Thread by @CompComSA

From today 20 October until Friday 22 October, the @CompComSA & @comptrib host the 15th Annual Competition Law, Economics & Policy Conference on the topic: “Economic Recovery & Reconstruction: The Role of Competition Policy”

#15AnnualCompetitionConference

Click here to access today’s programme :
compcom.co.za/15th-annual-co…

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

Live stream the conference here:

Live stream the conference here:

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

Opening Address delivered by the Commissioner @TembinkosiB
"We, as a generation and as a people, truly are in this together. We also know the economic devastation occasioned, or in our case, worsened by Covid 19". #15AnnualCompetitionConference #EconomicRecovery

"It is for this reason that we have chosen the theme of the conference, Economic Recovery and Reconstruction: the role of competition policy." - Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

"It is our firm belief that if competition policy does not contribute to recovery and growth, then it is good for nothing" - Commissioner
@TembinkosiB.

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

"We have said this before, that the South African competition law must respond to both economic and development challenges of the country" - Commissioner
@TembinkosiB.

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

"We live in a middle-income country, & there are two things awaiting us, either we slide deeper into an economic basket case with worsening unemployment, poverty & inequality,...

or join the rapidly industrializing and increasingly prosperous emerging economies. Much of what happens to us depends on the decisions we make and implement today" - Commissioner @TembinkosiB

"As things stand, we are getting poorer, and each day we are drifting away from shared prosperity" - Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

"While no competition policy can solve of the country’s problems, we are determined to contribute by asking the right questions, and playing our part in answering those questions within our authority" - Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery

"As @CompComSA we have always been conscious our context. We are interested in the transformational impact of our decisions at both micro macro level"- Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

"The annual competition conference has never been a talk shop without concrete outcomes. This conference has developed a reputation for addressing current pertinent issues, regardless of their implication for @CompComSA or @comptrib" - Commissioner @TembinkosiB

"We have always presented robust debates on competition cases that have gone in our favour and those that we lost in the courts" - Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

"We have had policy discussions on matters that challenge us and on issues that we agree on. We have always made it a point to include supportive and dissenting voices on our panels" - Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery

"This year we continue this tradition of addressing even the most difficult topics head on and we look forward to the debates and the outcomes that are likely to emerge from each session and each lecture" - Commissioner @TembinkosiB
#15AnnualCompetitionConference

Affirmation of Constitutionalism:

"We have for some time now been concerned about the development of substantive competition law in parallel with the constitution" - Commissioner @TembinkosiB
#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction

"Whilst the case for the constitutional alignment of the procedural aspects is clear cut, it was less clear in respect of the substantive aspects of competition law" - Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction

"@CompComSA sought to test this relationship between competition law and constitutional law in @CompComSA of South Africa v Media 24(Pty) Ltd in a matter involving the appropriate test to predation or predatory pricing. However, on that occasion @ConCourtSA was divided divided..

But just last week, Friday,15 October 2021, the @ConCourtSA delivered an important judgement in @CompComSA v MediClinic South Africa Limited and Another, penned by Mogoeng Mogoeng (CJ, as he then was), which:

Firstly, clarifies the intersection between competition law and constitutional law" - Commissioner @TembinkosiB. #15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

"@ConCourtSA strongly re-asserts the mandatory application to the Competition Act of the interpretative injunction in section 39(2) of the Constitution,..

which enjoins every court or @comptrib, when interpreting any legislation, to promote the spirit, purport and objects of the Bill of Rights"- Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

"In this regard, the Constitutional Court said at paragraph [9] “The invocation of section 39(2) of the Constitution in interpreting legislation that implicates a right in the Bill of Rights, ought not be viewed as an optional extra"- Commissioner @TembinkosiB

"It should rather be viewed be seen as a constitutional injunction" -Commissioner @TembinkosiB.

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

"Whether any of the parties have specifically contended for the interpretation of legislation with express reference to or through the prism of section 39(2) not really matter" - Commissioner @TembinkosiB.

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction

"It is, broadly speaking, a constitutional obligation that rests on the shoulders of any court interpreting legislation or developing the common law or customary law, to promote the spirit, purport and objects of the Bill of Rights"- Commissioner @TembinkosiB.

"Secondly, re-echoes the principle of deference to the expertise of @comptrib as had been articulated by the Competition Appeal Court itself in its decisions in Imerys and Schumman & thus sets the threshold for appellate interference with @comptrib's findings"...

