Page 63 - Profmark BSA Guide 2025

COMPETITION LAW

A knowledge of competition law is essential for any successful business operating
in SA, especially when creating a business strategy, launching a new product or
challenging competitors.
The Competition Act, 89 of 1998, as amended, (CA) aims to maintain and promote
competition in the South African market in order to, inter alia, provide South Africans
with an equal opportunity to participate fairly in the national economy, to achieve a
more effective and efficient economy and provide for markets in which consumers
have access to, and can freely select, the quality and variety of goods and services
they desire, to restrain particular trade practices which undermine competitive
economy, to promote a greater spread of ownership within the economy, in particular
by increasing the ownership of historically disadvantaged individuals, and to ensure
that small businesses have an equitable opportunity to participate in the economy.
The CA applies to all economic activity within, or having an effect within SA and
regulates relationships between competitors and relationships in the supply chain.
Control of Mergers and Acquisitions
Mergers and acquisitions are controlled, in that the CA requires a notification and
prior approval procedure for certain mergers and acquisitions, carries significant
penalties for contraventions – and reaches beyond SA, applying to economic activity
both in and having an effect in the country. Public interest plays a significant role in
merger assessments. The South African Competition Commission (SACC) is mainly
focused on the potential dilution of B-BBEE/historically disadvantaged persons
ownership structures due to merger transactions. In addition, a recent Constitutional
Court decision emphasised that competition law must be interpreted and applied with
regard to the Constitution, thus the scope of public interest considerations may be
broadened to include constitutional issues.

61