The Competition Commission confirmed on Wednesday that it would proceed with a market inquiry into the private healthcare sector amid concerns about pricing, costs and the state of competition and innovation in private healthcare.

Manager of the commission’s advocacy and stakeholder relations division Trudi Makhaya told members of the media that key stakeholders had called for an assessment.

The announcement followed President Jacob Zuma’s announcement in the Government Gazette on March 8, that Section 6 of the 2009 Competition Amendment Act would come into effect on April 1, granting the commission the power to conduct formal market inquiries, including the selection, initiation, conduct and outcomes of such inquiries.

Makhaya said the implementation of Section 6 not only empowered the commission with formal powers to conduct market inquiries, but also outlined the process of soliciting input from the public and publishing a particular inquiry’s terms of reference in the Government Gazette.

Further, the amendment provision would provide sufficient information about the nature of a particular inquiry, allowing those affected to gather information and prepare themselves for that inquiry.

The provision also outlined the various structural issues dealt with in the Act, illustrating, for instance, how hearings are to be conducted, as well as when an inquiry needed to be undertaken, explained Makhaya.

She said the provision was about the general state of competition in a market, initiated to further the purposes of the Competition Act.

Therefore, an inquiry would be initiated when there was reason to believe that competition in a market would be restricted, distorted or eliminated.

“The provision also discusses the outcome of the market inquiry, which may include recommendations to Economic Development Minister Ebrahim Patel for new or amended policy, legislation or regulations – or recommendations to other regulatory authorities in respect of competition matters,” added Makhaya.

On the basis of information obtained during a market inquiry, the commission would initiate a complaint, which would be settled or referred to the Competition Tribunal without further investigation. Alternatively, it would lead to further investigation.

“The commission could also conduct an inquiry and elect to do nothing in the event that nothing seems to warrant any action,” she said, adding that a market inquiry would allow for the understanding of a market’s dynamics.

“This includes what a market’s issues are and what the best ways are to resolve them in a relevant way to enable the market to progress without necessarily zooming in on the behaviour of specific companies. We’re looking at the market as a whole,” she explained.

Competition Commission Commissioner Shan Ramburuth acknowledged that the most pertinent question relating to the commission’s new investigative powers would be what markets it would look into.

“This has to be a considered, rational decision that must be based on good reason and fact,” he said, adding that the commission would decide on objective criteria on the basis of its experience in other areas of the commission’s work, complaints from the general public and research that would be conducted to deepen the commission’s understanding of each market sector.

He, too, confirmed that the commission was working on a market inquiry into private healthcare and said the commission would send out a formal announcement on the subject when it was ready to do so.

Meanwhile, the commission had started settlement negotiations to fast-track settlements for firms in the construction sector and hoped to conclude the process in the near future.

Makhaya said the commission would divulge details of the investigation regarding consent agreements once the case was referred to the tribunal, which could impose an administrative penalty not exceeding 10% of a firm’s yearly turnover.

She added that, within the principles of the construction fast-track project, the consent agreement would include all the projects the firms have disclosed to the commission as subject to anticompetitive behaviour.

Projects would not be handled as discrete cases, as would be the case in the regular course of prosecution.

“This has expedited the process and has also meant that fines are lower than would be the case if a project-by-project policy had been adopted,” she explained.