WETSONTWERP OP MEDEDINGING

Transcription

1 REPUBLIC OF SOUTH AFRICA COMPETITION ACT (A ubmitted by the Portfolio Committee on Trade and Indutry (National Aembly)) (MINISTER OF TRADE AND INDUSTRY) Act 89 of 1998, conolidated with amendment enacted by Act 3 of 1999 REPUBLIEK VAN SUID-AFRIKA WETSONTWERP OP MEDEDINGING (Soo voorgelê deur die Portefeuljekomittee oor Handel en Nywerheid (Naionale Vergadering)) (MINISTER VAN HANDEL EN NYWERHEID) [W 98 98]

2 Competition Act, 1998 To provide for the etablihment of a Competition Commiion reponible for the invetigation, control and evaluation of retrictive practice, abue of dominant poition, and merger; and for the etablihment of a Competition Tribunal reponible to adjudicate uch matter; and for the etablihment of a Competition Appeal Court; and for related matter. PREAMBLE The people of South Africa recognie : That apartheid and other dicriminatory law and practice of the pat reulted in exceive concentration of ownerhip and control within the national economy, weak enforcement of anti-competitive trade practice, and unjut retriction on full and free participation in the economy by all South African. That the economy mut be open to greater ownerhip by a greater number of South African. That credible competition law, and effective tructure to adminiter that law, are neceary for an efficient functioning economy. That an efficient, competitive economic environment, balancing the interet of worker, owner and conumer and focued on development, will benefit all South African. IN ORDER TO - provide all South African equal opportunity to participate fairly in the national economy; achieve a more effective and efficient economy in South Africa; provide for market in which conumer have acce to, and can freely elect, the quality and variety of good and ervice they deire; create greater capability and an environment for South African to compete effectively in international market;

3 Competition Act, 1998 (Conolidated verion) 3 CHAPTER 1 : DEFINITIONS, INTERPRETATION, PURPOSE AND APPLICATION OF ACT retrain particular trade practice which undermine a competitive economy; regulate the tranfer of economic ownerhip in keeping with the public interet; etablih independent intitution to monitor economic competition; and give effect to the international law obligation of the Republic. BE IT THEREFORE ENACTED BY THE PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA, AS FOLLOWS :

4 4 Competition Act, 1998 (Conolidated verion) CHAPTER 1 : DEFINITIONS, INTERPRETATION, PURPOSE AND APPLICATION OF ACT TABLE OF CONTENTS CHAPTER Definition and interpretation Purpoe of Act Application of Act CHAPTER Retrictive horizontal practice prohibited Retrictive vertical practice prohibited Retricted application of Part Dominant firm Abue of dominance prohibited Price dicrimination by dominant firm prohibited Exemption CHAPTER Retricted application of Chapter Merger defined Notification of merger required Competition Commiion merger proceeding Competition Tribunal merger proceeding Conideration of Merger Competition Appeal Court Merger Proceeding Miniter may participate in proceeding CHAPTER Etablihment and contitution of Competition Commiion Independence of Competition Commiion... 28

5 Competition Act, 1998 (Conolidated verion) CHAPTER 1 : DEFINITIONS, INTERPRETATION, PURPOSE AND APPLICATION OF ACT 21. Function of Competition Commiion Appointment of Commiioner Appointment of Deputy Commiioner Appointment of inpector Staff of Competition Commiion Etablihment and contitution of Competition Tribunal Function of Competition Tribunal Qualification of member of Competition Tribunal Term of office of member of Competition Tribunal Deputy Chairperon of Competition Tribunal Competition Tribunal proceeding Conflict and dicloure of interet by member of Competition Tribunal Acting by member of Competition Tribunal after expiry of term of office Remuneration and benefit of member of Competition Tribunal Staff of Competition Tribunal Etablihment and contitution of Competition Appeal Court Function of Competition Appeal Court Buine of Competition Appeal Court Term of office of member of Competition Appeal Court Finance Annual Report Rule applicable to Competition Tribunal Liability CHAPTER Initiating a complaint... 44

6 6 Competition Act, 1998 (Conolidated verion) CHAPTER 1 : DEFINITIONS, INTERPRETATION, PURPOSE AND APPLICATION OF ACT 4. Invetigation by Competition Commiion Authority to enter and earch under warrant Authority to enter and earch without warrant Power to enter and earch Conduct of entry and earch Outcome of complaint Referral to Competition Tribunal Hearing before Competition Tribunal Right to participate in hearing Power of member preiding at hearing Rule of procedure Witnee Cot Appeal CHAPTER Interim relief Order of Competition Tribunal Adminitrative fine Divetiture Conent order Statu and enforcement of order Civil action and juridiction Variation of order Limitation of bringing action Standard of proof... 60

7 Competition Act, 1998 (Conolidated verion) 7 CHAPTER 1 : DEFINITIONS, INTERPRETATION, PURPOSE AND APPLICATION OF ACT CHAPTER Breach of confidence Hindering adminitration of Act Failure to attend when ummoned Failure to anwer fully or truthfully Failure to comply with Act Penaltie Magitrate Court juridiction to impoe penaltie Serving document Proof of fact CHAPTER Regulation Guideline Official eal Act bind State Information exchange with foreign agencie Tranitional arrangement and repeal of law Short Title and commencement of Act SCHEDULE SCHEDULE SCHEDULE

