Page 63 - Nexia SAB&T Business in South Africa Guide 2024

COMPETITION LAW

A knowledge of competition law is essential for any successful business
operating in SA, especially when creating a business strategy, launching a new
product or challenging competitors.
The Competition Act, 89 of 1998, as amended, (CA) aims to maintain and
promote competition in the South African market in order to, inter alia, provide
South Africans with an equal opportunity to participate fairly in the national
economy, to achieve a more effective and efficient economy and provide for
markets in which consumers have access to, and can freely select, the quality
and variety of goods and services they desire, to restrain particular trade
practices which undermine competitive economy, to promote a greater spread
of ownership within the economy, in particular by increasing the ownership of
historically disadvantaged individuals, and to ensure that small businesses have
an equitable opportunity to participate in the economy.
The CA applies to all economic activity within, or having an effect within SA and
regulates relationships between competitors and relationships in the supply chain.

Control of Mergers and Acquisitions
Mergers and acquisitions are controlled, in that the CA requires a notification
and prior approval procedure for certain mergers and acquisitions, carries
significant penalties for contraventions – and reaches beyond SA, applying to
economic activity both in and having an effect in the country. Public interest
plays a significant role in merger assessments. The South African Competition
Commission (SACC) is mainly focused on the potential dilution of B-BBEE/
historically disadvantaged persons ownership structures due to merger
transactions. In addition, a recent Constitutional Court decision emphasised that
competition law must be interpreted and applied with regard to the Constitution,
thus the scope of public interest considerations may be broadened to include
constitutional issues.

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