1. Overview of Competition Laws of some African Jurisdictions A Presentation by Manas Kumar Chaudhuri Additional Registrar Competition Commission of India ICAI 28 August, 2005 New Delhi

2. 2 Competition Law & Policy African Countries 39 countries studied 7 countries have Competition Law in place 6 more countries are about to have Remaining 26 do not have as of now

3. 3 Countries which have the law Kenya Mauritius Namibia South Africa Tanzania Zambia Zimbabwe

4. 4 Countries which are in the process of enacting the law Angola Cameroon Egypt Ghana Malawi Togo

5. 5 Major objectives of Competition Policy Maintenance of free competition Freedom of trade, freedom of choice and access to market Achievement of economic efficiency Prevention of abuse of economic power Lessening adverse effect of government intervention in the marketplace

6. 6 Competition Policy vs Law Competition policy aims at correcting market failure arising from imperfect competition Whereas, Competition Law attempts to legally implement the competition policy in some cases by per se rule in others by rule of reason by non-enforcing mechanism of Competition Advocacy

7. 7 Objective of the Law in Africa vis-à-vis Indian Law Kenya To encourage competition in the economy by prohibiting restrictive trade practices, controlling monopolies, concentrations of economic power and prices and for connected purposes India To establish a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom to trade carried on by other participants in markets in India

8. 8 Objective of the Law in Africa vis-à-vis Indian Law (contd.) Mauritius To establish legal framework for the control of restrictive business practices with a view to enhancing competition through measures designed to promote efficiency, adaptability and competitiveness in the economy for the end purpose of widening the range of customer choice in obtaining goods and services at a fairer and more competitive price. India To establish a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom to trade carried on by other participants in markets in India

9. 9 Objective of the Law in Africa vis-à-vis Indian Law (contd.) Namibia To safeguard and promote competition in the Namibian market; to establish the Namibian Competition Commission and make provision for its powers, duties and functions; and to provide for incidental matters India To establish a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom to trade carried on by other participants in markets in India

10. 10 Objective of the Law in Africa vis-à-vis Indian Law (contd.) South Africa To provide for the establishment of a Competition Commission responsible for the investigation, control and evaluation of restrictive practices, abuse of dominant position, and mergers; and for the establishment of a Competition Tribunal responsible to adjudicate such matters; and for the establishment of a Competition Appeal Court; and for related matters India To establish a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom to trade carried on by other participants in markets in India

11. 11 Objective of the Law in Africa vis-à-vis Indian Law (contd.) Tanzania To promote and protect effective competition in trade and commerce, to protect consumers from unfair and misleading market conduct and to provide for other related matters India To establish a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom to trade carried on by other participants in markets in India

12. 12 Objective of the Law in Africa vis-à-vis Indian Law (contd.) Zambia To encourage competition in the economy by prohibiting anti-competitive trade practices; to regulate monopolies and concentrations of economic power; to protect consumer welfare; to strengthen the efficiency of production and distribution of services; to secure the best possible conditions for the freedom of trade, to expand the base of entrepreneurship India To establish a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom to trade carried on by other participants in markets in India

13. 13 Objective of the Law in Africa vis-à-vis Indian Law (contd.) Zimbabwe To promote and maintain competition in the economy of Zimbabwe; to establish an Industry and Trade Competition Commission and to provide for its functions; to provide for the prevention and control of restrictive practices, the regulation of mergers, the prevention and control of monopoly situations and the prohibition of unfair trade practices; and to provide for matters connected therewith India To establish a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom to trade carried on by other participants in markets in India

14. 14 Analysis of objectives Indian Law Prevention of adverse effect on Competition Ensuring freedom of trade carried on by other participants in markets [ Not available in the objectives of African Competition Laws ]

15. 15 Analysis of objectives (contd.) Promotion of competition in the market/advocacy Indian Law Kenyan Law Mauritian Law Namibian Law Tanzanian Law Zambian Law Zimbabwe Law

16. 16 Analysis of objectives (contd.) Competition Advocacy Section 49 in Indian Law Section 16 (1) (a) to (d) and (g) in Namibia Section 6(2) (d) (f) and (g) in Zambia Section 9 in Mauritius Section 93 in Tanzania Section 5(1) (a), (d), (e), (f) in Zimbabwe