8 8 Competition Act, 1998 (Conolidated verion) CHAPTER 1 : DEFINITIONS, INTERPRETATION, PURPOSE AND APPLICATION OF ACT CHAPTER 1 DEFINITIONS, INTERPRETATION, PURPOSE AND APPLICATION OF ACT 1. Definition and interpretation (1) In thi Act - agreement include a contract, arrangement or undertanding, whether or not legally enforceable; civil court mean a High Court or Magitrate Court, a referred to in ection 166 and (d) of the Contitution; (iii) confidential information mean trade, buine or indutrial information that belong to a firm, ha a particular economic value, and i not generally available to or known by other; 1 (iv) concerted practice mean co-operative, or co-ordinated conduct between firm, achieved through direct or indirect contact, that replace their independent action, but which doe not amount to an agreement; (v) Contitution mean the Contitution of the Republic of South Africa, 1996 (Act No. 8 of 1996); (vi) eential facility mean an infratructure or reource that cannot reaonably be duplicated, and without acce to which competitor cannot reaonably provide good or ervice to their cutomer; (vii) exceive price mean a price for a good or ervice which (aa) (bb) bear no reaonable relation to the economic value of that good or ervice; and i higher than the value referred to in ubparagraph (aa);

9 Competition Act, 1998 (Conolidated verion) 9 CHAPTER 1 : DEFINITIONS, INTERPRETATION, PURPOSE AND APPLICATION OF ACT (viii) excluionary act mean an act that impede or prevent a firm entering into, or expanding within, a market; (ix) firm include a peron, partnerhip or a trut; (x) good or ervice, when ued with repect to particular good or ervice, include any other good or ervice that are reaonably capable of being ubtituted for them, taking into account ordinary commercial practice and geographical, technical and temporal contraint; (xi) horizontal relationhip mean a relationhip between competitor; (xii) interet mean a member interet a defined in the Cloe Corporation Act, 1984 (Act No. 69 of 1984); (xiii) market power mean the power of a firm to control price, or to exclude competition or to behave to an appreciable extent independently of it competitor, cutomer or upplier; 1 (xiv) Miniter mean the Miniter of Trade and Indutry; (xv) organ of tate ha the meaning et out in ection 239 of the Contitution; (xvi) premie include land, any building, tructure, vehicle, hip, boat, veel, aircraft or container; (xvii) precribed mean precribed from time to time by regulation in term of ection 78; (xviii) private dwelling mean any part of a tructure that i occupied a a reidence, or any part of a tructure or outdoor living area that i acceory to, and ued wholly for the purpoe of, a reidence; 2 (xix) prohibited practice mean a practice prohibited in term of Chapter 2;

10 Competition Act, 1998 (Conolidated verion) CHAPTER 1 : DEFINITIONS, INTERPRETATION, PURPOSE AND APPLICATION OF ACT (xx) public regulation mean any national, provincial or local government legilation or ubordinate legilation, or any licene, tariff, directive or imilar authoriation iued by a regulatory authority or puruant to any tatutory authority; (xxi) regulation mean a regulation made under thi Act; (xxii) regulatory authority mean an entity etablihed in term of national or provincial legilation reponible for regulating an indutry, or ector of an indutry; (xxiii) repondent mean a firm againt whom a complaint of a prohibited practice ha been initiated in term of thi Act; (xxiv) retrictive horizontal practice mean any practice lited in ection 4; (xxv) retrictive vertical practice mean any practice lited in ection ; (xxvi) mall buine ha the meaning et out in the National Small Buine Act, 1996 (Act No. 2 of 1996); 1 (xxvii) thi Act include the regulation and Schedule; (xxviii) vertical relationhip mean the relationhip between a firm and it upplier, it cutomer, or both. (2) Thi Act mut be interpreted in a manner that i conitent with the Contitution and give effect to the purpoe et out in ection 2; and in compliance with the international law obligation of the Republic. (3) Any peron interpreting or applying thi Act may conider appropriate foreign and international law.

11 Competition Act, 1998 (Conolidated verion) 11 CHAPTER 1 : DEFINITIONS, INTERPRETATION, PURPOSE AND APPLICATION OF ACT 2. Purpoe of Act The purpoe of thi Act i to promote and maintain competition in the Republic in order to promote the efficiency, adaptability and development of the economy; to provide conumer with competitive price and product choice; to promote employment and advance the ocial and economic welfare of South African; (d) to expand opportunitie for South African participation in world market and recognie the role of foreign competition in the Republic; (e) to enure that mall and medium-ized enterprie have an equitable opportunity to participate in the economy; and (f) to promote a greater pread of ownerhip, in particular to increae the ownerhip take of hitorically diadvantaged peron. 3. Application of Act 1 (1) Thi Act applie to all economic activity within, or having an effect within, the Republic, except collective bargaining within the meaning of ection 23 of the Contitution, and the Labour Relation Act, 199 (Act No. 66 of 199); a collective agreement, a defined in ection 213 of the Labour Relation Act, 199; the rule of a profeional aociation to the extent that they are exempted in term of Schedule 1; (d) act ubject to or authoried by public regulation; or (e) concerted conduct deigned to achieve a non-commercial ocio-economic objective or imilar purpoe.

