Pradeep S Mehta

Secretary General, CUTS International

10th July, 2017; Geneva

Evolution of Competition Law in

the World and in Africa

Outline

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Introduction

Competition Policy vis-à-vis Competition Law

Benefits of Competition

Evolution of CPL across the World

Present Scenario

Present trend of CPL enforcement in Africa

Regional Level

National Level

Challenges of CPL enforcement in African Countries

Conclusions

Introduction

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Why do we need competition?

Impetus to promote competition

Trade and economic liberalisation have aided

competition in the market

Anti-competitive practices negate the gains of

liberalisation

Is Competition Law Sufficient?

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No, because…

Cannot curb market distortions emanating from policies and practices of government (central as well as states) Examples: government procurement policy and rules, anti-dumping measures,

public sector policy, etc

Cannot facilitate ex-ante assessment of government policies to check market-distortionary elements

Competition Policy: To address the policy-induced competition distortions

Australia and Botswana is a classic case

Competition Policy vis-à-vis Competition Law

FDI Policy

Trade Policy

Industrial Policy

Disinvestment Policy

Fiscal Policy

IPR Policy

Labour Policy

Procurement Policy

… others …

Benefits of Competition

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CPL and SDGs

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Lack of competition hurts mostly the poorest consumers leaving many

behind.

Effective competition regime leads firms to become more competitive,

increase innovation and widen consumer choice.

A healthy competition regime can help achieving several SDGs in

particular SDGs 8 & 9: (inclusive growth and build resilient infra) directly

and others indirectly

Identifying the key sectors and enforcing CPL on those sectors is the way

out for resource crunch developing countries.

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“Competition Policy led to large price reductions, innovations, and

product development” - - The Benefits from Competition: Some illustrative UK Cases, University of

East Anglia, May 2004

“Ensuring fair competition in the market is an essential ingredient for

enhancement and maintenance of competitiveness in the economy” - -

EU White Paper on Competitiveness, 1994

“Strong competition policy is not just a luxury to be enjoyed by rich

countries, but a real necessity for those striving to create democratic

market economies” - - Joseph Stiglitz, Project Syndicate, August 2001

Benefits of Competition Excerpts from Select Studies

History of CPL across the World

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Canada first country to adopt the law in 1889

US was the second country to adopt the law in 1890

Finland’s court judgment in 1837 on forest producers

In France, the initial foundations of a competition law were

laid in the Chapelier Law of 1791

India recognised cartels in 300 BC, Kautilya

In 1995, only about 35 countries with a competition law,

today the number is nearly 130 countries and counting….

Present Scenario

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Australia: NCP adopted in 1995 by federal and provincial governments

throughout the country

Hong Kong: Comprehensive Competition Policy Framework adopted in

1997, now competition law also

Mexico: National Programme for Economic Competition 2001-2006

adopted

Botswana: Competition Policy presented to Parliament in May 2005 and

adopted in July 2005

Fiji, Malawi and Uzbekistan are other countries that have adopted while

Mozambique, Ghana and Uganda are in the course of adopting one

Present trend of CPL enforcement in

Africa

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Steady growth in competition legislation-both at national and regional level

Change of approach: from a narrow focus on merger control to wider focus on

enforcement

27African countries and 5 regional authorities now have competition laws

25 jurisdictions have operational Competition Authorities

59% of African Competition Authorities signed MoUs with sector regulators,

mostly in telecommunication, banking, energy and transport

At least 17 Authorities provide opinions on Government Interventions to

minimise restrictions on competition, but opinions are neither mandatory nor part

of a formal process

Present trend of CPL enforcement in

Africa

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At least 16 Competition Authorities have Search and Seizure powers but

few have carried out raids

At least 7 countries have Leniency Programme

Only South Africa and Mauritius have received application concerning

Abuse of Dominance

Merger control is operational in at least 17 out of 26 jurisdictions

In the past few years, several countries have stepped up their enforcement

capacity and implementation of competition laws. Botswana, Egypt,

Kenya, South Africa and Zambia are leading in competition enforcement.

