South African antitrust enforcer releases Amended Guidelines
By Joshua Eveleigh and Jemma Muller
On 12 September 2022, the Competition Commission of South Africa (“Commission”) published the Guidelines on the Exchange of Competitively Sensitive Information between Competitors under the Competition Act No. 89 of 1998 (the “Amended Guidelines”).
The original Guidelines were released for comment on 14 July 2017; they were created to provide guidance to industry stakeholders on when information exchanges between competitors should be considered harmful to competition (and thus fall foul of the Competition Act) and when they could be considered efficiency-enhancing. The creation of the Guidelines was a welcomed development, as it sought to provide industry stakeholders with insight as to how the Commission will assess whether a particular information exchange between competitors amounts to an antitrust violation, specifically a contravention of section 4 of the Competition Act.
The Amended Guidelines have now been published to address certain concerns raised by industry stakeholders in relation to their first iteration.
Notably, the originally published draft was reported to have received substantive comments from industry stakeholders relating to:
- what constitutes “commercially sensitive information”;
- the broadness of the Guidelines and lack of safe harbours within them;
- additional guidance as to the type of information competitors may lawfully share;
- industry-specific concerns; and
- public announcements.
Whilst acknowledging that the first iteration of the Guidelines was overly broad, the Commission states that this was an intentional decision. Notably, the Amended Guidelines remain just as broad, with the Commission rather opting to determine market-=specific safe harbours on a case-by-case basis.
Additionally, the Commission — now under the aegis of its new head, Doris Tshepe — has chosen to exclude from the Amended Guidelines any discussion of complex topics (such as price signalling, joint ventures, cross-directorship and shareholding, requests for quotations, market studies and benchmarking), instead deciding to rule on these issues on an ad hoc basis.
One substantive difference between the original and Amended Guidelines is the recent departure from the term “commercially sensitive information” to the newly adopted “competitively sensitive information”. In this respect, only information that is likely to have an effect on competition is prohibited in terms of the Guidelines, including: prices, customer lists, production costs, quantities, turnovers, sales, capacities, qualities, marketing plans, risks, investments, technologies, research and development programmes and their results.
While the narrowing of the scope of the amended Guidelines to “competitively sensitive information” and the decision to provide more focused guidance to industry associations ought to be a welcome change, it is likely that stakeholders will continue to perceive the Amended Guidelines as overly broad. In this regard, the Commission has seemingly ignored stakeholders’ previous comments to the original Guidelines, particularly in relation to a lack of safe harbours and industry-specific concerns. In this respect, the Amended Guidelines continue to have little impact on a firm’s ability to self-regulate its conduct in compliance with the Competition Act.
The Amended Guidelines are open for public comment until 04 November 2022 and can be accessed here.