20 November 2023
RBB response to South African Commission’s draft guidelines for public interest in merger control
On 6 October 2023, the South African Competition Commission (“the Commission”) published its draft amended public interest guidelines relating to merger control (“draft guidelines”). The aim of the draft guidelines is to set out the approach that the Commission may adopt, and the type of information it may require, when evaluating the public interest factors of the South Africa Competition Act No. 89 of 1998 (“the Act”).
In response to the Commission’s call for comments on the draft guidelines, RBB partner Patrick Smith and senior associate Simon Lee, with input from Jacob Muller, prepared a submission which sets out a number of observations.
We support the Commission’s decision to publish guidelines in respect of how it intends to approach issues related to the public interest in the context of mergers in South Africa. Guidelines are likely to provide businesses with greater certainty in respect of how the Commission intends to enforce the Amendment Act in practice, which would in turn be expected to reduce instances where firms might otherwise be deterred from merger activity as a result of uncertainty.
We also endorse some of the economic principles that appear to underpin the Commission’s intended approach to assessing issues of public interest in merger contexts. In particular, we welcome an approach to merger control that is grounded in considerations of merger specificity, substantiality, and proportionality. In our view, these principles, if applied consistently, would contribute to a sound and objective merger control framework, and would ultimately serve to benefit the public interest in the long term.
In our submission we also highlight parts of the draft guidelines that, in our view, may risk producing unintended adverse consequences if left as currently formulated, both in a general sense (e.g., chilling merger activity), and in a more specific sense (e.g., restricting the ability of HDIs/workers to realise the value of their investments). We thus recommend that certain parts of the guidelines be revised, developed, or refined, with a view to avoiding such unintended adverse consequences.