Women in the public sector
The Competition Commission’s Nompucuko Nontombana on being the public’s watchdog
Nompucuko Nontombana is a public watchdog. She does this through her role as the Enforcement and Exemptions Divisional Manager of the Competition Commission of South Africa.
Nontombana drives the commission's strategy on abuse of dominance, which aims to curb the abuse of market power by firms in dominant positions.
“I oversee all investigations carried out by the commission in relation to abuse of dominance and restrictive vertical practices.”
Restrictive vertical practices refer to anti-competitive conduct by firms in a vertical relationship.
“For example, minimum resale price maintenance is prohibited in the Competition Act.This is conduct which may occur when a manufacturer dictates the resale price at which distributors must sell to end consumers,” she explains.
Nontombana works with a “great team” of about 30 lawyers and economists who conduct these investigations in the division.
The division also reviews exemption applications, where firms and professional associations, apply to be exempt from the provisions of the Competition Act.
“The Competition Act lists the grounds on which firms and professional associations may rely on when applying for an exemption. For example, a group of firms may come together and apply for an exemption on the basis that, if granted, it will promote the ability of small businesses or firms controlled by historically disadvantaged individuals to be competitive.”
An investigation determines
whether or not there is a basis to grant or reject each exemption application received.
The commission is an important player in the economic space and contributes towards the economic goal of a growing and inclusive economy as stated in the National Development Plan.
“We have various investigations and market inquiries into the priority sectors, which have been identified as strategic and are aligned to broader government priorities. These are sectors that we identify as likely to have the biggest impact on consumers.”
She explains that these include market inquiries into healthcare, grocery retail and transport.
“We also intervene in markets through the advocacy work that the commission does, where we mostly target specific groupings such as trade unions and small businesses. One of the latest is an advocacy project in the automotive aftermarket,” Nontombana adds.
Cracking down on price fixing
Price fixing is when two or more independent firms, who are supposed to compete for market share, agree on a price for a particular item or service, or agree on trading terms or conditions such as discounts.
“Cartel conduct is considered to be the most egregious of all contraventions in the Competition Act. When firms collude, it ultimately amounts to stealing from consumers,” she stresses.
In terms of the Competition Act, the penalty for a firm implicated in price fixing can be up to 10 percent of its annual turnover.
Anyone can report price fixing or any other contravention of the Act.This can be done by lodging a complaint using the prescribed form or by submitting information and evidence which the commission can use to initiate an investigation, Nontombana explains.
She says that one of the challenges the commission faces relates to the fact that the South African economy is highly concentrated due to its history, which means that an intervention in one or two sectors does not dramatically change the structure of the economy.
“The impact of the commission's interventions is therefore not always immediate.”
“Cartel conduct is considered to be the most egregious of all contraventions in the Competition Act. When firms collude,
it ultimately amounts to stealing from consumers.”
Another challenge is the reality that the Competition Act cannot solve all the problems faced by the South African economy.
“In fact, the Competition Act has its limitations and there are talks about it being amended to deal with some of the challenges we face in its interpretation and implementation.”
Another concern is that some of the firms investigated have very deep pockets and are prepared to spend a lot of time and effort to delay and derail investigations, she says.
Some of the work the division is busy with includes an investigation into the excessive pricing of cancer medication; a market inquiry into public passenger transport; the excessive pricing of school uniforms and an investigation into Transnet for alleged anti-competitive conduct in its pricing practices at ports and rail services.
A place of learning
Nontombana adds that although the Competition Commission is a relatively young institution, it has achieved a lot in its 18 years.
“The commission attracts very young, dynamic and brilliant
minds so the learning curve is very steep for everyone, and we learn from each other all the time.”
Impact studies are done to evaluate the effectiveness of the commission's work.
“These studies prove that the commission puts some money back into the pockets of the consumer through cost savings, which may not have been achieved without its intervention.
“The World Bank also conducted a study which suggests that the work of the commission broadly, has a positive impact on the economy and particularly the lives of the poor,” she says.
Great career prospects
According to Nontombana, competition law and economics is a niche field with great career prospects, within the commission and outside the institution.
“More importantly, you get an opportunity to make an impact in the economy through the work you do. We are now actively reaching out to more and more universities so that those who have an interest in the work we do, get exposure to it earlier on.”
Nontombana loves her job because every investigation is different meaning she is constantly learning something new.
“You also get to know the different sectors of the economy really well, with an even better understanding of micro-economics.”
In the immediate future, Nontombana hopes to see key investigations successfully concluded, while her more long-term plans involve being in a research environment.
Nompucuko Nontombana holds a MPhil in Economic Policy from the University of Stellenbosch. Prior to that she obtained an Honours degree in Economics from the University of Cape Town. More recently, she studied and completed an MBL through Unisa's Graduate School of Business Leadership.
She joined the Competition Commission as a Principal Analyst in the Enforcement and Exemptions Division in 2007. After a few years, she was seconded to the Mergers and Acquisitions Division until she was appointed into her current role in October 2015.
Nompucuko Nontombana is the Enforcement and Exemptions Divisional Manager of the Competition Commission of South Africa.
Writer: Noluthando Motswai