1. Competition Commission Meeting Our Objectives
Presentation to Portfolio Committees
Cape Town
13 June 2001
ADV. MENZI SIMELANE

2. Objectives To provide An overview of our achievements to date
Economic information

3. Background
Commission became operational on 1 September 1999 – 20 months old
The Competition Act has been amended twice
Most recent amendment became effective 1 February 2001
Thresholds increased dramatically, reducing merger workload by 60%
Jurisdiction became concurrent with other regulators – has increased merger & investigation activity

4. Meeting Our Objectives Objectives of the Act
To promote efficiency, adaptability and development of the economy
To provide consumers with competitive prices and product choices
To promote employment and advance social and economic welfare of South Africa
To expand opportunities for South African participation in world markets and recognise the role of foreign competition in the Republic
To ensure that SME’s have an equitable opportunity to participate in the economy
To promote a greater spread of ownership, in particular to increase the ownership stakes of historically disadvantaged

5. Meeting Our Objectives Our Activities
Merger evaluations
Investigations into prohibited practices
Exemption evaluations
Advisory opinions
Education & Information
Policy & research (non-case)
Legislative reviews

6. Meeting Our Objectives Mergers
1999/2000
2000/2001
Total
No of cases notified
Intermediate
Small
Large
Transitional
331 20
175
136
407 19
337 21
738 39 51
No of cases finalised
236 12 91
133
414 24
387 3
650 36
478
No of cases prohibited
5 (2.1%) 1
6 (1.4%)
11 (1.7%) 4

7. Meeting Our Objectives Mergers
Type of merger
No of mergers
Percent
Purely Horizontal
178
62%
Purely Vertical 25 9%
Conglomerate 63
22%
Management Buy-out 6 2%
Horizontal/vertical mix 13 5%
Total
285
100%
Acquisition by a foreign firm 55
19%
Failing firm argument
Anticipated job losses 19 6%
Sample of mergers between April - December 2000

8. Meeting Our Objectives Mergers
Sector
% of Total (9/99-3/00)
% of Total (4/00 – 2/01)
Mining and Construction 6% 4%
Financial Services
13%
ICT1
14%
11%
Transport
10%
Manufacturing
22%
33%
Services
Real Estate 8%
Wholesale -
12%
Retail
Other 3
18% 5%
TOTAL
100%

9. Meeting Our Objectives Investigations
Type of Complaint
No of Complaints
Received
No of Complaints Resolved
Horizontal (Collusion) 13 10
Vertical 8 5
Abuse of Dominance 67 46
Multiple Provisions 64 36
No jurisdiction 26
TOTAL
176
123

10. Meeting Our Objectives Investigations
Sectoral Distribution (cases under investigations
Agriculture 6%
Services
10%
Manufacturing
25%
Wholesale
15%
Retail
17%
Sale, repair & maintenance of motor vehicles 2%
Transport
Medical Schemes

11. Meeting Our Objectives Investigations
Sectoral distribution (resolved cases)
Forestry 1%
Manufacturing
24%
Wholesale 6%
Retail
19%
Transport
Services
16%
Medical aid Schemes
Agriculture
Telecommunications 2%
Real Estate
Insurance 3%
Mining IT 9%

12. Meeting Our Objectives Exemptions
9 applications (4/2000 – 3/2001)
3 pharmaceutical manufacturing
2 healthcare services
4 manufacture of transport equipment, cement products, liquid fuels and shipping lines
All relating to restrictive horizontal practices

13. Efficiency Cost per Output
Merger Evaluations
Investigations
Exemptions Evaluations
Advisory Opinions
Total Cost R R R R
Outputs
419 mergers
27complaints
7 exemptions
132 advisory opinions
Cost per output
R26 664
R65 342 R
R10 701

14. Efficiency Turnaround Time
Case Type
Av Turnaround Time
Mergers
31 days
Complaints
91 days
Exemptions
145 days
Advisory Opinions
25 days

15. Interesting Information Ownership Concentration
Company
Number of ownership interest out of 59 sample sectors
Percentage ownership control
Anglo -American 21
35%
Sanlam 13
22%
Old Mutual 12
20%
Rembrandt 11
18%
Sasol 5 8%
Unilever 4 6%
Tiger Brands 3 5%
Parmalat
Ellerine Holding 2 3%

16. Interesting Information Problem Sectors

17. Interesting Information Mergers & Employment
In 125 cases evaluated a net loss employment of 197 jobs occurred
Industries with combined market share of 60%-100% resulted to 77% of the above job losses
Competitive industry with low levels of concentration resulted to only 18% of the above job losses
Concentrated industries at Cr4 above 60% & competitive industries at Cr4 below 40% resulted to 4 times more job losses
100% employment gains were within Cr4 in the ranges of 20% to 60%

18. Questions & Clarification

19. How to contact us Website: www.compcom.co.za
Tel: (012)
Fax: (012)