Regional Level I

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COMESA Competition Commission (CCC) established by

COMESA Competition Regulations, brought it’s competition

legislation into operation in January 2013

In EAC, East African Community Competition Authority

(EACCA) is trying to bring the Authority into full operation to

enforce EAC Competition Act, 2006. They are also consulting

COMESA to avoid duplication and harmonise measures.

Regional Level II

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SADC does not enforce a regional competition law regime, but provides a

framework based on the Declaration on Regional Cooperation on

Competition and Consumer Policies, signed in September 2009. Later, in

May, 2016 competition authorities also signed an MOU on cooperation.

CEMAC, enacted merger control regulations but so far not much has

been done

WAEMU has one Community Competition Law. In addition, each of it’s

member except Bénin and Guinéa-Bissau has a national competition law.

Agreement to establish the ECOWAS regional competition law was also

signed but things are ambiguos

Enforcement Activities at National

Level: South Africa

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South Africa leads among African countries in terms of enforcement.

South African Competition Commission (SACC), which is in operation

since 1999, has raised more than R4bn (US$300mn) in cartel fines in the

cement, construction, bread and milk industries.

SACC’s leniency policy has been particularly successful, having assisted in

the uncovering of numerous cartels since 2008.

Although SACC continues to focus on cartel conduct, it has also pursued

a number of abuse of dominance cases.

Enforcement Activities at National

Level: Botswana

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The Government of Botswana adopted the National Competition Policy for

Botswana in July 2005 and the Competition Act in 2009

Some key actions: review of the National Development Plan (NDP 10),

revision of Trade & Liquor Acts, replacement of Telecommunications

Act

Formation of various committees such as National Doing Business

Committee, Technical Committee on Competition Policy, National

Economic Diversification Council, High Level Consultative Council

Other African Countries

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Principal focus of Competition Authority of Kenya (CAK) is on

enforcement, especially in the financial sector, advertising and cement.

CAK has also launched a Special Compliance Process (SCP) as a "soft"

enforcement tool for trade associations

CAK has two voluntary disclosure programmes applicable to trade

associations in the financial, agriculture and agro‐processing sectors

The Act was amended in December, 2016 in order to bring the Kenyan

Competition Act in line with international best practice.

CPL status of some other African

countries

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Zambian Competition and Consumer Protection Commission (CCPC)

has published draft settlement guidelines in addition to its leniency

programmes. CCPC has also conducted three dawn raids in the maize

milling sector in 2015

Tanzania, Namibia and Madagascar are at the drafting stage for leniency

programme while Mauritius already has one.

In 2013, Mozambique adopted its long awaited competition regulations

Ethiopia passed a proclamation in March 2014 to establish the Trade

Competition and Consumer Protection Authority,

Challenges for CPL in African countries

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Champions

Political will

Interface problems: Sector Regulators

Interface of multiple regional arrangements

Stakeholder awareness

Resources & Capacity

Possible Solutions

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Doing a CBA to check if the costs of such policy instrument are

outweighed by the benefits and how long the policy should persist to reap

benefits without harming consumers. The balance needs to be struck.

Improving awareness among policymakers about benefits of CPL

through evidence from the field.

Bringing civil society, academia, industry experts and associations, SMEs,

etc under one platform and seek consensus regarding course of action

CPL should strategically fuse into other policies, laws and regulations that

have impact on competition and industrial growth

Coordination, if not harmonisation, between CPLs of different RECs

International benchmarking is also an important pre-requisite

Conclusion

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Competition law enforcement has intensified across Africa, in several countries, as well as at regional level

Enforcement tools and fines are on the increase

Clarity of roles between national and regional authorities, or between various regional authorities needed

Competition clearances should not add to the transaction cost

Businesses need to reorient their training and compliance programmes

Need for tailored capacity building programmes for all stakeholders

Building a competition culture through a Friends of Competition campaign

Useful Resources

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Contours of a National Competition Policy: Development Perspective

Harmonising Regulatory Conflicts

Competition and Sector Regulation Interface

Dimensions of Competition Policy and Law in emerging economies

CUTS CCIER PUBLICATION DIGEST (2015)

Thank you

Merci Beaucoup

Muchas Gracias

psm@cuts.org

www.cuts-international.org

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