South Africa Law Update
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Major Changes Proposed to the Competition Act 1988 in South Africa

The Minister of Economic Development of South Africa, Ebrahim Patel published the long-awaited Competition Amendment Bill (the Draft Bill), 2017 for public comments on 1 December 2017. The Competition Authorities are not able to address the issues created by the large number of highly concentrated markets in South Africa as per the current provisions of the Competition Act 1998.

The Draft Bill focuses on scrutiny of market concentration and seeks to empower the Competition Authorities to increase more opportunities for advancing transformation of ownership of the South African economy.

The changes proposed will have a significant impact on all businesses operating in South Africa and will enhance the complexity associated with complying with the Competition Act. If the proposed amendments in the Competition Bill are implemented, it will be beneficial to radically change the prohibited practices and in investigation and prosecution by the Competition Authorities in case of mergers.

The most significant amendments proposed in Competition Amendment Bill include:

  • The Draft Bill proposes to boost the market inquiry process to allow the Competition Commission to consider features of markets, including high levels of concentration and limited economic transformation and take any curative action that is rational and practicable to deal with such features of a market that prevent, restrict or distort competition;
  • The Draft Bill includes provisions for expanding the consideration of cross-shareholdings, cross-directorships and the phenomenon of creeping concentration in merger control proceedings;
  • The Draft Bill contains provisions for ensuring scrutiny of the impact of mergers on the spread of ownership in the economy as a public interest issue. A new section in the draft is introduced which allows the Commission to analyze transactions occurring within a three-year period that result in a change of control, or which are steps towards a change of control, as if they occurred simultaneously. This is aimed at ensuring that the creeping acquisition of control is subject to the appropriate scrutiny and analysis by the Competition Authorities.
  • The Draft Bill makes important amendments to provisions of the Act relating to the abuse of dominance. These amendments primarily focus on correcting the difficulties faced by Competition Authorities enforcing abuse of dominance complaints.
  • The Draft Bill provides for restrictions on dominant firms and their suppliers not to engage in anticompetitive price discrimination in relation to its customers.
  • The Draft Bill introduces major amendments relating to the market inquiry provisions which envisage that market inquiries for analyzing and tackling the structural problems in a market.
  • The Bill also deals with various institutional and procedural processes that aim to boost the efficiency and effectiveness of the competition authorities.
  • Earlier the provisions of the Competition Act did not provided for penalty for a first time contravention. But all the contraventions under the proposed amendments will now carry a penalty for a first time contravention.

The comments from the public are due on the Draft Bill by 29 January 2018. After the inputs are received from the public, the same shall be considered before a final Bill is approved by Cabinet for presentation and submission to Parliament for consideration, debate and adoption. The Bill approved by the Cabinet will have significant impact on business economy of South Africa.

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Amendments Made in the Alternative Dispute Resolution Regulations in the Electronic and Transactions Act 2002 in South Africa

The Minister of Telecommunications and Postal Services of South Africa, Dr Siyabonga Cyprian Cwele on 10 November 2017, officially amended the Regulations in respect of Alternative Dispute Resolution (ADR) in the Electronic Communications and Transactions Act 2002. These amendments have been significantly influenced by the United Kingdom Dispute Resolution System (UK DRS). Following are some of the important amendments:

  • Mandatory informal mediation to be run by the government domain name authority ZADNA is introduced under the amended regulations. If settlement between the parties is reached, no complaint fees shall be payable;
  • Earlier rebuttable the Act included the provision of presumption of an abusive registration if the registrant has been found to have made an abusive registration in three or more disputes in the previous 12 months. Under the amendment of Regulations this time of previous 12 months has now been extended to the previous two years;
  • The ambit of decisions that an adjudicator can reach have been expanded to include cancellation of the disputed domain name.
  • The new amendments in the Act provides for a penalty for reverse domain name hijacking has been provided. If three disputes by the same complainant have been refused within a period of two years on the basis of reverse domain name hijacking, the provider will not accept any further complaints from that complainant for a period of two years except on good cause shown;
  • Now under the amended Act period of four days after receipt of a decision has been provided in which a statement of intention to appeal can be filed.

Refer the below link for detailed news: click here.

6 December 2017
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