Business

Competition Act must be capture-resistant – expert

2017-11-11 09:49

A panel of ministerial advisers has tried to “future-proof” the proposed new amendments to the Competition Act against abuse.

“You do not want to introduce discretion,” said Michelle le Roux, chair of the panel that recently advised Economic Development Minister Ebrahim Patel on amending the act.

The Competition Commission is already a powerful agency and when new powers get given to it, these have to come with “checks and balances, oversight and justification”, Le Roux told City Press.

“Some would want to capture the commission for populist gains,” she said in a speech to competition lawyers at an annual gala breakfast hosted by the Law Society of the Northern Provinces.

“Its powers will be greedily eyed.”

She clarified to City Press that you have to design laws with the worst possible future developments in mind – not on the basis of giving powers to the people currently running the system.

This is colloquially known as the “Mandela law” problem, where legislation immediately following the end of apartheid tended to include a large amount of executive discretion buoyed by the euphoria of the transition.

The long-awaited competition amendment bill follows a call from President Jacob Zuma in his state of the nation address early this year for “radical” new measures to address economic concentration.

Patel subsequently put together the expert panel to come up with amendments to address concentration as well as South Africa’s skewed ownership patterns.

The original deadline for publishing the proposed amendments was October 30, but Le Roux said that it will likely still be gazetted by the end of November.

She emphasised that the amendments will contain inputs from other parties and not just her panel.

“Clients don’t always take our advice. There were parallel processes. The minister will blend our advice with whatever else he gets,” she said.

Le Roux’s panel includes Imraan Valodia, dean of the University of the Witwatersrand’s commerce department, Liberty Ncube, the commission’s chief economist as well as Doris Tshepo, an attorney.

There has been intense speculation about the extent of the planned amendments, but Le Roux would not divulge much before the official release of the bill.

It is expected that the amendments will include new and more realistic evidentiary requirements for abuse of dominance cases as well as changes to the commission’s powers to enforce its findings after market inquiries.

Some public pronouncements have made it seem like they might create new powers for the competition authorities to proactively break up monopolies or large companies.

“You can have break-ups, but it will be a last resort. It is the most intrusive thing a regulator can do,” said Le Roux.

Earlier this year competition commisioner Thembinkosi Bonakele raised concerns that the amendments would be “overkill” and land the commission in perpetual court battles.

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November 12 2017