12 12 Competition Act, 1998 (Conolidated verion) CHAPTER 2 : PROHIBITED PRACTICES (2) For all purpoe of thi Act, a peron i a hitorically diadvantaged peron if that peron - i one of a category of individual who, before the Contitution of the Republic of South Africa, 1993 (Act No. 0 of 1993), came into operation, were diadvantaged by unfair dicrimination on the bai of race; i an aociation, a majority of whoe member are individual referred to in paragraph ; i a juritic peron other than an aociation, and individual referred to in paragraph own and control a majority of it iued hare capital or member interet and are able to control a majority of it vote; or (d) i a juritic peron or aociation, and peron referred to in paragraph, or own and control a majority of it iued hare capital or member interet and are able to control a majority of it vote. CHAPTER 2 1 PROHIBITED PRACTICES PART A RESTRICTIVE PRACTICES 4. Retrictive horizontal practice prohibited (1) An agreement between, or concerted practice by, firm, or a deciion by an aociation of firm, i prohibited if 2 it i between partie in a horizontal relationhip and it ha the effect of ubtantially preventing or leening competition in a market, unle a party to the agreement, concerted practice, or deciion can prove that any technological, efficiency or other pro-competitive, gain reulting from it outweigh that effect; or

13 Competition Act, 1998 (Conolidated verion) 13 CHAPTER 2 : PROHIBITED PRACTICES it involve any of the following retrictive horizontal practice : (i) directly or indirectly fixing a purchae or elling price or any other trading condition; (ii) dividing market by allocating cutomer, upplier, territorie, or pecific type of good or ervice; or (iii) colluive tendering. (2) An agreement to engage in a retrictive horizontal practice referred to in ubection (1) i preumed to exit between two or more firm if any one of thoe firm own a ubtantial hareholding, interet or imilar right in the other, or they have at leat one director or ubtantial hareholder in common; and any combination of thoe firm engage in that retrictive horizontal practice. 1 (3) A preumption contemplated in ubection (2) may be rebutted if a firm, director or hareholder concerned etablihe that a reaonable bai exit to conclude that the practice referred to in ubection (1) wa a normal commercial repone to condition prevailing in that market. (4) For the purpoe of ubection (2), director mean a director of a company a defined in the Companie Act, 1973 (Act No. 61 of 1973); a member of a cloe corporation a defined in the Cloe Corporation Act, 1984 (Act No. 69 of 1984); a trutee of a trut; or (d) a peron holding an equivalent poition in a firm. 2 () The proviion of ubection (1) do not apply to an agreement between, or concerted practice engaged in by,

14 14 Competition Act, 1998 (Conolidated verion) CHAPTER 2 : PROHIBITED PRACTICES a company, it wholly owned ubidiary a contemplated in ection 1() of the Companie Act, 1973, a wholly owned ubidiary of that ubidiary or any combination of them; or the contituent firm within a ingle economic entity imilar in tructure to thoe referred to in paragraph.. Retrictive vertical practice prohibited (1) An agreement between partie in a vertical relationhip i prohibited if it ha the effect of ubtantially preventing or leening competition in a market, unle a party to the agreement can prove that any technological, efficiency or other procompetitive, gain reulting from that agreement outweigh that effect. (2) The practice of minimum reale price maintenance i prohibited. (3) Depite ubection (2), a upplier or producer may recommend a minimum reale price to the reeller of a good or ervice provided 1 the upplier or producer make it clear to the reeller that the recommendation i not binding; and if the product ha it price tated on it, the word recommended price appear next to the tated price. PART B ABUSE OF A DOMINANT POSITION 6. Retricted application of Part (1) A oon a practicable after thi Act come into operation, and at interval of not le than five year thereafter, the Miniter mut, in conultation with the Competition Commiion, and by notice in the Gazette

15 Competition Act, 1998 (Conolidated verion) 1 CHAPTER 2 : PROHIBITED PRACTICES determine a threhold of annual turnover, or aet, in the Republic, either in general or in relation to pecific indutrie, below which thi Part doe not apply to a firm; and provide a method for the calculation of annual turnover or aet. (2) A threhold determined by the Miniter in term of ubection (1) take effect ix month after the date of publication of that notice in the Gazette. 7. Dominant firm A firm i dominant in a market if it ha at leat 4% of that market; it ha at leat 3%, but le than 4%, of that market, unle it can how that it doe not have market power; or it ha le than 3% of that market, but ha market power. 8. Abue of dominance prohibited It i prohibited for a dominant firm to - 1 charge an exceive price to the detriment of conumer; refue to give a competitor acce to an eential facility when it i economically feaible to do o; engage in an excluionary act, other than an act lited in paragraph (d), if the anti-competitive effect of that act outweigh it technological, efficiency or other pro-competitive, gain; or (d) engage in any of the following excluionary act, unle the firm concerned can how technological, efficiency or other pro-competitive, gain which outweigh the anti-competitive effect of it act

16 16 Competition Act, 1998 (Conolidated verion) CHAPTER 2 : PROHIBITED PRACTICES (i) requiring or inducing a upplier or cutomer to not deal with a competitor; (ii) refuing to upply carce good to a competitor when upplying thoe good i economically feaible; (iii) elling good or ervice on condition that the buyer purchae eparate good or ervice unrelated to the object of a contract, or forcing a buyer to accept a condition unrelated to the object of a contract; (iv) elling good or ervice below their marginal or average variable cot; or (v) buying-up a carce upply of intermediate good or reource required by a competitor. 9. Price dicrimination by dominant firm prohibited (1) An action by a dominant firm, a the eller of good or ervice, i prohibited price dicrimination, if 1 it i likely to have the effect of ubtantially preventing or leening competition; it relate to the ale, in equivalent tranaction, of good or ervice of like grade and quality to different purchaer; and it involve dicriminating between thoe purchaer in term of (i) the price charged for the good or ervice; (ii) any dicount, allowance, rebate or credit given or allowed in relation to the upply of good or ervice; (iii) the proviion of ervice in repect of the good or ervice; or (iv) payment for ervice provided in repect of the good or ervice.

