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COVID-19: Healthcare block exemption expanded, South Africa

15 April 2020
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Further to our newsflash dated 23 March 2020 (available here), on 8 April 2020, the South African Minister of Trade, Industry and Competition (Minister) published regulations expanding the scope of the COVID-19 block exemption in the healthcare sector (Regulations).

Competing manufactures and suppliers of medical and hygiene goods and services (such as hand hygiene and water sanitation, ethicals and consumables, disinfectants and anti-bacterial products) may now communicate with one another in relation to stock availability and may also coordinate on the procurement and distribution of these types of goods and services.

Without the Regulations, competitor communication on stock levels and coordinated procurement would raise competition law concerns and could possibly result in contraventions of the Competition Act, No. 89 of 1998 (Act).

The Regulations exempt agreements or practices from the application of sections 4 and 5 of the Act, dealing with horizontal and vertical restricted practices, respectively.

The Regulations provide that the exemption applies if the agreements or practices are undertaken at the request of, and in co-ordination with, the Department of Health or the Department of Trade, Industry and Competition, for the sole purpose of responding to the COVID-19 pandemic.

Communication on price between competitor firms is still an outright prohibition.

Minutes of meetings and records of agreements and practices undertaken by market participants in the context of the Regulations must be maintained. This is so that, if questioned about coordinated behavior later, firms can demonstrate to competition authorities (and other complainants) that their market conduct took place within the confines of the Regulations.