Competition Amendment Bill to be submitted to Parliament

5th July 2018 By: Terence Creamer - Creamer Media Editor

Competition Amendment Bill to be submitted to Parliament

Economic Development Minister Ebrahim Patel
Photo by: Creamer Media

Cabinet has approved the submission of the Competition Amendment Bill to Parliament.

In a statement released following its July 4 meeting, Cabinet said the amendments provide for an extension of the mandate of the competition authorities and the executive to address high levels of economic concentration, limited transformation in the South African economy and abuse of market power by dominant firms.

The Bill was published in the Government Gazette for public comment in December and had also been discussed with relevant stakeholders.

The amendments primarily seek to strengthen the hand of the competition authorities to tackle economic concentration and transformation. However, other adjustments have also been included in a bid to improve the Competition Act’s alignment with the Constitution and its own preamble, as well as to streamline the functioning of competition institutions.

It also widens the mandate and deepens the powers of the competition authorities in their use of the market inquiry instrument, which empowers the Competition Commission to investigate the general state of a specific market, rather than the conduct of particular firms.

The new architecture also makes the commission’s market-inquiry findings binding, unless challenged in the Competition Tribunal. This represents a departure from the current law, under which the commission is only able to make recommendations.

Economic Development Minister Ebrahim Patel has described the amended Bill as a significant policy shift by government, as it introduces economic concentration as an explicit consideration in all competition proceedings.

However, the Bill has had numerous critics, including those who have argued that the Bill could overload the competition authorities to the point where their effectiveness could be jeopardised.

Others have cautioned that the legislation could constrain the space for other policies aimed at supporting industrialisation, particularly where greater collaboration might be required to bolster certain manufacturing sectors.

Communications Minister Nomvula Mokonyane said the Bill would now be subjected to scrutiny by Parliament, which would also determine the schedule for the processing of the legislation.