By Gina Lodolo
By way of background, the Competition Amendment Act 18 of 2018 (“Act”) included amendments to the powers of the South African Competition Commission (“SACC”) in respect of market inquiries. In terms of the amended Section 43C of the Act, should the SACC find that there are features which have an adverse effect on competition, with particular regard to the “impact of the adverse effect on competition on small and medium businesses, or firms controlled or owned by historically disadvantaged persons”, the SACC must make recommendations, which will mitigate the adverse effects on competition. The SACC’s remedial powers include, most notably under Section 43D(2) read with Section 60(2)(c), that the SACC can make a recommendation to the Competition Tribunal to order a divestiture in relation to such an adverse effect on competition identified in the market inquiry.
On 24 May 2023, the Minister of Trade, Industry and Competition published regulations titled ‘Regulations relating to appeals arising from market inquiries before the Competition Tribunal in terms of section 43F and Regulations relating to a divestiture recommendation by the Commission in terms of Section 43D(2) of the Competition Act, No.89 of 1998, as amended’ (“Regulations”), which took effect upon publication thereof, to govern the procedure that the SACC must follow when making such a recommendation to the Competition Tribunal to order a divestiture following a market inquiry, together with the rules for appealing a decision made by the SACC emanating from a market inquiry. In this regard, where the SACC concludes in a market inquiry that a divestiture be recommended to the Competition Tribunal to make such an order, the SACC must file a notice of motion and affidavit providing:
- grounds for the recommendation;
- material facts;
- the law relied on by the SACC; and
- provide reasons for the divestiture being reasonable and practical.
The respondent will be provided with an opportunity to oppose the recommendation to the Competition Tribunal.
In respect of appealing a recommendation by the SACC emanating from a market inquiry, any person that is materially and adversely affected by a decision of the SACC in respect of remedial action taken by the SACC to remedy an adverse effect on competition, may appeal the decision by filing a Notice of Appeal. The Notice of Appeal must be filed within 25 business days after the affected organisation has received a notice from the SACC of the decision. While the evidence in the appeal will usually be confined to the market inquiry record, the Regulations do provide a number of exceptions.
The Regulations provide that the Notice of Appeal must contains the following:
‘(a) the determination or decision that is the subject of the appeal;
(b) whether the whole or part of the determination or decision is the subject of the
(c) if only part/s of the determination or decision are being appealed against, which
part/s of the determination or decision are the subject of the appeal;
(d) the grounds on which the appeal is based; and
(e) the relief sought.’
For the full process governing the appeal, see here.
These Regulations are vital to be cognisant of as the SACC is currently in the process of undergoing various market inquiries, including the Fresh Produce Market Inquiry, the Media and Digital Platforms Market Inquiry, the South African Steel Industry Market Inquiry and most notably the Online Intermediation Platform Market Inquiry which is due to be completed on 30 June 2023 (after an extension was recently granted for the SACC to finalise the report and draft remedial actions and recommendations).
Primerio director, Michael-James Currie says given the SACC’s broad remedial powers following the conclusion of a market inquiry, coupled with a very different competition test to be used in market inquiries than the traditional SLC test, is likely to result in various market participants utilising the appeal procedures in the near future.