1. Comments on the Competition Amendment Bill
Presentation to the Portfolio Committee
on Trade and Industry
Cas Coovadia
The Banking Association of South Africa

2. Introduction
Banking Industry welcomes efforts to strengthen competition regime – beneficial to the SA economy
Concerns about amendment not about principle of strengthening competition, but rather approach and content
Proposed amendments were rushed consequently NO consultation, resulting in amendments that have not been, with respect, thoroughly considered.

3. Introduction Recent track record of Competition Commission
Banking enquiry
Steel cartel case
Bread cartel case …..
Competition authorities highly effective in detecting, investigating and prosecuting anti-competitive activities and exploring new instruments i.e. market inquiries
We suggest the Competition Commission is beginning to exercise effectively the tools at its disposal and will continue to do so. We believe it is thus unnecessary to introduce additional sanctions, which could have the effect of delaying efficient processes and actions being currently adopted.

4. Overview of BASA Comments
Policy problem
Proposed solution
BASA support
Inherited monopolies and complex monopolies
Market inquiry provisions
Complex monopoly provisions ✔ ✗
Cartel enforcement
Legal certainty around corporate leniency
Criminal sanctions and director liability
Inordinate emphasis on merger activity
Reduce thresholds (not in amendments)
Concurrent jurisdiction
Amendments to expand powers of competition authorities
Anti-competitive legislation
Competition authorities should be consulted – but no amendments proposed
Capacity of other institutions
Capacity of Commission to be addressed – but no proposals

5. Complex monopolies No evidence of complex monopolies in economy;
Market inquiries are most appropriate tool for investigating sectors where the outcome is anti-competitive, even though the actions may not constitute contraventions;
Current provisions extremely wide – they will capture almost all sectors of economy and prohibited actions appear to be deliberately broad, thus indicating a lack of consideration towards a more targeted approach. The Competition Commission is showing success, recently, in a more targeted approach.
No basis for the proposed amendments and they are badly phrased – recommend deletion of section 10A

6. Market inquiries
Supportive of principle BUT believe some changes required:
There should be a clearer basis for the initiation of a market inquiry
Inquiry should be limited to published Terms of Reference (TOR) – changes to TOR should be published
Report should be published and comments should be invited (should be a legal requirement)
Need for the publication of rules and procedures for market inquiries

7. Criminal sanction and director’s liability
Need for criminal sanction questionable, given positive track record of Competition authorities;
Criminal sanctions will be difficult to enforce, given challenges of judicial system and courts;
IF provisions are to be retained, need for changes:
Burden of proof for criminal sanctions is higher – principle should be continued – cannot apply lower standard of administrative procedure to criminal cases;
If consent orders can be used to prosecute individual directors, it will have negative impact on consent orders
We remain convinced the increasingly successful results being obtained by the Competition Commission, without imposition of criminal sanctions, negates any need for such sanctions. Instead, imposition of criminal sanctions could result in impediments to a process that is proving to be effective.

8. Conclusion To reiterate:
The Competition authorities are much more effective than presented;
Authorities are starting to use instruments
A few of the proposals are unwarranted, excessive and too discretionary
The Banking Association SA supports strengthening competition regime, but instruments should be carefully targeted.