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The impact of the Competition Amendment Act?

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The impact of the Competition Amendment Act?

  • 07 Jul 2023

The goal of South African competition law is to preserve and advance competition in that country's markets. The Competition Act (often known as "the Act") has governed competition law in South Africa since 1998. It applies to a wide range of industries because businesses naturally compete with one another and build market share over time.

To ensure equity and efficiency in the South African economy, the Competition Commission, the controlling statutory authority, has the responsibility to look into, monitor, and assess mergers, misuse of dominant positions, and other restrictive commercial practises.

It has the following objectives:

1. promoting the efficiency, adaptability and development of the economy;

2. providing consumers with competitive prices and product choices;

3. promoting employment and advancing the social and economic welfare of South Africans;

4. expanding opportunities for South African participation in world markets and recognising the role of foreign competition in the Republic;

5. ensuring that small- and medium-sized enterprises have a fair opportunity to participate in the economy; and

6. promoting a greater spread of ownership, in particular to increase the ownership stakes of historically disadvantaged people.

The Competition Amendment Act (also known as "the Amendment Act") was approved on February 13, 2019, and it has since generated considerable legal discussion and contention. The Amendment Act seeks to solve the persistent problems of concentration and racially unbalanced ownership, mostly achieving what the Act set out to accomplish. By fundamentally altering the rules governing collusion, abuse of dominance, pricing discrimination, administrative fines, merger control, and market inquiries, it seeks to achieve this.

The Amendment Act has been referred to as "giving teeth" to the market inquiry procedure since it gives the Competition Commission additional authority to evaluate an entire market rather than just the behaviour of the company in question. This will make it possible for competition authorities to use targeted remedies to actually alter a market's structure.

One of the new sections that has been suggested deals with mergers involving "foreign acquiring firms" and gives the President the authority to determine whether a planned merger with a foreign acquiring firm will "have an adverse effect on the national security interests of the Republic" through the use of a committee.

An intriguing development that will likely have a big impact on how businesses, both domestic and foreign, operate in the South African market is the passage of the Competition Amendment Act.

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