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When is competition law disruptive and when is it supportive of business growth?

When is competition law disruptive and when is it supportive of business growth?

South African Judge President of the Competition Appeal Court, recently told a Windhoek audience that the Competition Act is ambitious, referring to the fact that it goes beyond traditional competition laws.

“The Competition Laws in Namibia and South Africa are ambitious. These Acts state that we do need an intervention but has also lifted its gaze and pointed to other serious structural issues owed to previous colonial rule that need to be addressed. If we wanted a standard Act where the market self-corrects, we would only have the basic issues outlined e.g. fair prices, but our Acts are also concerned with issues of equity,” he said.

The novelty of competition legislation in the Namibian market brings with it various challenges while navigating the legal waters and the implications it has on enterprise.

The Chief Executive of Standard Bank, Vetumbuavi Mungunda reiterated this view saying the design, application and interpretation of Competition Law needs ongoing discussion as it is fairly young.

“Competition in business is required to drive fairness, efficiencies as well as transparent, sustainable economic growth which would benefit the population. At the same time, consolidations, mergers, joint-ventures, cooperative arrangements in businesses are imperative and at times the only tool available to drive growth and rescue struggling businesses especially during difficult and recessionary times as these we are experiencing in the last two years,” Mungunda said.

He also pointed out that regardless of the country’s population and industries, local companies are also expected to compete against global companies.

Judge Davis stated that Competition Law has become cutting edge legislation dealing mostly with the way economic power is skewed. Acknowledging that outcomes are not always guaranteed, he said the basic premise for any Competition Law should be normative, driving the way businesses should conduct themselves in the market place. He noted that this is not a uniquely Namibian or South African requisite but that Competition Law is founded on a worldwide recognition of the principles of fairness, transparency and healthy competition.

Judge Davis said in some countries, cartels abuse their market dominance, but in a more local context, he sees this also happening where established companies actively prevent the entry of black-owned enterprises exploiting the lacunae in competition legislation. Pointing out an obvious shortcoming, he said “Namibia’s Act does not deal with that issue.”

“Namibia’s Act leaves everything to the Competition Commission; however South Africa has a competition tribunal that hears competition cases subject to adjudication. If we are trying to balance public interest and efficiency, and have concerns on structure and not just behaviour then we need a body for that. This body should be a specialist tribunal dealing with matters of Competition Law that has an understanding of economics as well as economic concepts,” he said emphasising that certain decisions on competition legislation should vest in a tribunal rather than a ministry.

“We need to promote an economy in a market that is inclusive and does not only benefit some but all,” he concluded.


 

 

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