17 Competition Act, 1998 (Conolidated verion) 17 CHAPTER 2 : PROHIBITED PRACTICES (2) Depite ubection (1), conduct involving differential treatment of purchaer in term of any matter lited in paragraph of that ubection i not prohibited price dicrimination if the dominant firm etablihe that the differential treatment make only reaonable allowance for difference in cot or likely cot of manufacture, ditribution, ale, promotion or delivery reulting from the differing place to which, method by which, or quantitie in which, good or ervice are upplied to different purchaer; i contituted by doing act in good faith to meet a price or benefit offered by a competitor; or i in repone to changing condition affecting the market for the good or ervice concerned, including (i) any action in repone to the actual or imminent deterioration of perihable good; (ii) any action in repone to the obolecence of good; 1 (iii) a ale puruant to a liquidation or equetration procedure; or (iv) a ale in good faith in dicontinuance of buine in the good or ervice concerned. PART C EXEMPTIONS FROM APPLICATION OF CHAPTER. Exemption (1) A firm may apply to the Competition Commiion to exempt an agreement, or practice, or category of either agreement, or practice, from the application of thi Chapter. 2 (2) Upon receiving an application in term of ubection (1), the Competition Commiion may

18 18 Competition Act, 1998 (Conolidated verion) CHAPTER 2 : PROHIBITED PRACTICES advie the applicant in writing that the agreement, or practice, or category of either agreement, or practice, doe not contitute a prohibited practice in term of thi Chapter; grant a conditional or unconditional exemption for a pecified term, if the agreement, or practice, or category of either agreement, or practice concerned meet the requirement of ubection (3); or refue to grant an exemption. (3) The Competition Commiion may grant an exemption in term of ubection (2), if any retriction impoed on the firm concerned by the agreement, or practice, or category of either agreement, or practice, concerned i required to attain an objective mentioned in paragraph ; and the agreement, or practice, or category of either agreement, or practice, concerned, contribute to any of the following objective: 1 (i) maintenance or promotion of export; (ii) promotion of the ability of mall buinee, or firm controlled or owned by hitorically diadvantaged peron, to become competitive; (iii) change in productive capacity neceary to top decline in an indutry; or (iv) the economic tability of any indutry deignated by the Miniter, after conulting the miniter reponible for that indutry. 2 (4) In addition to the proviion of ubection (2) and (3), the Competition Commiion may exempt an agreement, or practice, or category of either agreement, or practice, that relate to the exercie of a right acquired or protected in term of the Performer Protection Act, 1967 (Act No. 11 of 1967), the Plant Breeder Right Act, 1976 (Act No. 1 of 1976), the Patent Act, 1978 (Act No. 7 of 1978), the Copyright Act,

19 Competition Act, 1998 (Conolidated verion) 19 CHAPTER 2 : PROHIBITED PRACTICES 1978 (Act No. 98 of 1978), the Trade Mark Act, 1993 (Act No. 194 of 1993) and the Deign Act, 1993 (Act No. 19 of 1993). () The Competition Commiion may revoke it written advice given in term of ubection 2, or an exemption granted in term of ubection (2), if the advice wa given, or the exemption wa granted, on the bai of fale or incorrect information; a condition for the exemption i not fulfilled; or the reaon for granting the exemption no longer exit. (6) Before granting an exemption in term of ubection (2) or (4), or revoking an exemption in term of ubection (), the Competition Commiion mut give notice in the Gazette of the application for an exemption, or of it intention to revoke that exemption; and allow intereted partie 30 day from the date of that notice to make written repreentation a to why the exemption hould not be granted or revoked. 1 (7) The Competition Commiion, by notice in the Gazette, mut give notice of any exemption granted or revoked in term of thi ection. (8) The firm concerned, or any other peron with a ubtantial material interet affected by a deciion of the Competition Commiion in term of ubection (2) or, or ubection (4) or (), may appeal that deciion to the Competition Tribunal in the precribed manner.

20 Competition Act, 1998 (Conolidated verion) CHAPTER 3 : MERGER CONTROL CHAPTER 3 MERGER CONTROL 11. Retricted application of Chapter (1) A oon a practicable after thi Act come into operation, and at interval of not le than five year thereafter, the Miniter mut, in conultation with the Competition Commiion, and by notice in the Gazette determine a threhold of combined annual turnover, or aet, in the Republic, either in general or in relation to pecific indutrie, at or below which thi Chapter doe not apply to a merger; determine a econd threhold of combined annual turnover, or aet, in the Republic, either in general or in relation to pecific indutrie, higher than the threhold referred to in paragraph, for the purpoe of determining categorie of merger in term of ubection (3); and provide a method for the calculation of annual turnover and aet. 1 (2) A threhold determined by the Miniter in term of ubection (1) take effect ix month after the date of publication of that notice in the Gazette. (3) For the purpoe of thi Chapter, at any time an intermediate merger mean a merger or propoed merger with a value between the then current threhold etablihed in term of ubection (1) and repectively; and a large merger mean a merger or propoed merger with a value at or above the then current threhold etablihed in term of ubection (1).

