An increasing number of African jurisdictions have strengthened their competition and antitrust regimes over the last few years through the introduction of new laws and regulations, and the enforcement of existing laws.
Merger control is also actively being enforced by competition regulators in some countries, according to lawyers interviewed by Law.com International for this article.
One of the major issues lawyers say they have to contend with in Africa in the antitrust and competition space is the disparity in enforcement mechanisms in different jurisdictions.
“It’s challenging for practitioners who are helping companies to navigate their way in the competition space in Africa,” said Nkonzo Hlatshwayo, director at South African law firm Werksmans Attorneys.
“If you are doing a transaction in South Africa, it is problematic if it substantially prevents or lessens competition, whereas other African countries use slightly different standards,” he said.
Today, almost every African country has a competition authority and regional authorities are also well established, said Hlatshwayo.
The latter include the Common Market for Eastern and Southern Africa (COMESA), which is now a formidable regime with 21 member states, he said.
“Even smaller countries now have competition legislation and everywhere you turn there are competition authorities that you have to deal with,” said Hlatshwayo.
Prior to joining private practice in 2004, Hlatshwayo acquired experience as a regulator, having worked for the South African Competition Authority for many years. He said he also served as chairman of the Swaziland Competition Commission.
“In 2004, when I joined the legal sector as a practitioner, we were required to notify authorities in a handful of countries.
“But we are often now required to notify a significant number of authorities, and it is sometimes hard to keep up.”
Nigeria Lagging with Competition Laws
Nigeria didn’t have a competition framework until about five years ago.
“It was only enacted in 2018 and came into force in 2019,” said Zelda Akindele, partner at Templars in Lusaka, who runs the competition team there.
“Considering the size of the Nigerian economy it’s mind blowing that we didn’t have any competition framework until so recently.”
Certain regulators did have powers to approve transactions from a competition perspective, but those were individual provisions in specific sector regulations, she said.
“Competition law goes beyond mergers and acquisitions and includes provisions around restrictive agreements, abuse of dominant position, price fixing, bid rigging, and unfair business practices.
“But none of these existed in Nigeria even though we had a merger approval and notification system.”
Since the competition legislation was introduced, there has been fantastic progress in Nigeria, she said. The regulator, the Federal Competition and Consumer Protection Commission, is actively engaged and has provided clarity where it’s required, said Akindele.
“So, you know exactly what they are looking at when they are reviewing a merger, and they provide guidelines around the abuse of dominant position, so you know what it means and how you would be penalized.
“They also provide guidelines in specific markets where they have seen abusive practices, for example with digital lenders.”
She said the business community is now getting to grips with what the legislation is about and how they need to conduct their businesses and investments to stay aligned with the framework.
Zambia Among the First with Competition Laws
Zambia has one of the oldest competition authorities in Africa, according to Sydney Chisenga, managing partner at Corpus Legal Practitioners in Lusaka, who is also the African liaison officer of the antitrust committee of the International Bar Association (IBA).
He said since 1994 there has been a steady and evolving implementation and enforcement of antitrust and competition laws and restrictive business practices in the country.
This includes cases of cartel conduct and dominant activities, excessive pricing cases and consumer protection cases, and cases of denial of the use of an essential facility by a competitor.
“We had a case where the National Airports Corporation was taken to the competition commission because it was denying one of the ground handling companies to access the airport ramp,” he said. The competition commission subsequently found in favour of the latter.
“Then we went to the competition tribunal to defend the position of the competition commission,” said Chisenga.
From an Africa-wide perspective, 15 years ago most African countries did not have a competition authority, he said.
But now 50% to 70% of them have competition laws and the appropriate competition authorities that have come into being.
He said the biggest challenges in tackling antitrust and anticompetitive practices in Africa include lack of awareness of the laws by the local people.
And across competition authorities there is a lack of well-trained human resources to detect anticompetitive practices.
“Most competition authorities are funded by the government. So, you find countries where there is no awareness of the effects of anticompetitive conduct and the government does not fully support the authority in terms of the allocation of resources to do their work.”
He said the emergence of multi-regional competition authorities that have different regulations, especially for cross border transactions, may result in the need for multiple compliance filings and is another challenge for legal practitioners.
Newer Authorities Increasingly Ambitious
Mark Griffiths, director at Norton Rose Fulbright South Africa, said: “What we have seen is an evolution of enforcement trends whereby new competition authorities are becoming increasingly ambitious in the type of cases that they are bringing.
For reasons such as capacity constraints, new authorities elect to prioritise either merger control or cartel enforcement in key industry sectors, he said.
“But a range of African authorities are well established and willing to investigate similar sectors as peer authorities in the EU and the US.”
For example, the South African Competition Commission is investigating media and digital platforms in a manner somewhat similar to other authorities around the world.
And the COMESA competition commission investigated the distribution of media rights for the Africa Cup of Nations (AFCON) on the back of the previous decisions by the European Commission in the sports TV rights sector, said Griffiths.
Lawyers interviewed for this article agreed that the proliferation of antitrust and competition laws across the continent will continue its momentum and bodes well for the business community and future investment in Africa.