Regional Competition Law – A COMESA perspective
The promotion of competition and fair business practices is an essential aspect of market regulation and regional integration. This Trade Brief provides an overview of the COMESA competition regime. It also mentions some of the challenges flowing from flaws in the design of the Regional Economic Communities (RECs).
The COMESA Competition Regulations have the mandate to regulate cross-border conduct by undertakings in the Common Market for Eastern and Southern Africa (the “Common Market”). It is therefore critical for undertakings operating in the Common Market to understand the circumstances under which the Regulations will apply. This is so that undertakings can become aware of their legal obligations under the Regulations and further take the necessary steps to comply with same.
For this reason, just like any other law, Article 3 of the Regulations provides the scope of application of the Regulations. Article 3(2) provides that “These Regulations apply to conduct covered by Parts 3, 4 and 5 which have an appreciable effect on trade between Member States and which restricts competition in the Common Market.”
Care has to be taken when determining what amounts to trade between Member States. The concept of effect on trade is the chief criterion which establishes the jurisdiction of the Regulations. Consequently, the Regulations will not apply to conduct that is not capable of affecting trade between Member States. The application of Regulations is confined to conduct having minimum level of cross-border effect in the Common Market. The concept of ‘trade’ is not limited to traditional exchanges of goods and services across borders; it covers all cross-border activity including establishment. EU Case Law has held that the concept of ‘trade’ also includes situations where conduct affects the competitive nature of the market. Thus, when assessing whether a business practice has the potential to affect trade between Member States, one must ask the question: “how does the conduct affect the structure of the market?”
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