Competition regulation is essential for inclusive growth

“Economist Dawie Roodt says Competition Commission must be closed in South Africa” – MyBroadband. This was the heading of an article published on 12 October 2025.

We occasionally hear such critiques that competition enforcement stifles growth and deters investment. To be clear, we welcome this debate. We should never take for granted that not everyone understands the importance of competition and inclusion. Unlike Dawie Roodt, extensively cited in the article we mentioned, we respect South Africa’s economic institutions, such as the Competition Commission and Tribunal and their remarkable accomplishments.  

It has been more than 25 years since the competition project; South Africa has built a strong and admirable competition law and institutions.  Enforcement of this law has significantly contributed to bringing better and more affordable goods and services to the people, creating an environment that encourages economic participation by all South Africans and increasing the competitiveness of South African businesses.   

Markets have evolved with new theories of harm, precedents and guidance. Major competition cases have come and gone, changing the way we think about and approach making markets work for all. To put this in some context, in 1998, the year the Competition Act was passed, Takealot, Uber, Facebook, Twitter and YouTube had yet to launch. And, like us, you did not even have a personal mobile phone. 

In a way, Roodt’s cited remarks provide us with an opportunity to reflect on what the Competition Commission has achieved over the years.

Going back to the beginning also means returning to first principles, considering the purpose of competition policy in South Africa.  From day one, democratic South Africa recognised that there is a natural fit between pursuing both equity and efficiency. Until the left-out majority of South Africans are meaningfully integrated into the economic mainstream, the economy cannot begin to realise its potential for efficiency. 

At its heart, the Competition Commission’s role is to support inclusiveness and sustainable economic growth.

This means deliberately not leaning towards the freedom for incumbents. The Competition Commission’s work in supporting inclusion and efficiency is a sound route towards competitive markets that work for all.  An economy that works for everyone provides a stable and predictable environment for businesses, creates fertile conditions for new competitors, black-owned firms and industries to grow and makes a tangible difference in the lives and work of businesses, investors, consumers and workers.

The Competition Commission’s work goes to the core of these ambitions, as reflected in numerous past decisions. To name just a few, consider cartel cases such as the maize meal, bread and flour cartels or competition settlements that changed the pricing and licensing of HIV medicines, which helped society by lowering the prices of essential necessities. 

Other interventions, such as the COVID-19 price gouging cases, were crucial in protecting vulnerable consumers and rebuilding public trust in markets. Through its inquiries, the Competition Commission continues to play a pivotal role as an informed, expert and constructive adviser to the government on making markets work for all.

In ensuring that markets remain open for all, the Competition Commission’s work cultivates the right conditions for new and growing businesses, including black-owned businesses to thrive. The creation of such conditions depends, among other things, on a predictable, active and effective competition regime.

A critical feature underpinning the evidence-based, objective and independent approach of the Competition Commission is the judicial oversight of its work. The Competition Commission’s decisions are regularly reviewed in open court at the Competition Tribunal, and the Competition Tribunal’s decisions are reviewed at the Competition Appeal Court. This crucial piece of institutional design has earned South African competition institutions, including the Competition Commission, a strong reputation for high-quality independent decision-making.

The value of competitive markets is supported by a substantial body of empirical evidence, which demonstrates that competition can drive economic growth and enhance productivity. Philippe Aghion, one of the three people awarded a Nobel Prize in economics this year, has previously argued that increased competition could boost productivity growth in South Africa by 2–2.5 percentage points per year.

There will, understandably, always be those for whom the pursuit of greater equality and inclusion through competition law represents a serious threat to their incumbency advantages, power and grandfather privilege. This is because such a pursuit provides opportunities for all South Africans to enter markets and grow on their merits. However, if markets are clogged by power and privilege and if the firms with power exclude rivals, SMEs and black-owned businesses from participating in marketplaces, while that is bad for all consumers and workers, it disproportionately harms low-income consumers and workers, who in turn are disproportionately black people. 

Roodt is quoted as having said that “The only way that you can get a more competitive environment is to remove obstacles to doing business, and then the private sector will compete naturally”. The proposition is that if we remove obstacles to doing business, markets will become more competitive. This is a rather naive argument. Even if there are no obstacles to doing business, markets may not work for all people due to externalities (both direct and indirect), vested interests, the entrenchment of corruption and cronyism, switching costs and strategic behaviour by dominant firms, among other reasons.

While the market encourages enterprise and efficiency, creating a wider choice for consumers and helping to reduce prices and improve quality, the problem is that it lacks clear rules of the road, which means it does not serve the needs of all South Africans, including consumers and workers. Enter the Competition Commission. The primary role of the Competition Commission as an authority is to promote competition and inclusion in markets, ensuring that these markets operate in the best interest of consumers, workers, businesses, and ultimately benefit all South Africans.

Roodt is cited as having said that the Competition Commission is stifling growth, and it should be closed so that South Africa can transition towards a purely market-led economy. Roodt does not offer any robust evidence of this stifling growth effect. Roodt justifies his proposition by stating that economic policymakers should rather focus on removing restrictive labour laws, addressing poor service delivery and improving what he describes as a “dangerous policy environment”. On businesses colluding, Roodt is quoted as having said: “Let them work together if they want to, let them charge exorbitant prices for stuff”, and “the more money they make, the more they will create an environment where more players want to participate in this money-making.” 

This is good for the economy.

But we know and have seen what happens when competition is absent. Markets characterised by high concentration, or even monopolies, lead to higher prices, lower quality and stymied innovation.

First, Roodt ignores the fact that South Africa has an excessive market power problem. The cartel cases brought by the Competition Commission across all sectors of the economy over the years highlight this problem. Excessive market power is associated with high costs of goods and services for consumers, reduced wages for workers and hinders innovation and economic progress. Worse still, the poor, powerless and disadvantaged in society who are majority black South Africans are more likely to be the victims of excessive market power and have the least ability to avoid its consequences.

Second, Roodt appears to be unaware that anti-competitive agreements between competitors may be eligible for exemption. An exemption may be granted if the agreement between competitors, for example, promotes exports or enhances the ability of SMEs and black-owned businesses to enter and participate in the market, among other benefits. So, competition law already provides a framework to balance broad industrial strategies with competition law enforcement in a predictable and transparent way. Agreements between competitors that are efficient and improve competitiveness are usually also pro-competitive. Agreements that are anti-competitive are almost always harmful and should not be allowed unless a clear case is made of a higher public benefit that could not otherwise be achieved. 

So, 25 years on, there is much work for the Competition Commission to do.  Each critique should deepen its resolve to make markets work for all South Africans. We know that when competition is weak, the real cost of that is borne by all of us in the form of higher prices, lower quality, reduced choice and poor incentives for companies to treat customers and workers fairly. And too often those who can afford it the least are hit the hardest: vulnerable customers and those struggling with the cost of living, who are less likely to switch to another deal.

• Busani Ngcaweni, University of Johannesburg
• Khwezi Mabasa, Wits University
• Liberty Mncube, Wits University