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The Incorporation of the Public Interest in the Assessment of Prohibited Conduct: A Juggling Act?

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Competition Law Enforcement in the BRICS and in Developing Countries

Part of the book series: International Law and Economics ((ILEC))

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Abstract

The South African Competition Act no 89 of 1998, like many of its counterparts in the BRICS countries and other developing economies, incorporates traditional competition law principles with public interest considerations. It is common cause that the South African competition authorities are required to take into account public interest factors during the assessment of proposed mergers and acquisitions as well as exemption applications. However, it is not clear to what extent (if at all) the competition authorities are obliged to take into account public interest factors during the assessment of prohibited conduct. This chapter seeks to determine whether the South African competition authorities ought to consider public interest factors in the evaluation of prohibited conduct. The chapter briefly evaluates the meaning of the public interest and its interplay with competition law/policy and reviews the political and economic context which resulted in the incorporation of the public interest in the South African Act. The chapter also briefly looks at the incorporation of the public interest in the competition legislation of a number of other jurisdictions like the UK, USA and our African counterparts. The chapter also briefly discusses examples of South African abuse of dominance cases where the public interest was (directly and indirectly) taken into account. The chapter concludes by setting out lessons learnt.

If I am not for myself, then who is for me?

And if I am not for others, then who am I?

And if not now, when?

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Notes

  1. 1.

    Hillel, Me, Myself and I: Ethics of the Fathers 1:14.

  2. 2.

    Leslie, C.R., (2012), Antitrust Law as Public Interest Law, UC Irvine Law Review, vol 2, pp 885–909.

  3. 3.

    Bork, R., (1966), Legislative Intent and the Policy of the Sherman Act, Journal of Law and Economics, (October), pp 15–56.

  4. 4.

    See DiLorenzo, T.J., (1985), The Origins of Antitrust: An Interest-Group Perspective, International Review of Law and Economics, vol 5(6), pp 73–90 and Boudreaux, D.J., and DiLorenzo, T.J., (1993), The Protectionist Roots of Antitrust, The Review of Austrian Economics, vol 6(2), pp 81–96.

  5. 5.

    United States vs. TOPCO Associates, Inc., 405 U.S. 596 (92 S.Ct. 1126, 31 L.Ed.2d 515).

  6. 6.

    Posner, R.A., (2001), Antitrust Law, University of Chicago Press, Chicago, United States of America, Part Four, Chapter 9.

  7. 7.

    United Nations Conference on Trade and Development (“UNCTAD”), The effects of anti-competitive business practices on developing countries and their development prospects, Hassan Qaqaya and George Lipimile, co-eds, United Nations, New York and Geneva, 2008.

  8. 8.

    UNCTAD, The importance of coherence between competition policies and government policies, note by the UNCTAD secretariat presented at the Eleventh session of the Intergovernmental Group of Experts on Competition Law and Policy, Geneva, on 19–21 July 2011.

  9. 9.

    Ibid.

  10. 10.

    To describe this system, Faith et al. (1982) state that “In effect, a geographically based system confronts the legislator with a high payoff from representing local interests in the national legislature by trading votes with other legislators to finance numerous local benefits at the expense of taxpayer-consumers in general and with a correspondingly low payoff from voting in terms of cost-benefit analysis, economic efficiency, or the “national interest.” ”

  11. 11.

    Posner, R., (1969), The Federal Trade Commission, University of Chicago Law Review, Vol 37 (47), pp 47–89.

  12. 12.

    Faith, R.L., Leavens, D.L., and Tollison, R.D., (1982), Antitrust Pork Barrel, Journal of Law and Economics, vol 25(2), pp 329–342.

  13. 13.

    Katzmann, R.A., (1980), Regulatory Bureaucracy: The Federal Trade Commission and Antitrust Policy, The MIT Press, Cambridge Massachusetts, pp 181–187.

  14. 14.

    Reksulak, M., (2010), Antitrust Public Choice(s), Public Choice, vol 142(3/4), Essays in Honor of Robert D. Tollison (March, 2010), pp 423–428.

