29 July 2008 Public Hearings, National Parliament, Cape Town Public Hearings on the Competition Amendment Bill [B31-2008] Presentation to the Portfolio Committee on the Trade and Industry Dr Andrew Barendse Mr Thanduxolo Lubanga Ms Rossana Gell 29 July 2008 Public Hearings, National Parliament, Cape Town

Executive Overview Telkom broadly supports the Competition Amendment Bill (“the Bill”) insofar as it strengthens the Competition Act (“the Act”). Telkom’s written submission mainly addresses issues pertaining to the concurrent jurisdiction and we have confined our oral submission to this aspect. Telkom is of the view that the Bill falls short of adequately addressing the issue of concurrent jurisdiction. Telkom acknowledges that there could be a need of both ex-ante and ex-post regulation in the electronic communications sector. Telkom submits that the amendment should specifically clarify who should deal with ex-ante and ex-post regulation in the sector.

Objectives underlying the Bill The purpose of the Bill is to provide for the amendment of the Competition Act of 1998 (“the Act”) so as to, among others, clarify issues pertaining to the concurrent application of the Act, to introduce new provisions aimed at addressing other practices that tend to prevent or distort competition in the market for any goods or services and provide for personal liability of an individual who causes a firm to engage in cartel conduct. Telkom welcomes government’s intention of strengthening the Act. Telkom particularly notes an attempt through this Bill to further clarify the issue of concurrent jurisdiction in the area of competition law but submits that the Bill has not provided sufficient clarity on this matter.

General Comments Ordinarily, a sector specific regulator normally deals with ex ante regulation and the antitrust regulator or competition authorities would deal with ex post regulation. Accordingly, this Bill will not adequately address the concurrent jurisdiction in respect of competition law in this industry unless such powers conferred in Electronic Communications Act (“the ECA”) are reviewed or clearly redefined. Telkom submits that this issue would be sorted out only when the statutory roles of regulation are distinctly laid out in the respective statutes. MoA between the regulators would not necessarily solve this problem.

Consequential Amendment Telkom has noted the intended amendment to section 67(9) of ECA. Telkom submits that the preceding sub-sections of 67 confer regulation of the industry in all respects to ICASA. Accordingly, the consequential amendment would still not clear the issue of roles and responsibilities in light of those sub-sections. Telkom submits that the unintended result of this consequential amendment to section 67(9) of ECA does not address the problem of forum shopping that is attendant to concurrent jurisdiction. Arguably, section 67(9) currently has been clearing the roles and curbing forum shopping.

Conclusion Telkom broadly supports the Bill in so far as it strengthens the Act. However, Telkom is of the view that the attempt to clarify the issue of concurrent jurisdiction has not been adequately addressed. Telkom suggests that the roles and responsibilities of the competition authorities and the sector specific regulator regarding the application of competition law in the electronic communications industry should be clearly and sufficiently dealt with in both the Competition Act and ECA.

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