21 Competition Act, 1998 (Conolidated verion) 21 CHAPTER 3 : MERGER CONTROL 12. Merger defined (1) For the purpoe of thi Chapter, merger mean the direct or indirect acquiition or direct or indirect etablihment of control, by one or more peron over all ignificant interet in the whole or part of the buine of a competitor, upplier, cutomer or other peron, whether that control i achieved a a reult of purchae or leae of the hare, interet, or aet of that competitor, upplier, cutomer or other peron; amalgamation or combination with that competitor, upplier, cutomer or other peron; or any other mean. (2) A peron control a firm if that peron- beneficially own more than one half of the iued hare capital of the firm; 1 i entitled to vote a majority of the vote that may be cat at a general meeting of the firm, or ha the ability to control the voting of a majority of thoe vote, either directly or through a controlled entity of that peron; i able to appoint or to veto the appointment of a majority of the director of the firm; (d) i a holding company, and the firm i a ubidiary of that company a contemplated in ection 1(3) of the Companie Act, 1973 (Act No. 61 of 1973); (e) in the cae of a firm that i a trut, ha the ability to control the majority of the vote of the trutee, to appoint the majority of the trutee, to appoint or change the majority of the beneficiarie of the trut; 2 (f) in the cae of a cloe corporation, own the majority of member interet, or control directly, or ha the right to control the majority of member vote in the cloe corporation; or

22 22 Competition Act, 1998 (Conolidated verion) CHAPTER 3 : MERGER CONTROL (g) ha the ability to materially influence the policy of the firm in a manner comparable to a peron who, in ordinary commercial practice, can exercie an element of control referred to in paragraph -(f). 13. Notification of merger required (1) Any party to an intermediate or large merger mut notify the Competition Commiion of that merger no more than even day after the earlier of the concluion of the merger agreement; the public announcement of a propoed merger bid; or the acquiition by any one of the partie to that merger, of a controlling interet in another. 1 (2) A party that i required in term of ubection (1) to notify the Competition Commiion of a merger mut provide a copy of that notice to a repreentative trade union repreenting the employee of any of the merging firm, and, if there i no repreentative trade union in one of the merging firm, the notice in repect of that firm, mut be directed to any regitered trade union that repreent a ubtantial number of the employee of that firm; or if there are no regitered trade union in that firm, the employee concerned, or repreentative of the employee concerned. (3) The partie to an intermediate or large merger mut not implement that merger until they have received approval from either the Competition Commiion in term of ection 14(1), the Competition Tribunal in term of ection 1(2) or the Competition Appeal Court in term of ection 17.

23 Competition Act, 1998 (Conolidated verion) 23 CHAPTER 3 : MERGER CONTROL 14. Competition Commiion merger proceeding (1) Within 30 day after receiving notice of an intermediate merger, the Competition Commiion mut either extend the period in which it ha to conider the propoed merger by a period not exceeding 60 day, and in that cae, iue an extenion certificate to any party that notified it of the merger; or after conidering the merger in term of ection 16 - (i) approve the merger by iuing a clearance certificate; (ii) approve the merger ubject to any condition; or (iii) prohibit implementation of the merger. 1 (2) If, upon the expiry of the 30 day period provided for in ubection (1), the Competition Commiion ha not iued any of the certificate referred to in that ubection, or upon the expiry of an extenion period contemplated in ubection (1), the Commiion ha not iued a certificate referred to in ubection (1), the Commiion will be deemed to have approved the merger, ubject to ubection (). (3) After receiving notice of a large merger, the Competition Commiion mut refer that notice to the Competition Tribunal and to the Miniter, and within the precribed time, forward to the Competition Tribunal and the Miniter a recommendation whether implementation of the merger hould be either approved; approved ubject to any condition; or prohibited. 2 (4) Upon making a deciion in term of ubection (1) or (2), or a referral and recommendation in term of ubection (3), the Competition Commiion mut -

24 24 Competition Act, 1998 (Conolidated verion) CHAPTER 3 : MERGER CONTROL iue written reaon for the deciion or recommendation; and publih a notice of the deciion, or referral and recommendation, in the Gazette. () The Competition Commiion may revoke a deciion to approve or conditionally approve a merger in term of ubection (1) if the deciion wa baed on incorrect information for which a party to the merger i reponible; the approval wa obtained by deceit; or a firm concerned ha breached an obligation attached to the deciion. (6) Depite the time limit et out in thi ection, if, in term of ubection (), the Competition Commiion revoke a deciion to approve a merger, the Commiion may prohibit that merger even though any of thoe time limit may have elaped. 1. Competition Tribunal merger proceeding 1 (1) If the Competition Commiion approve a merger ubject to any condition in term of ection 14(1)(ii), or prohibit a merger in term of ection 14(1)(iii), a party to the merger may, by written notice in the precribed form, requet the Competition Tribunal to conider the condition or prohibited merger. (2) Upon receiving a referral of a large merger and recommendation from the Competition Commiion in term of ection 14(3), or a requet from a party to an intermediate merger in term of ubection (1), the Competition Tribunal mut conider the merger in term of ection 16, and the recommendation or deciion, a the cae may be, of the Competition Commiion, and mut, within the precribed time - approve the merger; 2 approve the merger ubject to any condition; or

