COM­MIS­SIONER FEARS LE­GAL ‘OVERKILL’

CityPress - - Business -

The long-awaited amend­ments to the Com­pe­ti­tion Act may lead to leg­isla­tive “overkill”, ac­cord­ing to com­pe­ti­tion com­mis­sioner Them­binkosi Bon­akele. “The more I hear politi­cians talk about this, [the more] I am not sure if we know what to ex­pect. I hope it is not go­ing to be some­thing sim­i­lar to the crim­i­nal­i­sa­tion,” he said at the launch of a new book of es­says, Com­pe­ti­tion Law and Eco­nomic Reg­u­la­tion, fo­cused on south­ern Africa.

Bon­akele has been crit­i­cal of the pre­vi­ous ma­jor change to the Com­pe­ti­tion Act – the in­tro­duc­tion of crim­i­nal li­a­bil­ity for com­pany bosses who par­tic­i­pate in car­tels.

The fear is that it will be prac­ti­cally un­en­force­able by the Na­tional Pros­e­cut­ing Author­ity.

Now the prospect of new pro­vi­sions to tackle eco­nomic con­cen­tra­tion raises sim­i­lar con­cerns. “There is a lot of talk in South Africa now about what to do with the prob­lem of con­cen­tra­tion,” Bon­akele said.

“I am one of those who have qui­etly en­cour­aged the min­is­ter to re­ally look at this and make things a lit­tle easier for the Com­pe­ti­tion Com­mis­sion,” he said.

Pres­i­dent Ja­cob Zuma promised a new amend­ment in his state of the na­tion ad­dress this year.

In May, Eco­nomic De­vel­op­ment Min­is­ter Ebrahim Pa­tel ap­pointed an ex­pert panel to de­sign “rad­i­cal in­ter­ven­tions” through com­pe­ti­tion law.

Peo­ple close to the process cite two prob­a­ble out­comes: more teeth for the com­mis­sion’s ex­ist­ing mar­ket in­quiry mech­a­nism and a sim­pler bur­den of proof for abuse of dom­i­nance cases.

As things stand, a mar­ket in­quiry by the com­mis­sion leads to rec­om­men­da­tions that get con­sid­ered by Par­lia­ment and gov­ern­ment depart­ments.

The mooted idea with the ex­pected amend­ments is to make the rec­om­men­da­tions en­force­able. The prob­lem is that this will prob­a­bly see the com­mis­sion bogged down in court, fac­ing a wave of review ap­pli­ca­tions when it uses th­ese pow­ers, said one source.

It is prob­a­bly not the law it­self that in­hibits pro­gres­sive out­comes, but the con­ser­va­tive at­ti­tude of the Com­pe­ti­tion Ap­peal Court and Con­sti­tu­tional Court, Bon­akele sug­gested.

“I now be­gin to won­der if it is a prob­lem of leg­is­la­tion or a prob­lem of South African po­lit­i­cal econ­omy – or ide­ol­ogy. I sus­pect we may create an overkill leg­is­la­tion.

“Look­ing at our judg­ments is prob­a­bly much more im­por­tant than leg­isla­tive changes,” he said.

The Com­pe­ti­tion Ap­peals Court has tended to strike down rul­ings from the Com­pe­ti­tion Tri­bunal, while in most cases the Con­sti­tu­tional Court has not given con­sid­er­a­tion to ap­peals from the Com­pe­ti­tion Ap­peals Court.

“I think there is a very real fear of in­ter­ven­ing in the mar­kets. In Europe you see an in­ter­est­ing con­trast in the ap­petite of the high­est court to take on eco­nomic ques­tions. “I find the South African es­tab­lish­ment is very con­ser­va­tive, much closer to the US and fur­ther away from what I con­sider to be quite a pro­gres­sive idea about gov­er­nance and the econ­omy that you find in Europe.

“I hope judges read the book be­cause I think it con­tains very in­ter­est­ing cri­tiques of how we have pro­gressed thus far,” said Bon­akele. One of the es­says in the book is a cri­tique of an im­por­tant Com­pe­ti­tion Ap­peals Court rul­ing on over­pric­ing from 2015.

The rul­ing cleared Sa­sol of a tri­bunal find­ing that it abused its dom­i­nance to charge ex­ces­sive mark-ups of up to 43% for plas­tic feed­stock used by lo­cal man­u­fac­tur­ers.

Au­thors Reena das Nair and Pamela Mondliwa from the Univer­sity of Johannesburg ar­gue that the Com­pe­ti­tion Ap­peals Court took a “clearly wrong” the­o­ret­i­cal ap­proach in ac­quit­ting Sa­sol. This in­volved choos­ing a ba­sis for imag­in­ing what a hypothetical com­pet­i­tive mar­ket would look like that al­most au­to­mat­i­cally “de­fines away” the prob­lem of ex­ces­sive pric­ing in sec­tors such as South Africa’s petro­chem­i­cal sec­tor where an unas­sail­able mo­nop­oly was built on state sup­port.

– Dewald van Rensburg

Com­pe­ti­tion com­mis­sioner Them­binkosi Bon­akele

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.