  15. 15.

    Voigt, S., (2006), Robust political economy: The case of antitrust, Review of Austrian Economics, vol 19(2-3), pp 203–215.

  16. 16.

    See “Public interest clauses may be a necessary evil, says OECD head”, available at http://globalcompetitionreview.com/news/article/38187/public-interest-clauses-may-necessary-evil-says-oecd-head/, accessed on 23 November 2015.

  17. 17.

    Staples, J., and Masamba, M., (2012), Fourteen years later: An assessment of the realisation of the objectives of the Competition Act 89 of 1998, paper presented at the 6th Annual Competition Commission, Competition Tribunal and Mandela Institute Conference on Competition Law, Economics and Policy in South Africa, Johannesburg, South Africa, pp 4.

  18. 18.

    Proposed Guidelines for Competition Policy—A framework for Competition, Competitiveness and Development, Department of Trade and Industry, Pretoria (1997), paras 1.2.3, 1.3.3.1, 1.4.2 and 1.4.3, pp 4–5. See also paras 2.2.7 and 2.4.4, pp 7–8.

  19. 19.

    Ibid, para 1.4.4, pp 5.

  20. 20.

    Organisation for Economic Co-Operation and Development (“OECD”), The Objectives of Competition Law and Policy, Global Forum on Competition, (2003), pp 15. See also Proposed Guidelines for Competition Policy—A framework for Competition, Competitiveness and Development, Department of Trade and Industry, Pretoria (1997), para 1.1.1, pp 3.

  21. 21.

    Organisation for Economic Co-Operation and Development (“OECD”), The Objectives of Competition Law and Policy, Global Forum on Competition, (2003), pp 17.

  22. 22.

    Lewis, D, (2012), Thieves at the dinner table: Enforcing the Competition Act: A Personal Account, Jacarana Media, Johannesburg, South Africa, pp 37.

  23. 23.

    Ibid, pp 39.

  24. 24.

    Ibid, pp 37.

  25. 25.

    Proposed Guidelines for Competition Policy—A framework for Competition, Competitiveness and Development, Department of Trade and Industry, Pretoria (1997), paras 1.3.2 and 1.3.3, pp 4. See also OECD, The Objectives of Competition Law and Policy, Global Forum on Competition (2013), pp 17.

  26. 26.

    Ibid, pp 15.

  27. 27.

    Proposed Guidelines for Competition Policy—A framework for Competition, Competitiveness and Development, Department of Trade and Industry, Pretoria (1997), para 2.4.12, pp 8.

  28. 28.

    Lewis, D, (2012), Thieves at the dinner table: Enforcing the Competition Act: A Personal Account, Jacarana Media, Johannesburg, South Africa, pp 34.

  29. 29.

    Hartzenberg T, Competition Policy review, TRALAC at pg 9.

  30. 30.

    Staples J & Masamba M (2012) Fourteen years later: An assessment of the realisation of the objectives of the Competition Act 89 of 1998, pg 5.

  31. 31.

    OECD, The Objectives of Competition Law and Policy, Global Forum on Competition (2003), pp 19.

  32. 32.

    Competition Act no 89 of 1998, pp 2.

  33. 33.

    Ibid.

  34. 34.

    Hartzenberg, T, Competition Policy review, TRALAC Trade Law Centre, pp 12. See also OECD, The Objectives of Competition Law and Policy, Global Forum on Competition (2003), para 3.8.2, pp 16.

  35. 35.

    Hartzenberg, T, Competition Policy review, TRALAC Trade Law Centre, pp 12.

  36. 36.

    As previously indicated, the concept of public interest is partially carried through to the prohibited practices provisions of the Act as well in so far as it relates to the exemption of otherwise anticompetitive conduct.

  37. 37.

    Competition Act no 89 of 1998, section 12A (3) (a–d).

  38. 38.

    Ibid.

  39. 39.

    Accessed at www.compcom.co.za/priority-sectors.

  40. 40.

