Willemien Viljoen, tralac Researcher, discusses regional cooperation on competition matters in southern Africa

Although competition policy is bounded within national jurisdiction, regional integration, in the form of cross-border investment and intra-regional trade activities, requires that competition law and policy have an increasingly regional character. Markets increasingly transcend national borders, demonstrating that firms are taking advantage of regional and global market developments. In addition firm behaviour in national markets can have various cross-border implications. Due to enhanced integration efforts in Africa; and as intra-regional trade and cross-border economic activities intensify, the importance of competition policy at national, regional and multilateral level increases.

As integration deepens, transnational restrictive practices become more difficult to address. The emergence of multinational companies bring with the danger that these firms can be tempted to engage in anti-competitive practices. The impact of these activities is often felt in a multiplicity of jurisdictions; impacting countries outside the jurisdiction of the offending firm’s home country. For this reason it is important to develop a regional position and process to address such practices through cooperation.

The importance of regional cooperation on competition issues was recognised in both the Southern African Customs Union (SACU) Agreement and the Southern African Development Community (SADC) Trade Protocol. In terms of Article 40 of the SACU Agreement each member state must have competition policy in place and member states must cooperate with one another to enforce these competition laws and regulations. Article 25 of the SADC Trade Protocol requires member states to implement measures to promote competition and provide a framework for cooperation among members. In accordance with Article 25, the SADC Declaration on Regional Cooperation in Competition and Consumer Policies calls for a phased in and gradual approach to effective cooperation in the application of competition and consumer protection laws to address cross-border anti-competitive practices. Article 19 of the SADC Protocol on Trade in Services (yet to be implemented) will also place an obligation on member states to enhance cooperation with regards to mechanisms and initiatives under the Protocol, technical assistance and capacity building; and to notify enforcement activities undertaken which can impact interests of another member.

However, compliance with these commitments was lacking until the end of 2015 when South Africa and Namibia were the first SACU and SADC member states to sign a Memorandum of Understanding (MoU) to formalise bilateral cooperation in competition related matters which are consistent with their national laws (Article 82(4) of the South African Competition Act of 1998 and Article 16(1)(b) of the Namibian Competition Act of 2003 respectively) and regional obligations.

The MoU calls for cooperation between the Competition Commission of South Africa and the Namibian Competition Commission when enforcement activities are undertaken by both institutions with regard to a similar or related matter. When both parties are undertaking an investigation or a proceeding (in terms of their national law) the parties can cooperate to the extent that is appropriate and practicable, guarding against the violation of confidentiality principles in domestic laws and regulations. An Illustrative list of the form of cooperation activities which can be undertaken is also included in Article 4 of the MoU. These include mutual assistance in investigations and enforcement proceedings, information and staff exchanges, sharing experiences and exchanging views on substantive policy issues. Although it remains to be seen how the Commissions will give effect to this arrangement as the practical implementation of these cooperation activities are yet to be finalised, the logic on which the MoU is based is welcomed as cooperation can lead to mutual benefits. Effective enforcement cooperation advances the common interest by sharing information about the facts of the investigation, theories about markets and remedies to rectify behaviour. Cooperation can also facilitate capacity building, develop a convergent approach to the analysis of markets and appropriate remedies, expedite the enforcement process and control the flow of information (especially the disclosure of confidential information).

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Sources:

Damtoft, R.W. 2003. Bilateral and Plurilateral Cooperation in Competition Cases. [On]. Available: www.oecd.org/competition/37921908.pdf

SADC Declaration on Regional Cooperation in Competition and Consumer Policies (2009)

Memorandum of Understanding between Competition Commission South Africa and Namibian Competition Commission in the field of competition law, enforcement and policy (2015)

The Competition Act of South Africa, 1998 (Act No. 89 of 1998)

The Competition Act of Namibia, 2003 (Act No. 2 of 2003)

SACU Agreement, SADC Protocol on Trade and SADC Protocol on Trade in Services