Editors Note: Quarterly Review February 2015

Thando Vilakazi

The past year has been an interesting one in terms of developments in the enforcement of competition law in various African countries. Through the Review, we have analysed several of these developments with a view to sharing information and building a knowledge base on key cases and market arrangements that have an effect not only in domestic markets, but regionally as well. This includes sharing the current knowledge and research on competition issues such as in the sugar and cement industries, telecommunications with a specific focus on mobile money, pending cases in the pay-tv market, cross-border arrangements in the beer industry, the competition effects of tax evasion, and regional competition in road freight.

Authorities across the region are making significant progress in terms of achieving their mandates. In Zimbabwe, the CTC recently has been able to foster interactions between the Reserve Bank of Zimbabwe and the sector regulator for telecommunications, POTRAZ, in addressing competition concerns regarding pricing and access in mobile money services. Similarly, the growth of mobile money in Kenya speaks to a regulatory environment which is geared to allow rivalry in this sector, with a number of firms recently receiving licences to enter the market. In our previous issue, we wrote about how the incumbent firm, Safaricom, had reduced their tariffs apparently in response to the imminent entry of rival firms. 

In South Africa, the authority has recently issued draft guidelines for public commentary on the setting of administrative penalties following recent decisions of the Tribunal and Competition Appeal Court. This comes at a time when a number of other authorities are considering introducing leniency programmes. This is of course difficult as the authority needs to balance the objectives of deterrence (setting fines which are high enough to deter conduct), with the incentives for parties to come forward to reveal conduct and take advantage of settlement and leniency processes. If the penalties agreed in settlement are too high, the authority runs the risk of respondents deciding to contest cases at the Tribunal if they consider that the discounts available from settlement are not sufficient. 

The authority has also issued guidelines on the evaluation of public interest factors in competition assessments. Both of these frameworks attempt to address concerns which are notoriously difficult to evaluate and in which firms increasingly require certainty and the authorities, rightfully, prefer to leave some room to exercise discretion. In this regard, CCRED at its inaugural Annual Competition and Regulation (ACER) Week in March will consider penalties and settlements, as well as the public interest guidelines in an upcoming event in our Public Platform series. 

In this issue, we provide analysis of recent mergers in the South African telecommunications sector, the global merger in the cement industry between Holcim and Lafarge, the new COMESA merger guidelines, and the call termination rates debate in South Africa. 

The Review is an important tool for disseminating the latest knowledge and thinking around key issues in competition policy in the region. In this year, we hope to grow the platform to one which not only showcases the developments in jurisprudence and the application of competition economics in the analysis of cases, but one which also provides insights and shares the latest research on broader topics related to industrial policy, inclusive growth and regional development. This is precisely in line with the complementary role that competition law and policy should play relative to broader development objectives in increasing participation and addressing anticompetitive conduct which inhibits growth. 

We trust that you will find this Review interesting, and relevant to your work.