A comparison of merger regulation in South African and COMESA

Abstract

The preamble of the Competition Act No. 89 of 1998 recognises the injustices of the past which resulted in excessive concentrations of ownership and control within the national economy. The Act further provides as its main objective the regulation of trade practices which affect our national economy. Section 12(1)(a) of the Act prohibits any anti-competitive trade practices which are likely to substantially lessen or prevent competition. The Act defines a merger as a process when one or more firms directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another firm. The Competition Authorities are enjoined to evaluate mergers before they get approved. This is so because once the merger gets approved without being properly assessed the consequences maybe undesirable and anti-competitive. The concept of merger regulation is problematic and in this dissertation I probe into the South African merger regulation regime and compare it with that of Common Market for Eastern and Southern Africa (COMESA). The dissertation will analyse the regulation of mergers in South Africa and COMESA. The dissertation will also look at the shortcomings of merger regulation of COMESA and South Africa. In conclusion it will be argued that even though South Africa is not a member state of COMESA its merger regulation facilities are more fully advanced compared to that of COMESA. Last but not least, an analysis of how proper regulation of mergers can contribute to good economic growth will be undertaken.