17. 17 Unique feature Mauritius Competition Advisory Council Tanzania National Consumer Advocacy Council

18. 18 Unique feature (contd.) Mauritius Chairman of the Council and 12 other members Chairman and members are paid fees Council shall sit at least 4 times a year To advise Minister, to promote activities to raise awareness, to maintain effective communication with business and consumers and to promote research in emerging trends [ sections 8 and 9 of the Mauritian Act ]

19. 19 Unique feature (contd.) Tanzania The Council shall have 5 to 10 members appointed by Minister Minister shall appoint one of the members as Chairman of the Council Shall sit at least 4 times in a calendar year of 12 months Primarily responsible to promote competition issues [ sections 92 to 95 of Tanzanian Law ]

20. 20 Composition of Commission India Chairperson and not less than two and not more than ten other members Kenya One Commissioner and such other officers as may be necessary [section 3(1)] Restrictive Trade Practices Tribunal (Tribunal) shall consist of a Chairman, who shall be an advocate of not less than 7 years of standing and not less than two and not more than four other members appointed by the Minister [section 64]

21. 21 Composition of Commission (contd.) Mauritius Office of Fair Trading – One Director [section 4] Competition Appeal Tribunal – a Chairperson and a Vice Chairperson, each of whom shall be either a barrister or an attorney-at-law of not less than 10 years standing, appointed by the PM after consultation with the Leader of the Opposition; 4 other members who shall be persons knowledgeable in consumer affairs, business, finance, economics or management appointed by Minister of Commerce [section 6]

22. 22 Composition of Commission (contd.) Namibia Commission shall consist of a chairperson and not less than two and not more than four other members all of whom to be appointed by the Minster of Trade and Industry [section 5(1)] Members must have expertise in industry, commerce, economics, law, accountancy, public administration or consumer affairs The Minister may appoint for each member a person to be the alternate of the member, who shall act only in the absence of regular members [section 6]

23. 23 Composition of Commission (contd.) South Africa Commission consists of a Commissioner and one or more Deputy Commissioner, appointed by the Minister of Trade and Industry [section 19(2)] Tribunal consists of a Chairperson and not less than three, but not more than ten other women and men appointed by the President, on a full-term or part-time basis, on the recommendation of the Minister [section 26 (2)] Appeal Court – consists of at least three judges, appointed by the President on the advice of the Judicial Services Commission, each of whom must be a judge of the High Court [ section 36 (2)]

24. 24 Composition of Commission (contd.) Tanzania Commission - shall consist of five members – one Chairman, who shall be a non-executive appointed by the President 3 non-executive members appointed by the Minister in- charge of Competition Commission 1 Director General [section 62 (6)] Tribunal – shall consist of a Chairman who shall be a sitting judge of the High Court and 6 other members to serve on part-time basis [section 83(2)]

25. 25 Composition of Commission (contd.) Zambia Commission – shall consist of One each from Ministries of Finance, Commerce & Industry = 3 One from the Zambian Bureau of Standards Two from Zambian Council of Commerce One from the Law Association One from the Federation of Employers One from the Congress of Trade Unions Two from Consumer groups One from the Engineering Institution One from the Accounting Profession Economics Association of Zambia Total = 14 [ Schedule to Section 4]

26. 26 Composition of Commission (contd.) Zimbabwe Commission shall consist of not fewer than five and not more than ten members appointed by the President [section 6(1)] President shall designate one amongst the members as Chairman and vice-chairman of the Commission [section 12 (1)]

27. 27 Contours of Competition Law Anti-Competitive Agreement Abuse of Dominant Position Mergers and Amalgamation Unfair Trade Practices Competition Advocacy International co-operation Effects Doctrine

28. 28 Anti-competitive agreements Horizontal – viz. cartel, bid-rigging, collusive bidding Vertical – viz. tie in arrangement, resale price maintenance Agreements mean any kind of understanding not necessarily written can also be action in concert

29. 29 Abuse of Dominant Position Dominant position – market share Predatory Pricing – aim to drive out competitors from the market Directly or indirectly imposes unfair or discriminatory condition or price in purchase or sale of goods and services Limits or restricts production of goods/services Denial of Market access