25 Competition Act, 1998 (Conolidated verion) 2 CHAPTER 3 : MERGER CONTROL prohibit implementation of the merger. (3) Section 14(4), () and (6), each read with the change required by the context, apply to the Competition Tribunal in relation to any merger that it i required to conider in term of ubection (2). 16. Conideration of Merger (1) Whenever required to conider a merger, the Competition Commiion or Competition Tribunal mut initially determine whether or not the merger i likely to ubtantially prevent or leen competition, by aeing the factor et out in ubection (2); and if it appear that the merger i likely to ubtantially prevent or leen competition, the commiion or Tribunal mut then determine 1 (i) whether the merger i likely to reult in any technological, efficiency or other pro-competitive, gain which will be greater than, and offet, the effect of any prevention or leening of competition, that may reult or i likely to reult from the merger, and would not likely be obtained if the merger i prevented; and (ii) whether the merger can or cannot be jutified on ubtantial public interet ground by aeing the factor et out in ubection (3); and otherwie, mut determine whether the merger can or cannot be jutified on ubtantial public interet ground by aeing the factor et out in ubection (3). 2 (2) When determining whether or not a merger i likely to ubtantially prevent or leen competition, the Competition Commiion or the Competition Tribunal mut ae the trength of competition in the relevant market, and the probability that the firm in the market after the merger will behave competitively or co-operatively, taking into account any factor that i relevant to competition in that market, including - (i) the actual and potential level of import competition in the market;

26 26 Competition Act, 1998 (Conolidated verion) CHAPTER 3 : MERGER CONTROL (ii) the eae of entry into the market, including tariff and regulatory barrier; (iii) the level, trend of concentration, and hitory of colluion, in the market; (iv) the degree of countervailing power in the market; (v) the likelihood that the acquiition would reult in the merged firm having market power; (vi) the dynamic characteritic of the market, including growth, innovation, and product differentiation; (vii) the nature and extent of vertical integration in the market; (viii) whether the buine or part of the buine of a party to the merger or propoed merger ha failed or i likely to fail; and (ix) whether the merger will reult in the removal of an effective competitor. 1 (3) When determining whether a merger can or cannot be jutified on public interet ground, the Competition Commiion or the Competition Tribunal mut conider the effect that the merger will have on (i) a particular indutrial ector or region; (ii) employment; (iii) the ability of mall buinee, or firm controlled or owned by hitorically diadvantaged peron, to become competitive; and (iv) the ability of national indutrie to compete in international market. 17. Competition Appeal Court Merger Proceeding (1) Within 30 day after notice of a deciion by the Competition Tribunal in term of ection 1(2), a party to the merger, or any other peron who, in term of ection

27 Competition Act, 1998 (Conolidated verion) 27 CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT 13(2), i required to be given notice of the merger, may appeal to the Competition Appeal Court from that deciion, and the Court mut either - et aide the deciion of the Tribunal; amend that deciion by ordering retriction or by including condition; or confirm that deciion. 18. Miniter may participate in proceeding In order to make repreentation on any public interet ground referred to in ection 16(3), the Miniter may participate a a party in any merger proceeding before the Competition Commiion, Competition Tribunal or the Competition Appeal Court, in the manner provided for in rule made in term of ection 21(4), 27(2) or 38(1), repectively. CHAPTER 4 COMPETITION COMMISSION, TRIBUNAL, AND COURT PART A THE COMPETITION COMMISSION Etablihment and contitution of Competition Commiion (1) There i hereby etablihed a body to be known a the Competition Commiion, which - ha juridiction throughout the Republic; i a juritic peron; and mut exercie it function in accordance with thi Act.

28 28 Competition Act, 1998 (Conolidated verion) CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT (2) The Competition Commiion conit of the Commiioner and one or more Deputy Commiioner a may be neceary, appointed by the Miniter in term of thi Act.. Independence of Competition Commiion (1) The Competition Commiion i independent and ubject only to the Contitution and the law; and mut be impartial and mut perform it function without fear, favour, or prejudice. (2) The Commiioner, each Deputy Commiioner and each member of the taff of the Competition Commiion, mut not engage in any activity that may undermine the integrity of the Commiion; participate in any invetigation, hearing or deciion concerning a matter in repect of which that peron ha a direct financial interet or any imilar peronal interet; 1 make private ue of, or profit from, any confidential information obtained a a reult of performing that peron official function in the Commiion; or (d) divulge any information referred to in paragraph 2 to any third party, except a required a part of that peron official function within the Commiion. (3) Each organ of tate mut ait the Commiion to maintain it independence and impartiality, and to effectively carry out it power and dutie. 21. Function of Competition Commiion (1) The Competition Commiion i reponible to implement meaure to increae market tranparency; implement meaure to develop public awarene of the proviion of thi Act;

29 Competition Act, 1998 (Conolidated verion) 29 CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT invetigate and evaluate alleged contravention of Chapter 2; (d) grant or refue application for exemption in term of Chapter 2; (e) authorie, with or without condition, prohibit or refer merger of which it receive notice in term of Chapter 3; (f) negotiate and conclude conent order in term of ection 63; (g) refer matter to the Competition Tribunal, and appear before the Tribunal, a required by thi Act; (h) negotiate agreement with any regulatory authority to co-ordinate and harmonize the exercie of juridiction over competition matter within the relevant indutry or ector, and to enure the conitent application of the principle of thi Act; (i) participate in the proceeding of any regulatory authority; (j) advie, and receive advice from, any regulatory authority; (k) over time, review legilation and public regulation, and report to the Miniter concerning any proviion that permit uncompetitive behaviour; and (l) deal with any other matter referred to it by the Tribunal. (2) In addition to the function lited in ubection (1), the Competition Commiion may report to the Miniter on any matter relating to the application of thi Act; enquire into and report to the Miniter on any matter concerning the purpoe of thi Act; and perform any other function aigned to it in term of thi or any other Act. (3) The Miniter mut table in the National Aembly any report ubmitted in term of ubection (1)(k), and any report ubmitted in term of ubection (2) if that report deal with a ubtantial matter relating to the purpoe of thi Act within 14 day after receiving that report from the Competition Commiion, if Parliament i in eion at that time; or if Parliament i not in eion, within 14 day after the commencement of the next eion. (4) The Miniter may, in conultation with the Competition Commiion, and by notice in the Gazette, precribe regulation for matter relating to the function of the Commiion, including -

