer the Competition Act (Act).
The policy aims to increase competitive dynamism and advance the public interest, in line with the objectives of the Act. This approach is intended by the DTIC to complement other industrial policy tools, like industrial support and trade policy.
The main tools identified in the policy are:
- regulation of mergers: Public-interest considerations take central focus here. Policy-makers will engage with merging parties in order to preserve employment; increase Black ownership, worker participation and representation on boards of directors; promote supplier development and localisation; promote deeper and higher levels of investment in order to enhance the ability of local industries to compete in international markets and to create local jobs; and promote downstream beneficiation, especially in the mining industry. The policy notes that ‘Engagements with merger parties can be expedited through careful consideration by merger parties of the extent to which a proposed merger can be structured to advance the public interest goals in the competition legislation and policy’.
- market inquiries: Recent amendments to the market inquiry provisions in the Act provide the competition authorities with enhanced powers to address the harmful effects of economic concentration. Recommendations from these inquiries should enhance competition, industrialisation and transformation.
- abuse of dominance and cartel investigations: The recent amendments to the Act should improve the ability of the competition authorities to prosecute abuses by dominant suppliers and buyers, particularly if this stifles the growth of small and medium enterprises and firms owned and controlled by historically disadvantaged South Africans.
- digital markets: These will be watched closely from a regulatory point of view to avoid late interventions in markets which have already reached a tipping point.
- cross-border coordination: In the context of the African Continental Free Trade Area, consideration is being given to a Competition Protocol to complement the new trade integration measures that have been agreed by a number of African Union member states. Policy-makers will focus on information-sharing and coordination of regulatory approvals.
- national security considerations: Amendments to the Act (which have not yet been signed into effect by the President) will provide powers to the Executive to introduce regulations to facilitate the regulation of mergers involving a ‘foreign acquiring firm’. Policy-makers are considering appropriate regulations and timing for introducing them.
Click here to access the full policy.