"Thirdly, is sensitive to the impact of inequality on consumer welfare in mergers" - Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

In this regard, @ConCourtSA at paragraph [73] said: “maintaining or increasing the scope for choice of essential and much- needed services with particular regard to the plight of the financially under-resourced all the vulnerable,..

should always be at the back of decisionmakers’ mines when dealing with mergers"- Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

"The intersection between constitution law and competition law will shape the development of competition law in the post-Mediclinic world"- Commissioner @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

Towards efficient management of litigation:
"Our institutions are clogged with a backlog of both investigations and prosecutions flowing from the lockdown as well as increased volumes of cases emanating from the pandemic period" - Commissioner @TembinkosiB

"Compounding of situation are parties that game the system to prevent the cases from being held on the merit. In recent years, there has been a proliferation of exception applications in @comptrib which has had an effect of delaying prosecutions from being heard on the merits"..

"We are of the firm view that exceptions should not be used to ventilate:
- issues that ought to be raised in the answering affidavit; and
-issues that should be heard at the trial"- Commissioner @TembinkosiB
#15AnnualCompetitionConference #EconomicRecovery

"@CompComSA v Shoprite Checkers (Pty) Ltd and Another the Competition Tribunal had, at exception stage, expressly rejected the possibility of the prosecution of a single economic entity under the abuse of dominance provisions as not forming part of our law"..

"However, the Competition Appeal Court has reversed this finding on the basis that it was premature for the Tribunal to make such a legally complex finding at exception stage and that such a finding could only be made after at trial stage after a full hearing"..

In that case, the Commission bemoans the phenomenon of “trial by exceptions.” - Commissioner @TembinkosiB

Parent can be cited: In Computicket 2, @CompComSA asserted that the holding company, Shoprite Checkers can be cited and therefore face potential liability for the abuse of dominance by Computicket"- Commissioner - @TembinkosiB

#15AnnualCompetitionConference #EconomicRecovery

"Computeticket stand accused of excluding other ticketing agents from the market through exclusive agreements.

The Constitutional Court ruled that it is premature for Shoprite to bring its objections to the case, they must answer" - Commissioner @TembinkosiB

Covid 19 Response: "Covid19 was the dominant feature that defined much of our operations in this past year. It brought upheaval and very difficult strategic choices but I am immensely proud of how @CompComSA & @comptrib weathered the storm"- Commissioner @TembinkosiB

Live stream the conference here:

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

Media Release : @CompComSA launches a multidisciplinary research grant programme for high quality research proposals

ACADEMIC SESSION 1 A - Competition enforcement in sectors that are critical for economic recovery (including the digital economy) Discussant: Grashum Mutizwa (Principal Analyst, @CompComSA )

Regional markets, competition and sustainability concerns in key food products: competition policy for recovery and resilience by Grace Nsomba, Simon Roberts, Ntombi Tshabalala

"The agricultural sector is key to fostering economic growth, reducing poverty and improving food security in Eastern and Southern Africa (ESA)" - Grace Nsomba, Simon Roberts, Ntombi Tshabalala

"However, the region has run a food trade deficit, as has the continent, and this is projected to worsen with continued demand growth (OECD/FAO, 2021)"- Grace Nsomba, Simon Roberts, Ntombi Tshabalala

"Climate change means higher average temperatures in general, and the frequency of weather- and climate-related disasters has increased since the 1970s with many regions in Africa becoming drier (Davis and Vincent, 2017; WMO, 2020)"- Grace Nsomba, Simon Roberts, Ntombi Tshabalala

"The impacts are compounded by the continent being largely dependent on rainfall, with little irrigation"- Grace Nsomba, Simon Roberts, Ntombi Tshabalala

"In ESA, there is progressive drying in the southern parts of the region, however, continued levels of good rainfall are expected in the central and northern areas of ESA (IPCC, 2021) which,...

coupled with good soils, means there is the potential to increase food production substantially" - Grace Nsomba, Simon Roberts, Ntombi Tshabalala

"Increased agricultural production and more resilient food systems require a range of measures relating to seeds, sustainable water and land use, investments in irrigation, storage facilities, logistics, processing & foods standards"-Grace Nsomba, Simon Roberts, Ntombi Tshabalala

"However, less attention is generally paid to the role of effectively functioning competitive markets across the region and of competition policy in ensuring this"- Grace Nsomba, Simon Roberts, Ntombi Tshabalala

"For example, if storage facilities or transport services are monopolized or operated by cartels then supra-competitive margins will be earned and smaller market participants excluded" - Grace Nsomba, Simon Roberts, Ntombi Tshabalala

#15AnnualCompetitionConference

"Similarly, concentration and anti-competitive conduct in inputs such as fertilizer and seeds, and by large traders, undermines the returns to producers"- Grace Nsomba, Simon Roberts, Ntombi Tshabalala

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction

Principles for setting merchant discount rates and interchange Prepared by: Ryan Hawthorne*, Sha’ista Goga*, Nicola Wills*, Zubair Patel*, Gareth McHardy* and Rory Macmillan+

"Instant payment systems permit low-value transactions at very low cost, particularly benefiting low-income customers" - Ryan Hawthorne*, Sha’ista Goga*, Nicola Wills*, Zubair Patel*, Gareth McHardy* and Rory Macmillan+

"In this report, we consider instant payments to merchants via four-party instant payment schemes in developing countries, involving acquiring payment services providers serving merchants, and issuers providing services to consumers"...

