1. Presentation to the National Council of Provinces SELECT COMMITTEE ON ECONOMIC AND FOREIGN AFFAIRS by Shan Ramburuth Competition Commissioner 6 March 2007

2. Why competition policy? Fairness and access Prices and Quality Innovation Consumer Choice

3. Competition Commission’s activities Prosecution of anti-competitive behaviour Merger control Advocacy

4. of the Act Application of the Act All economic activity within or having an effect within South Africa Conduct of all enterprises: public or private Concurrent jurisdiction: -Sector regulators -“Forum Shopping” -MOUs with ICASA, NER, Postal Services Regulator, negotiating with the SARB and FSB

5. The Competition Authorities The Competition authorities EXTERNALPARTIESEXTERNALPARTIES Competition Commission Competition Tribunal Competition Appeal Court Appeal of Tribunal decisions Referral of complaints & large mergers Exemption applications, complaints and merger notifications Appeal of Tribunal decisions Appeal of exemptions, intermediate mergers or non- referral decisions, defence of referral decisions

6. Enforcement: 2005/2006 Complaints (105) Investigations (134) Non-refer after screening/further investigation (74 ) Referral (6) Respondent defends Respondent successfully defends Interlocutory applications Consent order (8) CT approves/ agrees with CC

7. Price fixing: 2005/2006 General Motors, Daimler Chrysler, Nissan, Volkswagen, Citroen: Minimum resale price maintenance Settlement, consented to penalty totaling R25 150 000 Subaru and BMW: Fixing of prices and/or trading conditions Settlement, consented to penalty totaling R 8 500 000 Lufthansa Fixing of trading conditions Settlement, consented to penalty of R8 500 000

8. South African Airways (SAA) cases: 2005/2006 Litigation in Tribunal (Nationwide complaint) Abuse of Dominance: Travel agents’ incentives Tribunal imposed penalty: R25 million Consent Agreements: Collusion, code sharing with Lufthansa: R20 million Collusion, fuel levies with SA-Airlink,-Express, Comair: R20 million Abuse of Dominance, travel agents’ incentives (Comair complaint): R15 million

9. Current cases Harmony Gold/Mittal Steel Excessive pricing Tribunal’s decision pending SAVA/Telkom Access to essential facility Litigation in the High Court over jurisdiction Ansac/Botash Fixing of trading conditions Many interlocutory applications, appeals Tribunal must still hear the merits of the case

10. Current cases Profert/Sasol Refusal to supply Referred to the Tribunal CC/Dairy Processors (Clover, Parmalat, Ladismith Cheese, Woodlands Dairy, Lancewood, Nestle and Milkwood Dairy) Price fixing of raw and retail milk Referred to the Tribunal CTH Trading/Senwes Abuse of dominance – exclusionary conduct and price discrimination Referred to the Tribunal

11. Current cases CC vs Blue Ribbon, Sasko and Albany Fixing of prices and trading conditions Western Cape investigation widened to national Big Daddy vs South African Breweries Dividing markets, minimum resale price maintenance and exclusionary conduct Barnes Fencing vs Mittal Steel (Long steel) Price fixing and price discrimination

12. Maintenance or promotion of exports Promotion of SMMEs & business owned by HDIs to become competitive Stop decline in an industry Economic stability of a designated industry Intellectual property rights Professional rules Exemptions

13. Corporate Leniency Policy Introduced 6 February 2004 Regulate cartel behaviour Indemnity to firms providing information on cartel “First through the door” Assist CC in case against other cartel members Not instigator 10 applications to date, 6 granted conditional leniency

14. Merger control Change of control Small, intermediate and large Test: -Substantial lessening or preventing of competition -Technological, efficiency and pro-competitive justifications -Public interest grounds: Effect on particular industrial sector or region Employment SME’s or firms owned by HDIs to become competitive Ability to compete in the international market

15. Merger notifications

16. Prohibited mergers: 2005/2006 4 out of 394 Eyethu/Ultra Registrars Small merger, abandoned Sasol/Engen Large merger, prohibited by Tribunal Foskor/Sasol’s phosphoric acid business Large merger, abandoned Medicross/Prime Cure Large merger, prohibited by Tribunal, allowed by CAC

17. Conditional approvals: 2005/2006 14 out of 394 IntelSat/PanAmSat Intermediate merger, behavioural conditions AP Moller-Maersk/Royal P&O Nedlloyd NV Large merger, structural conditions Tiger Bands/Ashton Canning Large merger, employment-related conditions

18. Current merger cases: 2007 Telkom/BCX Prime Media/Khaya FM Pick ‘n Pay/Fruit and Veg City Mila Nutri/Yara SA

19. International contributions International Competition Network Hosted 2006 conference Organization for Economic Development Observer status since 2006 United Nations Committee for Trade and Development Competition Committee

20. Advocacy FAIS ombud’s referral: Changes to the Short Term Insurance Act - “untying” insurance and bond Pension Funds Adjudicator’s ruling on switching retirement annuity funds Postal Regulator’s competition guidelines Comments on the MIDP Workshops with Estate Agents Board Joint working committee with ICASA

21. The banking inquiry National Treasury’s research Competition Commission’s research Market transparency Voluntary submissions Public hearings Recommendations on: -Access to payment system -Bank charges

22. Way forward - strategic planning Increase staff morale and motivation Align structure and work processes with strategy Importance of approach and methodology Knowledge management Communication and advocacy