presentation to the national council of provinces
DESCRIPTION
Presentation to the National Council of Provinces SELECT COMMITTEE ON ECONOMIC AND FOREIGN AFFAIRS by Shan Ramburuth Competition Commissioner 6 March 2007. Why competition policy?. Fairness and access Prices and Quality Innovation Consumer Choice. Competition Commission’s activities. - PowerPoint PPT PresentationTRANSCRIPT
Presentation to the
National Council of Provinces SELECT COMMITTEE ON ECONOMIC AND FOREIGN AFFAIRS
by
Shan Ramburuth
Competition Commissioner
6 March 2007
Why competition policy?
• Fairness and access
• Prices and Quality
• Innovation
• Consumer Choice
Competition Commission’s activities
• Prosecution of anti-competitive behaviour
• Merger control
• Advocacy
Application of the Act 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
The Competition AuthoritiesThe Competition authorities
E XTERNAL
PARTIES
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
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
Price fixing: 2005/2006
• General Motors, Daimler Chrysler, Nissan, Volkswagen, Citroen: Minimum resale price maintenanceSettlement, consented to penalty totaling R25 150 000
• Subaru and BMW: Fixing of prices and/or trading conditionsSettlement, consented to penalty totaling R 8 500 000
• Lufthansa Fixing of trading conditionsSettlement, consented to penalty of R8 500 000
South African Airways (SAA) cases: South African Airways (SAA) cases: 2005/20062005/2006
• 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
Current cases
• Harmony Gold/Mittal SteelExcessive pricingTribunal’s decision pending
• SAVA/TelkomAccess to essential facilityLitigation in the High Court over jurisdiction
• Ansac/BotashFixing of trading conditionsMany interlocutory applications, appeals Tribunal must still hear the merits of the case
Current cases
• Profert/SasolRefusal to supplyReferred to the Tribunal
• CC/Dairy Processors (Clover, Parmalat, Ladismith Cheese, Woodlands Dairy, Lancewood, Nestle and Milkwood Dairy)Price fixing of raw and retail milkReferred to the Tribunal
• CTH Trading/SenwesAbuse of dominance – exclusionary conduct and price discriminationReferred to the Tribunal
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
• 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
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
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
Merger notifications
0
5
7
9
14
213
194
262
285
376
2
1
1
4
4
0 50 100 150 200 250 300 350 400 450
2001/2002
2002/2003
2003/2004
2004/2005
2005/2006
Conditionally approved Unconditionally approved Prohibited
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 businessLarge merger, abandoned
• Medicross/Prime Cure Large merger, prohibited by Tribunal, allowed by CAC
Conditional approvals: 2005/2006
• 14 out of 394
• IntelSat/PanAmSatIntermediate merger, behavioural conditions
• AP Moller-Maersk/Royal P&O Nedlloyd NVLarge merger, structural conditions
• Tiger Bands/Ashton Canning Large merger, employment-related conditions
Current merger cases: 2007Current merger cases: 2007
• Telkom/BCX
• Prime Media/Khaya FM
• Pick ‘n Pay/Fruit and Veg City
• Mila Nutri/Yara SA
International contributions
• International Competition NetworkHosted 2006 conference
• Organization for Economic DevelopmentObserver status since 2006
• United Nations Committee for Trade and Development Competition Committee
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
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
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