"These are similar in nature to four-party payment card schemes in developed countries, where regulators have intervened particularly on the interchange fees that flow from acquiring to issuing financial institutions"...

"Historically, card schemes used an MDR/interchange model to drive uptake and usage"- Ryan Hawthorne*, Sha’ista Goga*, Nicola Wills*, Zubair Patel*, Gareth McHardy* and Rory Macmillan+

"Regulatory intervention was based on the abuse of interchange, where competition between private card platforms to attract banks resulted in very high levels of interchange, resulting in lower uptake among smaller merchants"...

"Four-party instant payment systems, while similarly structured, have important differences to card platforms as they target lower income consumers, smaller merchants and have may lower costs due to use of digital infrastructure and cheaper devices"...

"There are also different competitive dynamics in instant payment systems, where the platform or switch is often not for profit, allowing for a variety of payment service providers"....

"Recent regulation of instant payment systems seems to be driven by the objective of building markets through lower prices"- Ryan Hawthorne*, Sha’ista Goga*, Nicola Wills*, Zubair Patel*, Gareth McHardy* and Rory Macmillan+

"However, there have been mixed results. There are therefore questions in respect of four-part instant payment platforms, including whether (i) consumers should pay, (ii) merchants should pay, (iii) any interchange should apply, and (iv) merchants should be allowed to surcharge".

"The first two questions we consider here are whether charges to merchants or consumers ought to be permitted. It turns out that low prices to both sets of customers are desirable"...

"If there is an incentive for the payment service provider to expand their solution as a result of ancillary benefits, such as retaining mobile subscribers on a mobile network or lending to merchants, then low fees to both merchants and consumers may be possible"...

"However, a prohibition on charges may harm the growth of instant payments or have other unintended effects, such as entrenching the dominance of incumbent platforms. Overall, flexibility is needed"..

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction

Digitalisation in Africa: Developments and regulatory challenges from an ICT perspective Sha’ista Goga and Ryan Hawthorne, Acacia Economics.

“In recent years the significant improvements in technology and introduction of digital technologies has significantly increased the range of uses and applications possible". - Sha’ista Goga and Ryan Hawthorne

"Digitalization, or use of digital technologies to change existing business models and processes, has improved efficiencies in a range of industries and has great potential for innovation in social services, health and education”- Sha’ista Goga and Ryan Hawthorne

“As a result, ICT and digital infrastructure are increasingly playing a central role in economic and social development”- Sha’ista Goga and Ryan Hawthorne

"While Africa currently lags other regions in terms of digital connectivity and use of digital technologies, there are several areas in which enhanced digitalization will have considerable benefits to economic development, education and healthcare”..

“This paper seeks to explore the impact of digital technologies in an African context with a view to highlighting the potential implications for growth of the industry and the regulation it necessitates"-Sha’ista Goga and Ryan Hawthorne

This will be used to draw out key implications and recommendations for competition, regulation and universal services. Furthermore, we also propose recommendations for next generation incentives for affordable access to digital services”-Sha’ista Goga and Ryan Hawthorne

WSG-Telkom Project COVID-19 and beyond: Rethinking industrial and competition policy
Nishal Robb and Thando Vilakazi.

“Since the end of formal apartheid in 1994, progress in changing entrenched patterns of economic participation, improving low levels of productive investment, & stimulating dynamism and diversification in the South African economy has been limited"-Nishal Robb and Thando Vilakazi

"In essence, the structural transformation of the South African economy – the key growth-enhancing process of shifting capital and labour toward higher productivity activities and acquiring more sophisticated productive capabilities (McMillan and Headey 2014; Nissanke 2019) –...

has stalled, with several studies suggesting that the country is in a process of “premature deindustrialisation” (Rodrik 2006; Andreoni and Tregenna 2018)" - Nishal Robb and Thando Vilakazi

"The above concerns, alongside the scale and persistence of economic exclusion in South Africa – embodied most clearly in growing inequality and deepening unemployment – suggest the need for a rethinking of several areas of economic and social policy"...