30 30 Competition Act, 1998 (Conolidated verion) CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT (d) (e) (f) (g) (h) form; time period; information required; additional definition; filing fee; acce to confidential information; manner and form of participation in Commiion procedure; and procedure. 22. Appointment of Commiioner (1) The Miniter mut appoint a peron with uitable qualification and experience in economic, law, commerce, indutry or public affair to be the Commiioner for a term of five year. (2) The Miniter may re-appoint a peron a Commiioner at the expiry of that peron term of office. 1 (3) The Commiioner i the Chief Executive Officer of the Competition Commiion, i reponible for the general adminitration of the Commiion and for carrying out any function aigned to it in term of thi Act, and mut perform the function that are conferred on the Commiioner by or in term of thi Act; manage and direct the activitie of the Commiion; and upervie the Commiion taff. (4) The Miniter mut, in conultation with the Miniter of Finance, determine the Commiioner remuneration, allowance, benefit, and other term and condition of employment. 2 () The Commiioner, on one month written notice addreed to the Miniter, may reign a Commiioner.

31 Competition Act, 1998 (Conolidated verion) 31 CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT (6) The Miniter mut remove the Commiioner from office if that peron become ubject to any of the diqualification referred to in ection 28(3) to (d); and other than a provided in paragraph, may remove the Commiioner from office only for (i) (ii) (iii) eriou miconduct; permanent incapacity; or engaging in any activity that may undermine the integrity of the Competition Commiion. 23. Appointment of Deputy Commiioner (1) The Miniter mut appoint at leat one peron, and may appoint other peron, with uitable qualification and experience in economic, law, commerce, indutry or public affair a Deputy Commiioner to ait the Commiioner in carrying out the function of the Competition Commiion. 1 (2) The Miniter mut deignate a Deputy Commiioner to perform the function of the Commiioner whenever the Commiioner i unable for any reaon to perform the function of the Commiioner; or the office of Commiioner i vacant. 24. Appointment of inpector (1) The Commiioner may appoint any peron in the ervice of the Competition Commiion, or any other uitable peron, a an inpector.

32 32 Competition Act, 1998 (Conolidated verion) CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT (2) The Miniter may, in conultation with the Miniter of Finance, determine the remuneration paid to a peron who i appointed in term of ubection (1), but who i not in the full-time ervice of the Competition Commiion. (3) An inpector mut be provided with a certificate of appointment igned by the Commiioner tating that the peron ha been appointed a an inpector in term of thi Act. (4) When an inpector perform any function in term of Chapter, the inpector mut be in poeion of a certificate of appointment iued to that inpector in term of ubection (3); and how that certificate to any peron who (i) (ii) i affected by the exercie of the function of the inpector; and requet to ee the certificate. 2. Staff of Competition Commiion (1) The Commiioner may 1 appoint taff, or contract with other peron, to ait the Competition Commiion in carrying out it function; and in conultation with the Miniter and Miniter of Finance, determine the remuneration, allowance, benefit, and other term and condition of appointment of each member of the taff. PART B THE COMPETITION TRIBUNAL 26. Etablihment and contitution of Competition Tribunal (1) There i hereby etablihed a body to be known a the Competition Tribunal, which

33 Competition Act, 1998 (Conolidated verion) 33 CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT (d) ha juridiction throughout the Republic; i a juritic peron; i a Tribunal of record; and mut exercie it function in accordance with thi Act. (2) The Competition Tribunal conit of a Chairperon and not le than three, but not more than ten, other women or men appointed by the Preident, on a full or part-time bai, on the recommendation of the Miniter, from among peron nominated by the Miniter either on the Miniter initiative or in repone to a call for nomination, which mut be publihed by the Miniter in the Gazette. (3) The Preident mut - appoint the Chairperon and other member of the Competition Tribunal on the date that thi Act come into operation; and appoint a peron to fill any vacancy on the Tribunal. 1 (4) Section, read with the change required by the context, applie to the Competition Tribunal. 27. Function of Competition Tribunal (1) Upon a matter being referred to it in term of thi Act, the Competition Tribunal may grant an exemption from a relevant proviion of thi Act; authorie a merger, with or without condition, or prohibit a merger; adjudicate in relation to any conduct prohibited in term of Chapter 2 or 3, by determining whether prohibited conduct ha occurred, and if o, impoe a remedy provided for in Chapter 6; or (d) grant an order for cot in term of ection 7.

