Competition Amendment Bill passed: What this means for your business

Members of Parliament in the National Assembly elected to pass the Competition Amendment Bill and refer it to the National Council of Provinces for concurrence during an afternoon plenary on Tuesday.

The Bill seeks to close loopholes in the current Competition Act, and define contraventions and uncompetitive conduct by companies more explicitly.

The amendment Bill also introduces means by which first-time offenders contravening competition laws can be punished.

The debate around the Bill saw lively jostling, including a contentious references to dogs, and an Economic Freedom Fighters member being on the receiving end of “pay back the money” chants.

Among MPs, critics asked whether a government battling controversy over corruption could open markets.

‘Flawed bill, flawed process’

ANC MP and chair of the portfolio committee on economic development Mmathulare Coleman said the Bill would be effective in aligning competition monitoring mechanisms, strengthening authorities, and addressing the impact of anti-competitive conduct on SMEs.

There would be a new test for excessive pricing and benefits from historic state support. The concept of unfair pricing would also be introduced when dealing with suppliers and addressing big firms’ practices when attempting to avoid giving business to smaller, transformed businesses, said Coleman.

However, Democratic Alliance MP and Michael Cordo said the Bill gave authorities too much power and section 18 allowed the president too much freedom to set up a committee on whether mergers or acquisitions met vague national interest requirements.

“This is a flawed Bill from a flawed process that will allow a flawed institution, namely the Competition Commission, to run roughshod over markets.

“Economic inclusion is about broadening the skills base and loosening regulations to create jobs, supporting businesses and paying them on time,” said Cordo.

Howling mad

Cordo’s submission ruffled feathers in the National Assembly when he compared MPs in the economic development committee to lapdogs eager to please the department and President Cyril Ramaphosa.

He said by “rushing” the Bill they had “urinated on Parliament to mollify the executive”.

ANC Chief Whip Jackson Mthembu said comparing MPs to dogs was un-parliamentary and speaker for the session Lechesa Tsenoli urged Cordo to withdraw the remark.

A defiant Cordo withdrew, but immediately slipped in a rider saying “the chief whip’s bark is worse than his bite”. ANC MP and Minister of Small Business Development Lindiwe Zulu insisted that Cordo’s withdrawal must be unconditional.

Regulatory overreach?

Inkatha Freedom Party MP Adriaan Esterhuizen told members that the Competition Amendment Bill was not clear enough on clauses that allowed government intervention when a merger or acquisition had implications for national security.

“The Bill does not specify what constitutes a threat to national security, which can only enhance the political machinations behind any interventions into a merger or acquisition by the government. The rules around this should be clear and fair,” said Esterhuizen.

Minister of economic development Ebrahim Patel said consultation on the Bill was “a thorough and well-balanced process”.

“SMEs are given special status. Larger firms that flout competition rules will face additional scrutiny when they are found to have perpetrated acts like price discrimination,” said Patel.

The national security intervention clause for mergers and acquisitions are quite tepid compared to the same in other countries, Patel said.

The acceptance of the Bill was put to a vote, which led to 83 votes no, 194 votes yes and no abstentions. The Bill will be sent to the National Council of Provinces for concurrence.

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Khulekani Magubane
Khulekani Magubane

Khulekani Magubane is a senior financial reporter for Fin24. 

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