"The effects of the COVID-19 pandemic and associated lockdowns on economies worldwide, with the disruption of global supply chains and the erosion of productive capabilities key among these,..

provide a powerful stimulus for a rethinking of the roles of and relation between industrial policy and competition policy in particular" - Nishal Robb and Thando Vilakazi

These policy areas can act as powerful tools in supporting new entrants and stimulating competitive rivalry in traditionally concentrated economic sectors, and for building capacity for dynamism, innovation & resilience in the economy generally” - Nishal Robb and Thando Vilakazi

The impact of entry on competition in the South African mobile data market: a case study on Rain mobile by Karabo Motaung

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

“Competition in mobile telecommunications markets has become an increasingly important theme as economies strive for more competitive outcomes to maximise the potential for expanded services, lower prices, and increased innovation" - Karabo Motaung

"Over the past 19 years, the effective duopoly in the South African mobile telecommunications market was interrupted by the entry of Cell C in 2001, Telkom in 2010, and Rain Mobile in 2017" - Karabo Motaung

"This research study assessed the impact of entry on the nature of competition in the South African mobile telecommunications market, using Rain Mobile as a case study"-Karabo Motaung

"Using bi-annual data on mobile data headline prices and promotional offerings from 2016 to 2019,...

the study analysed price-based competition by (i) employing a simple price comparison methodology of the 1GB and 5GB data-bundle plans offered by each of Vodacom, MTN, Cell C, Telkom, and Rain Mobile and...

(ii) calculating effective prices using data on promotional offerings and discounts offered by mobile operators on their 1GB and 5GB data-bundle plans in the same period"- Karabo Motaung

"The research study went further to analyse the nature of competition on non-price factors such as coverage, quality, reputation, and brand awareness between the mobile operators"- Karabo Motaung

"While the study found no obvious response from competitors to the entry of Rain Mobile on headline prices, the assessment on promotional offerings demonstrated much more vigorous competition among the operators through lower prices and product variety"...

"The study also found evidence of competition on non-price factors among operators" - Karabo Motaung

"The study found that, although the impact of the entry of Rain Mobile had been effective in inducing ability and willingness among customers to switch and inciting a response from competitors in the form of new product offerings and...

reduced prices to the benefit of consumers, such impact was limited to only a segment of customers and did not reduce overall prices of mobile"- Karabo Motaung

#15AnnualCompetitionConference #EconomicRecovery #EconomicReconstruction #CompetitionPolicy

ACADEMIC SESSION 1 B - The regulation of highly concentrated markets Discussant: Jason Aproskie (Principal Economist, @CompComSA )

Regulating Data Markets through Open Banking: Lessons for South Africa

By Godknows Giya, Salma Kagee and Tankiso Thibane

“This research explored the approaches to Open Banking adopted globally and draw lessons for the implementation of Open Banking in South Africa" -Godknows Giya, Salma Kagee and Tankiso Thibane

"The research is premised on the fact that despite the existence of potential benefits of Open Banking, South Africa is still lagging in terms of Open Banking implementation" - Godknows Giya, Salma Kagee and Tankiso Thibane

"The research largely relied on review of secondary information which include textbooks, journals, unpublished manuscripts, previous studies, legislations, and the Internet"- Godknows Giya, Salma Kagee and Tankiso Thibane

"Considering experiences in other jurisdictions, the research explored whether a market-led, or regulatory-led approach may be adopted in South Africa"- Godknows Giya, Salma Kagee and Tankiso Thibane

"The research also considered competition concerns raised by the entry of Bigtech firms in the financial services markets and how Bigtechs can be treated in the South African context" - Godknows Giya, Salma Kagee and Tankiso Thibane

"The research found that the key pillars that have a bearing on Open Banking implementation include the type of data involved, data ownership, payment for data, opening of APIs and data privacy and security" - Godknows Giya, Salma Kagee and Tankiso Thibane

"As such, for Open Banking implementation to be a success in South Africa regulatory guidance is needed on these aspects" - Godknows Giya, Salma Kagee and Tankiso Thibane

"International experiences show that there is no universal approach adopted in Open Banking with countries adopting either a market-led or regulatory led approach while others transition from market led to regulatory led regimes"- Godknows Giya, Salma Kagee and Tankiso Thibane

"In South Africa, this research observes that due to the economic incentives of banks in a highly concentrated market, a regulatory led approach may be appropriate" - Godknows Giya, Salma Kagee and Tankiso Thibane

"Notwithstanding, this research notes that whichever approach is pursued in South Africa, i.e., whether a market-led, or regulatory-led approach, relevant regulators including the Information Regulator must provide direction on the main pillars of Open Banking"..

"This research has also observed that while not yet an imminent threat, the Open Banking initiative may invite the entry of BigTech firms and not just Fintech start-ups into the financial system" - Godknows Giya, Salma Kagee and Tankiso Thibane

"Given potential systemic risks and potential competition concerns raised by the entry of Bigtechs, a pre-emptive approach must be adopted regarding the involvement of Bigtechs in the South African financial market”- Godknows Giya, Salma Kagee and Tankiso Thibane