30. 30 Mergers and Amalgamations A merger occurs when one or more firms directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another firm Threshold limits – assets or turnover Notification – compulsory or optional Commission – either allows merger, modifies or rejects merger

31. 31 Unfair Trade Practice Indian Competition Act excludes Indian MRTP Act has this All 7 African jurisdictions have this as an integral part of their function In India the UTP cases shall be within the domain of the Consumer Protection Act and the Commission established thereunder after dissolution of MRTPC

32. 32 Competition Advocacy Non-enforcing mechanism of compliance of Competition Policy Exists in all jurisdictions of Africa as well as in India Encompasses promotion of the law, undertaking market studies to understand business practices, imparting training of Commission manpower as well as that of stakeholders Disseminating judgments/guidelines to general public for information and better compliance of the law

33. 33 International Co-operation & Effects Doctrine Indian Law specifically provides in proviso to section 18 and section 32 of the Act Section 7 of the Tanzanian Law talks about Extra-territorial operation Section 82(4) of the South African law provides exchange of international information on competition issues Namibia and Zimbabwe under sections 3 provide for effects theory Kenya, Mauritius and Zambia appear silent on these issues

34. 34 Consent Order Section 49D of the South African Act provides for such order Competition Commission and respondent agree on the terms of an appropriate order Competition Tribunal, without hearing any evidence, may confirm but must make an order after hearing a motion for a consent order Complainant however is eligible for award of civil damages, if any, as well enjoys a right to get the practice of the respondent being declared as void

35. 35 Consent Order (contd.) Section 40 of the Namibian Act also provides for such order Complainant however retains the right to be compensated by way of an award of damages [ Indian Law does not provide expressly for such a provision but out of court settlement is in vogue in India ]

36. 36 Confidentiality Section 57 of the Indian Law imposes restriction on disclosure of information relating to an enterprise Section 48 of the Tanzanian Act provides for similar protection to undertakings Section 23 (1) of the Mauritian Act gives identical protection to respondents Regulation 9 of the Zambian Act provides similar protection

37. 37 Confidentiality (contd.) South Africa Section 44 – Right of informants to claim confidentiality Section 45 – Disclosure of information in a prescribed manner Section 45A – Commission to make restricted use of confidential information

38. 38 Commission – vs – Sector Regulators Section 19,20, 21 read with sections 29-31, Indian Commission shall have power to investigate matters that may arise out of a complaint, reference against any Statutory Authority including sector regulator Section 21 specifically empowers the Commission to give an opinion on competition issues to statutory authority Overlap jurisdiction may, with passage of time, have to be sorted out through co-operation and harmonization and Judicial review

39. 39 Commission – vs – Sector Regulators (contd.) Section 21 (1)(h) read with section 82 of the South African law provides for co- ordination and harmonization between sector regulators and the Commission Section 65 (2)(k) and (4) of the Tanzanian Law provides for consultation with and participation in the proceedings of regulatory authorities by the Commission

40. 40 Commission – vs – Sector Regulators (contd.) Section 67 of the Namibian law provides for relationship with regulatory authority for co-ordination and harmonization of actions

41. 41 Intellectual Property Rights Trade Marks Copyright Patent Geographical Indications Design Act Plant Breeder Protection Act Semi Conductor Act [Are exempted from the purview of Competition Law]

42. 42 Summing up Dominance is not frowned upon but its abuse Cartel, price-fixing, bid-rigging etc., are per se void hence most pernicious forms of anti- competitive practices Efficiency enhancing activities may not be bad e.g. JVs but JVs which are mergers in disguise shall have to be investigated thoroughly Indian Law under section 35 permits Chartered Accountants to appear before the Commission

43. 43 Summing up (contd.) Mergers are ex post activities and mostly enhance economic growth – hence not always anti-competitive South Africa – M & A statistics for three years TotalPWAC 225021021302001-02 202010719452002-03 278010826272003-04 P : Prohibited, W : Withdrawn, A : Allowed, C : Conditional

44. 44 Important References International Competition Network OECD UNCTAD World Bank Institute Federal Trade Commission, USA Department of Justice, USA CCIs website : www.competitioncommission.gov.in

45. 45 THANK YOU cci-manas@nic.in