Competition Act under the spotlight at Competition Committee breakfast

February 1st, 2012

By Nomfundo Manyathi

The Competition Committee of the Law Society of the Northern Provinces hosted its annual breakfast at the Sandton Convention Centre late last year. Guest speakers at the event were the Minister of Economic Development, Ebrahim Patel, and Judge President of the Competition Appeal Court, Judge Dennis Davis.

Minister Patel spoke about the link between public interest issues and competition considerations, while Judge Davis spoke about challenges relating to the Competition Act 89 of 1998 and transformation of the Bench in his court.

Minister Patel said that competition policy was on the ‘cutting edge of economic policy’. He said that it had been central to government policy and that there was a strategy of becoming more competitive, which leads to a more open and dynamic economy.

Minister Patel said that South Africa inherited an economy characterised by extraordinarily concentrated ownership. ‘By 1994 the holdings of the four largest businesses accounted to just over three quarters of the entire capitalisation of the Johannesburg Stock Exchange,’ he said.

He added: ‘At the same time, the economy was inefficient and underperforming. That concentration of ownership was the flip side of the effective exclusion of millions of South Africans from economic opportunity.’

Minister Patel said that competition policies were identified as a critical tool to help achieve the wider goals of the new growth path and to grow the economy.

Minister Patel said that public interest issues had not, however, received ‘the prominence in competition considerations that are warranted by our circumstances or indeed our law’.

He said that public interest issues must be elevated in South Africa’s competition regime in order to grow the economy, and that recent decisions by the country’s competition authorities had taken public interest into account, including the need to transfer skills and protect local manufacturing.

Justice Davis said that he believed that a minor amendment to the Competition Act could fix ‘a huge amount of problems’ and that a change in wording could easily create a better understanding of the Act.

Judge Davis said that the ‘real challenge’ was finding a way of ensuring that the important goals of the Competition Act were promoted, pursued and developed to the advantage of all society.

However, he warned that the Act should not be used to change the economy. He said it was necessary to have a debate on which conceptual model should be adopted in relation to competition law, given the circumstances of the economy in South Africa, adding that this would be a major focus in 2012.

He raised his final point with some reluctance. He said that he had recently presided over a case with two of his colleagues. One of his colleagues, for whom this was her second case at the Competition Appeal Court, pointed out to Judge Davis that there were ten white men in the court and one woman.

She asked Justice Davis why the Competition Appeal Court Bench was so untransformed. ‘I explained to her that for the Competition Commission records, that was not always the case. But it was a point that I had spoken about before. As the Judge President of the Competition Appeal Court, it is incumbent upon me to ensure that we do transform this Bench.’

Justice Davis said that the Bench needed to be transformed in a demographic way. He added that this could not be done over the next ten to 20 years if the courts reproduced the hierarchies they still have. ‘I am cognisant of the fact that when you have a complicated case, given where we have come from in our past, that many of our finest at the highest levels happen to be white men and I have no problem with that; quite to the contrary, we need all the help we can get. But we have many young black and women talent at the junior ranks who do not seem to be getting the opportunities that they should be getting,’ he said.

He then appealed to attorneys: ‘You have to help me here; we are all in this together. If we can alter those problems, then to a large degree this process of transformation can actually meet every single one of our needs without any level of controversy and without any degree of hurt to anybody, and it actually promotes the change that our country needs in meeting judiciary demands.’

Nomfundo Manyathi,

This article was first published in De Rebus in 2012 (Jan/Feb) DR 10.