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South African Competition Amendment Bill 2018

On Tuesday 23 October 2018, the National Assembly elected to pass the South African Competition Amendment Bill 2018 (the “Bill“).  The next step is its referral to the National Counsel of Provinces (“NCOP”) and a further opportunity for stakeholder submissions.

The Bill’s objective is to introduce provisions that clarify and improve the determination of prohibited practices relating to restrictive practices, abuse of dominance and price discrimination while strengthening the penalty regime.

The notable proposed amendments to obtain the Bill’s objective are:

  • the provision of greater flexibility in the granting of exemptions that promote transformation and growth, while strengthening the role of market inquiries and merger processes in the promotion of competition and economic transformation through addressing the structures and de-concentration of markets;
  • amending the process by which market inquiries are initiated and promoted, for the purpose of allowing intervention by the National Executive in relation to mergers that affect the national security interests of South Africa;
  • the provision of the powers to the Competition Commission to conduct impact studies on prior decisions, to promote its administrative efficiency; and
  • strengthening the penalty regime.

The Portfolio Committee on Economic Development’s revisions are as follows:

  • where an excessive price was charged by a dominant firm, the dominant will be required to show “reasonableness” in its justification for the excessive price;
  • more protection for small or medium sized firms owned by historically disadvantaged persons; and
  • easier prosecution of dominant firms relating to the margin squeeze offense.