34 34 Competition Act, 1998 (Conolidated verion) CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT (2) Section 21(4), read with the change required by the context, applie to the Competition Tribunal. 28. Qualification of member of Competition Tribunal 1 (1) The Chairperon and other member of the Competition Tribunal, viewed collectively mut repreent a broad cro-ection of the population of the Republic; and comprie ufficient peron with legal training and experience to atify the requirement of ection 31(2). (2) Each member of the Competition Tribunal mut be a citizen of South Africa, who i ordinarily reident in South Africa; have uitable qualification and experience in economic, law, commerce, indutry or public affair; and be committed to the purpoe and principle enunciated in ection 2. (3) A peron may not be a member of the Competition Tribunal if that peron i an office-bearer of any party, movement, organiation or body of a partian political nature; i an unrehabilitated inolvent; i ubject to an order of a competent court holding that peron to be mentally unfit or diordered; or (d) ha been convicted of an offence committed after the Contitution of the Republic of South Africa, 1993 (Act No. 0 of 1993), took effect, and entenced to imprionment without the option of a fine. 29. Term of office of member of Competition Tribunal 2 (1) Subject to ubection (2), the Chairperon and each other member of the Competition Tribunal erve for a term of five year. (2) The Preident may re-appoint a member of the Competition Tribunal at the expiry of that member term of office, but no peron may be appointed to the office of the Chairperon of the Tribunal for more than two conecutive term.

35 Competition Act, 1998 (Conolidated verion) 3 CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT (3) The Chairperon, on one month written notice addreed to the Miniter, may reign from the Competition Tribunal; or reign a Chairperon, but remain a a member of the Tribunal. (4) A member of the Competition Tribunal other than the Chairperon may reign by giving at leat one month written notice to the Miniter. () The Preident, on the recommendation of the Miniter, mut remove the Chairperon or any other member of the Competition Tribunal from office if that peron become ubject to any of the diqualification referred to in ection 28(3); and other than a provided in ubection, may remove the Chairperon or a member from office only for (i) eriou miconduct; (ii) permanent incapacity; or 1 (iii) engaging in any activity that may undermine the integrity of the Tribunal. 30. Deputy Chairperon of Competition Tribunal (1) The Preident mut, on the recommendation of the Miniter, deignate a member of the Competition Tribunal a Deputy Chairperon of the Tribunal. (2) The Deputy Chairperon perform the function of Chairperon whenever the office of Chairperon i vacant; or the Chairperon i for any other reaon temporarily unable to perform the function of Chairperon.

36 36 Competition Act, 1998 (Conolidated verion) CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT 31. Competition Tribunal proceeding (1) The Chairperon i reponible to manage the caeload of the Competition Tribunal, and mut aign each matter referred to the Tribunal to a panel compoed of any three member of the Tribunal. 1 (2) When aigning a matter in term of ubection (1), the Chairperon mut enure that at leat one member of the panel i a peron who ha legal training and experience; and deignate a member of the panel to preide over the panel proceeding. (3) If, becaue of withdrawal from a hearing in term of ection 32, reignation, illne or death, a member of the panel i unable to complete the proceeding in a matter aigned to that panel, the Chairperon mut direct that the hearing of that matter proceed before any remaining member of the panel ubject to the requirement of ubection (2); or terminate the proceeding before that panel and contitute another panel, which may include any member of the original panel, and direct that panel to conduct a new hearing. (4) The deciion of a panel on a matter referred to it mut be in writing and include reaon for that deciion. () A deciion of a majority of the member of a panel i the deciion of the Tribunal. 32. Conflict and dicloure of interet by member of Competition Tribunal (1) A member of the Tribunal may not repreent any peron before a panel of the Tribunal. 2 (2) If, during a hearing, it appear to a member of the Competition Tribunal that a matter concern a financial or other interet of that member contemplated in ection (2), the member mut immediately and fully dicloe the fact and nature of that interet to the Chairperon and to the preiding member at that hearing; and withdraw from any further involvement in that hearing.

37 Competition Act, 1998 (Conolidated verion) 37 CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT 33. Acting by member of Competition Tribunal after expiry of term of office If, on the expiry of the term of office of a member of the Competition Tribunal, that member i till conidering a matter before the Tribunal, that member may continue to act a a member in repect of that matter only. 34. Remuneration and benefit of member of Competition Tribunal (1) The Miniter may, in conultation with the Miniter of Finance, determine the remuneration, allowance, and other benefit of the Chairperon, Deputy Chairperon and other member of the Competition Tribunal. (2) The Miniter may not during the term of office of a member of the Competition Tribunal, reduce the member alary, allowance or benefit. (3) The Miniter may determine any other condition of appointment not provided for in thi ection. 3. Staff of Competition Tribunal The Chairperon may- 1 appoint taff, or contract with other peron, to ait the Competition Tribunal in carrying out it function; and in conultation with the Miniter and the Miniter of Finance, determine the remuneration, allowance, benefit, and other term and condition of appointment of a member of the taff.

38 38 Competition Act, 1998 (Conolidated verion) CHAPTER 4 : COMPETITION COMMISSION, TRIBUNAL, AND COURT PART C THE COMPETITION APPEAL COURT 36. Etablihment and contitution of Competition Appeal Court (1) There i hereby etablihed a court to be known a the Competition Appeal Court, which i a court contemplated in ection 166(e) of the Contitution with a tatu imilar to that of a High Court; ha juridiction throughout the Republic; and i a court of record. (2) The Competition Appeal Court conit of member appointed by the Preident in accordance with ection 174 of the Contitution, and comprie at leat three member, each of whom i a judge of the High Court, and one of whom mut be deignated by the Preident to be Judge Preident of the Competition Appeal Court; and 1 two other member, each of whom (i) (ii) i a citizen of South Africa, and i ordinarily reident in the Republic; ha uitable qualification and experience in economic, law, commerce, indutry or public affair; and (iii) i committed to the purpoe and principle mentioned in ection Function of Competition Appeal Court (1) The Competition Appeal Court may conider any appeal from, or review of, a deciion of the Competition Tribunal.