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BusinessDay www.businessday.co.za March 2022
BUSINESS LAW & TAX
SA watchdogs team up to sharpen bite
CAUSE FOR CO-OPERATION
MOU will enhance co-operation between •Competition Commission and information regulator Ahmore Burger-Smidt Werksmans
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t is a well-established practice for regulators across various jurisdictions to establish memoranda of understanding (MOUs) or memoranda of agreement (MOAs) with each other. Such agreements generally aim to establish a mutual approach in dealing with matters giving rise to an overlap of the regulators’ respective responsibilities. That is what the MOA between the Competition Commission of SA (commission) and the Information Regulator of SA (information regulator) seeks to achieve. The MOA will govern the information exchange between the two regulators as well as facilitate further interactions and co-operation between them in matters that give rise to overlaps in competition law, data privacy and access to information. This allows both regulators to, inter alia: ● Effectively co-ordinate the exercise of jurisdictional powers when taking decisions. ● Apply a consistent interpretation and application of the principles of competition law and privacy law when exercising their powers and functions in terms of their respective enabling legislation.
● Promote co-operation, including in respect of setting standards or conditions that affect matters of common interest, any joint investigations, market inquiries and/or research studies that the regulators may agree to undertake. ● Consult and timeously provide each other with necessary information in respect of the investigation of anticompetitive practices, regulation of mergers and acquisitions, as well as investiga-
THE MEMORANDA OF UNDERSTANDING WILL GOVERN THE INFORMATION EXCHANGE BETWEEN THE TWO REGULATORS tion of noncompliance with the provisions of the Protection of Personal Information Act, 4 of 2013 (Popia) and Promotion of Access to Information Act, 2 of 2000 (Paia). The MOA does not, however, seek to compel either regulator to obtain approval from the other to carry out its statutory powers and functions even if those powers and functions overlap with those of the other. Moreover, neither regulator can exercise powers or perform func-
tions under the other’s governing legislation. However, to ensure a more aligned system of regulation as well as limit regulatory uncertainty facing businesses, the MOA deems it essential that the information regulator and the commission co-operate with and consult each other on a regular basis in the exercise of their powers in matters that affect the mandate and functions of the other. What is interesting to note is the extent of influence that the information regulator may have in competition matters as a result of the MOA. Though the MOA states that the commission and the information regulator shall make independent determinations on the basis of the criteria and mandates of their respective legislative and regulatory frameworks, it also states that in arriving at their determinations they may consult each other in as far as competition matters are concerned. Though the extent of this influence is yet to be seen, it will be interesting to see how the commission approaches competition matters such as merger reviews where personal information may be significantly impacted. The MOA also creates a duty for each regulator to notify the other in instances where a complaint is lodged
/123RF — BAKHTIARZEIN regarding a practice or conduct over which both regulators may have concurrent jurisdiction. This enables consultations to take place between the two and may extend as far as having members from the one regulator participate in the processes of the other through, inter alia, attending meetings and providing inputs or making representations on the investigation and determination of a matter. A joint working committee constituted by representatives of both regulators is to be established pursuant to the MOA and shall function on an ongoing basis. The committee will facilitate and manage co-operation and consultation in respect of matters dealt with by each regulator in terms of the MOA. It will also propose, when necessary, any amendment or supplementation to the MOA. The committee will also have the important role of advising the management of both regulators on issues
relating to competition law, data privacy and access to information. In that regard, the committee will make recommendations on: ● The types of conduct or transactions affected by the abovementioned areas of law in which concurrent jurisdiction is to be exercised by the two regulators. ● International approaches
A JOINT WORKING COMMITTEE CONSTITUTED BY REPRESENTATIVES OF BOTH REGULATORS IS TO BE ESTABLISHED to issues of overlap concerning jurisdiction between a competition authority and the information regulator. ● Amendments to the relevant statutes. ● Any other related matter. Consequently, the committee serves as the link
between the information regulator and the commission, making it an important body for the effective implementation of this collaboration arrangement. Notwithstanding the above, the regulator remains the custodian of Popia. It is the subject matter expert on privacy law and sits in pole position to bring its focused knowledge and experience to guide the commission on the proper application of privacy principles. The MOA reflects a global trend in jurisdictions that have both competition and privacy regulators working hand-in-hand to co-ordinate efforts in regulating competition and privacy issues. It is the first of its kind in SA between the commission and the information regulator and reinforces the relevance of privacy issues in competition matters. This will in no doubt lead to an increased demand on the regulator’s resources given the number of competition matters that give rise to privacy concerns.
Continent is in step over school uniforms Lerisha Naidu & Jarryd Hartley Baker McKenzie African antitrust authorities have demonstrated unity of focus in their domestic investigations and prosecution of arrangements relating to the supply of school uniforms. The investigations have been directed at two core issues: the pricing behaviour of suppliers; and the existence and effect of exclusive supply arrangements between school uniform suppliers and schools. While these investigations,
in and of themselves, are interesting, it is unsurprising that pricing behaviour and exclusivity arrangements have come under the scrutiny of antitrust authorities. What is perhaps most distinct about these investigations is the parallel nature of the enforcement action on the continent, in relation to a key sector that underpins most national development plans and policies. The following bears mentioning: In SA and after a number of competition complaints, the authorities initiated an investigation giving rise to the
conclusion of settlements with suppliers. On January 10 2022, the authorities proceeded to issue guidelines relevant to the school uniform investigation. The Egyptian competition authority also issued a decision impugning an exclusivity arrangement between a school and uniform supplier. Similarly, Malawi’s Competition and Fair Trading Commission issued a warning, threatening enforcement action against institutions engaging in exclusive supply agreements in this sector. Zimbabwe’s Competition
and Tariff Commission blocked an agreement between a school and two uniform and stationery suppliers after a complaint was lodged and a consequent investigation had been conducted. The Eswatini Competition Commission also investigat-
IT IS UNSURPRISING PRICING BEHAVIOUR AND EXCLUSIVITY ARRANGEMENTS HAVE COME UNDER SCRUTINY
ed exclusive supply agreements for the supply of school uniforms and found these agreements to be a violation of local legislation, declaring such agreements to be unlawful and invalid. The Namibian Competition Commission issued an advisory notice, cautioning market players on the potentially anticompetitive nature of exclusive arrangements, advising schools to refrain from these agreements or risk investigation. What is clear about these developments is the multijurisdictional and parallel
focus of competition law authorities on the continent. Not only are regulators robustly ramping up on enforcement activity but are, without question, targeting similar sectors and antitrust issues. Companies that have a pervasive physical presence in Africa should ensure rigorous antitrust enforcement in all jurisdictions to avoid coming under the spotlight, not just once, but seemingly across jurisdictions where authorities are demonstrating a unity of focus, enforcing local laws with equal vigour.