South Africa: Chunks of SA's New Competition Law Hand Huge New Powers to Trade and Industry Minister Ebrahim Patel


On Friday 12 July certain provisions of the Competition Amendment Act were enacted via a published notice in the Government Gazette. Dealmakers are now subject to more rigorous merger rules and the Competition Commission can break up companies it deems too big. But that is just the beginning. More regulations are on the way and experts say they have the potential to distort the process of competition rather than enhance it.

The Competition Commission and the Department of Trade and Industry have just become a lot more powerful. Not only do they now dictate the rules of any new merger activity in the country, but they have extensive powers in launching inquiries into current corporate structures and deals concluded in the past.

And the stakes are high. Contraventions of regulations are now subject to a penalty on a first offence and repeat offenders are also liable for a penalty of up to 25% of turnover.

What adds insult to injury is that even fully compliant companies can be penalised for simply being too big for the authorities' liking. The commission can then recommend that conglomerates break into smaller operations if they see it as a threat to fair practice.


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