A critical appraisal of South Africa's political approach to competition regulation

Abstract

Authorities have always been conflicted in their enforcement of competition laws. This is due to the fact that they are often tasked with balancing traditional competition goals such market efficiency and consumer welfare and so-called “political” or “socio-economic” goals which are often alien in their nature to traditional competition law goals. Competition regulation in South Africa is certainly no different and if anything, even more conflicted. The Competition Act 89 of 1998 contains a variety of goals listed in section 2, many of which can be regarded as political in nature. Many of these goals also fall within the ambit of the current regime’s redistributive and affirmative action policies. This poses questions regarding whether these goals can be better achieved through policies designed specifically to achieve such goals, whether competition policy and law is even capable of achieving these goals, and whether trying to achieve these goals through the use of competition policy and law will have an adverse effect on competition regulation as a whole. In order to answer these questions this thesis will first examine the historical development of the theories of competition regulation that originated mainly in the US as birthplace of modern competition (antitrust) law during the early twentieth century. These theories will be used to extract the primary goals of competition policy as well as other policy goals that have informed the development of competition regulation. The theories will further be examined to determine how they have influenced the historical development of South African competition regulation. South Africa’s unique history requires that the various policy considerations that informed the development of South African competition law be evaluated. In this regard, specific focus will be placed on the policy objectives identified by the ANC led government in the formulation of the Competition Act. The listed goals of the Competition Act will be examined together with the various provisions relating to horizontal restrictive practices, abuse of dominance, and merger regulation Additionally, the manner in which competition authorities have dealt with and adjudicated on these matters will be examined. In particular, the various landmark decisions of the Competition Tribunal and Competition Appeal Court in matters involving allegations of collusion and abuse of dominance together with their decisions in matters of merger regulation, will be examined to establish how they have sought to balance the competing aims of the Competition Act. The numerous interests that came into play during the adjudication of these matters will also be examined to establish whether these interests were of a competition nature or whether they were of a political nature. This thesis will further examine the recent changes to the Competition Act contained in the Competition Amendment Act of 2018 with the view of establishing whether these amendments have been formulated with the aim of improving the Act’s ability to achieve pure competition goals or whether they are aimed at improving the Act’s ability to achieve “political” goals. Lastly, the convergence between competition regulation and socio-economic development will be examined with the view of determining how competition policy can best contribute to socio-economic upliftment. What is the most appropriate medium through which competition policy can contribute to the achievement of political goals? Various recommendations on how competition policy can best be used to this end without compromising on the achievement of pure competition goals will be discussed. The overall aim will remain to determine whether South Africa’s political approach to competition aids in the achievement of effective competition, or whether this political approach hampers the attainment of same.