    Competition Act no 89 of 1998, Chapter 4, Part A, sections 20, 22 and 23; and Part B, section 26.

  41. 41.

    Mittal Steel South Africa Limited and Others vs Harmony Gold Mining Company Limited and Another, case no: 70/CAC/APR07.

  42. 42.

    Competition Commission vs Sasol Chemical Industries Limited, case no: 48/CR/Aug10.

  43. 43.

    Smith, P., and Swan, A., (2014), Africa: Public Interest Factors in Competition Decisions, Global Competition Review, The African and Middle Eastern Antitrust Review 2014, accessed at http://globalcompetitionreview.com/reviews/59/sections/204/chapters/2304/africa-public-interest-factors-competition-decisions/.

  44. 44.

    Scott, A., (2009), The Evolution of Competition Law and Policy in the United Kingdom, London School of Economics Law, Society and Economy Working Papers 9/2009.

  45. 45.

    Donald Hay (1997) “Country studies: the United Kingdom”, in Graham, E.M., Richardson, JD., et al., (1997), Global Competition Policy, Institute for International Economics, Washington DC, pp 199–234.

  46. 46.

    Competition Act 15/2007 of 3rd July, (Official State Gazette No. 159, of 4th July 2007).

  47. 47.

    UNCTAD, (authored by Khemani, S) (2002), Application of Competition Law: Exemptions and Exceptions, United Nations, New York and Geneva.

  48. 48.

    Posner, R.A., (2001), Antitrust Law, University of Chicago Press, Chicago, United States of America.

  49. 49.

    Dolmans, M., (2005), The concept of abuse under article 82 EC profit sacrifice or proportionality test? US law and EU law compared, Paper presented at the second annual conference of the College of Europe, Bruges, Global Competition Law Centre, Brussels, on 16–17 June 2005.

  50. 50.

    Oxenham, J, (2012), ‘Balancing public interest merger considerations before sub-Saharan African competition jurisdictions with the quest for multi-jurisdictional merger control certainty’, US–China Law Review, vol. 9, pp 211.

  51. 51.

    Botswana Competition Act (2009), section 46.

  52. 52.

    Competition and Consumer Protection Act (No. 24 of 2010), section 62 (B).

  53. 53.

    Competition Act, 2010, section 37.

  54. 54.

    Malawi Competition and Fair Trading Act, section 44. The authors note that outright prohibitions are captured under sections 33(3), 41(1) and 43(1).

  55. 55.

    Competition Act, 2007, section 35(3), and specifically section 35(4)(d) and section 52(3)(b).

  56. 56.

    Organisation for Economic Co-operation and Development Country Studies, (2008), China—The Challenges of Transition for Competition Law and Policy, available at http://www.oecd-ilibrary.org/governance/oecd-reviews-of-regulatory-reform-china-2009/the-challenges-of-transition-for-competition-law-and-policy_9789264059429-5-en, accessed on 22 November 2015.

  57. 57.

    Wang, P., Zhang, Y., and Evrard, S., (2012), Chinese Enforcement Against Abuses of Dominance Ramps Up, Competition Policy International Antitrust Column, vol 1(3).

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Authors and Affiliations

  1. MultiChoice Africa, Pretoria, Gauteng, South Africa

    Ziyanda Buthelezi

  2. Competition Commission South Africa, Pretoria, Gauteng, South Africa

    Yongama Njisane

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  1. Ziyanda Buthelezi
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  2. Yongama Njisane
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Correspondence to Ziyanda Buthelezi .

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Editors and Affiliations

  1. ESSEC Business School, Cergy-Pontoise, France

    Frederic Jenny

  2. Athens Univ. of Economics and Business, Athens, Greece

    Yannis Katsoulacos

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Buthelezi, Z., Njisane, Y. (2016). The Incorporation of the Public Interest in the Assessment of Prohibited Conduct: A Juggling Act?. In: Jenny, F., Katsoulacos, Y. (eds) Competition Law Enforcement in the BRICS and in Developing Countries. International Law and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-30948-4_12

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