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
www.cuts-international.org
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