Merger regulations level economic playing field

A fair market is not only good for growth and for investment but also for consumers

- SIYABULELA MAKUNGA

BALANCING the Competition Commission's mandate to safeguard competition whilst fostering a growing and deconcentrated economy is no small task.

This is partly because, as alluded in our concentration tracker report, persistent concentration by historically dominant firms is also associated with a lack of transformation of the economy, denying opportunities to those that were historically excluded to participate and grow their share of economic value.

A dynamic, growing economy requires markets that are contestable and that reward innovation, ideas and responsiveness to the needs and wants of consumers.

Regulating mergers and acquisitions (M&A) forms an important part of the work that we do to contribute towards a growing and de-concentrated economy for the country. At times narratives in the media present skewed criticism of the Commission's merger regulation processes asserting that it creates uncertainty for investors.

Understandably, predictability may well be an important factor for investors, and the Commission has been consistent in its transparency and accountability by, among other things, publishing guidelines and communicating its decisions on all cases.

We do so in line with the provisions of the Competition Act (89 of 1998) as amended, which provides a clear structure of the factors that will be considered in conducting both the competition and public interest assessment in an M&A transaction and sets firm timelines (a maximum of 60 days) for the assessment of intermediate mergers.

The Commission takes this even further by committing itself to service standards for large mergers where no firm deadline is set in the Act. It bears emphasis that the Commission regularly concludes reviews at a much faster rate than its published service standards: 1) Phase I (less complex) merger reviews, took an average of 18 days to conclude in 2019.