Competition legal services

Because of a shortage in supplies, my main supplier has hiked the prices of products to uneconomical levels and there is no other viable source of the products. Is there a remedy?

The Competition Act prohibits a firm that is dominant in the market for any product from charging excessive prices for that product, to the detriment of customers and consumers. A complaint can be laid with the Competition Commission, which request the Competition Tribunal to impose financial penalties on the offending party and order it to take suitable steps to remedy the harm caused.

It is prohibited for me to collaborate with my competitors, but there is no alternative if we are to obtain supplies of essential goods and distribute our products. How can we achieve this?

The Competition Commission is authorised to grant an exemption, or written permission to implement an agreement or practice which constitutes a prohibited practice, but is found to contribute to:

• Maintenance or promotion of exports;
• Promotion of the competitiveness of small businesses or firms controlled or owned by historically disadvantaged persons;
• Changing the productive capacity to stop decline in an industry;
• Maintaining economic stability in an industry.

If a firm or group of firms wishes to implement an arrangement that would amount to a prohibited practice, but can show that it contributes to one of these objectives, the firm or group of firms may apply to the Commission for an exemption. Exemptions have been granted in the healthcare, banking and retail leasing sectors, in response to the COVID-19 pandemic.

I have been approached by a competitor to acquire a stake in its business in order to ensure its survival. Are there any extraordinary competition law concerns that I should consider?

Every proposed merger, which has a value in excess of the statutory threshold, will be assessed by the Competition Commission to assess whether it will detrimentally affect competition in the relevant market and, if so, whether it can justified on the basis of other technological, efficiency or public interest grounds. One of the grounds which the Commission may take into account is that ‘the business or part of the business of a party to a merger has failed or is likely to fail’ and the firm concerned will exit the market if the merger is not approved.

If a company is in business rescue or liquidation, does it still need approval from the Competition Authorities to dispose of its business or assets?

Where a company in business rescue or liquidation wishes to dispose of its business as a going concern, or of all or the bulk of its assets, the sale will require the approval of the competition authorities if the value of the transaction exceeds the statutory thresholds in terms of the Competition Act. However, if there is a likelihood that the sale will allow the business to continue to operate, and reduce the possibility of job losses or detrimental effects on smaller suppliers, the authorities are likely to look more favourably on it.