1. National Competition Conference Public Interest Consideration in Competition Analysis Magdeline Gabaraane Director, Mergers and Monopolies Selebi - Phikwe 22 March, 2018

2. Outline PRESENTATION OUTLINE Introduction Mandate
Main elements of the Act
Consideration of Public interest in competition analysis
Effect of public interest considerations on jobs
Conclusion

3. CA established in April 2011.
INTRODUCTION
Government of Botswana adopted the National Competition Policy for Botswana in July 2005
Informed the development of the Competition Act of 2009.
CA established in April 2011.

4. The Competition Authority enforces the Act which prohibits certain agreements, practices and conducts that are aimed at preventing or lessening competition in the market.

5. MAIN ELEMENTS OF THE ACT
VERTICAL AGREEMENTS
- Agreement between enterprises operating at different levels of the production chain
HORIZONTAL AGREEMENTS
- Agreement between two or more actual competitors (operating at the same level of production chain)
ABUSE OF DOMINANCE
--Dominance can be acquired inter alia by: 1) statutory protection
2) M&A’s
3) organic growth
4) anti-competitive advantage
MERGERS
-Acquisitions
-Takeovers
- Amalgamations
-Joint Ventures

6. Factors (non-economic) considered by a Competition Authority during the assessment of the competition effects of a conduct, practice or agreement.
Pursue the country’s public policy goals – protection of employment and exports; growth of SMME’s; competitiveness of local industries etc.
Public interest can be used to justify abuse of dominance practices, anti-competitive mergers and exemption for anti-competitive agreements.
More common in developing economies.

7. Public Interest Considerations: Abuse of Dominance
AOD practices prohibited under section 30 of the Act
AOD defined as enterprises with individual market share of 25%; combined market share of 50%
Dominance not an offence in itself – it’s the conduct that matters.
Assessment of Abuse of Dominance conducts
Considers whether a dominant position exists
Whether an AOD practice has occurred
May consider whether the agreement or conduct –
Maintains/promotes exports and or employment
Advances strategic or national interest
Provides social benefit which outweigh the harm
Enhance CEE and SMME
Enhances effectiveness of industrial development programs.

8. Public Interest Considerations: Merger Control
Notifiable transactions
When a business(s) acquires control over another – e.g., purchase of shares
Transactions that meet the notification thresholds - P10 million annual turnover or asset value of target enterprise; post-merger market share of 20%.
Assessment of mergers
Prevention or substantial lessening of competition test
Acquisition of dominant position
Public interest considerations (not exhaustive)–
Public benefit that outweighs harm to competition
Improve production/distribution of goods and services
Promote industrialisation
maintain/promote exports or employment
Advance CEE or SMME

9. Public Interest Considerations: Exemption Assessment
Prohibited Agreements
Prevent or substantially lessen competition
Section 32 allows Authority to assess such agreements and permit them for a defined duration.
Exemptions Assessment
Authority may consider offsetting public benefits –
Maintain lower prices, higher quality, greater choice
Improve production/distribution of goods and services
Promote industrialisation
maintain/promote exports or employment
Advance CEE or SMME

10. Effect of PIC on Jobs Merging parties Sector Jobs maintained
Blue Star Diamonds Botswana & Blue Star Diamonds DMCC
Financial
181
Golden Asset Management & Peermont Holdings
Hotel and hospitality
607
Get Bucks & Sure Choice 9
The Prepaid Company (Pty) Ltd & 3G Mobile (Pty) Ltd
ITC 20
Lacrose (Pty) Transport Holdings (Pty) Ltd
Transport and logistics
191
Soihl Hong Kong Holding Limited & Chevron Botswana
Energy 8
Botswana Venture Investments (Pty) Ltd & Waco International Holdings (Pty) Ltd
Retail 73

11. The CA has considered public interest in its merger decisions;
The factors considered have had the effect of:-
Maintaining jobs
Enhancing local procurement
Enhancing entry of players in identified industries, e.g., petroleum
Therefore, public interest considerations in competition analysis can indeed save jobs…..

12. Thank you! Competition Authority Plot 28, Matsitama Road, Main mall
Private Bag 00101
Gaborone, Botswana
(+267)
(+267) Competition Authority - Botswana @CompetitionBots