Balancing Act
Proposed amendments to competition legislation will, among other things, promote a greater spread of company ownership in the economy Structured competitiveness and a level playing field are the basis of any effective economic system. Incisive potential changes to the country’s competition and anti-trust laws – currently before Parliament – seek to improve conditions for a more equitable market.
Khumisi Kganare, founder and director of Kganare Khumalo Incorporated, notes that SA competition law differs from international systems as it focuses not only on competition issues, but also on certain public interest and social goals, such as the promotion of small businesses, the interests of employees and BEE. It is indisputable therefore that the goal is to enable the competition authorities to take steps aimed at ending the exclusion of the majority of South Africans from owning a stake in the economy, he says. ‘The letter and the spirit of the Competition Amendment Bill of 2017 seem completely aligned on the issue of transformation.
‘The proposed amendments generally strengthen provisions of the Competition Act of 1998 relating to collusion, abuse of dominance, price discrimination, merger control, exemptions from prohibited practices and market inquiries.’ Kganare says concentrated markets that inhibit new entrants and, accordingly, exclude large numbers of black South Africans from the opportunity to run successful enterprises, are not a basis for strong and sustained growth. They continue to limit the talent pool of entrepreneurs on which the growth potential of the economy relies. An inclusive growth path requires that these barriers to entry are addressed with great effectiveness and efficiency.
‘Some of the important objectives of the act are to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the economy; and to promote a greater spread of ownership, in particular to increase the ownership stakes of historically disadvantaged persons. The bill recognises that at the same time as tackling economic concentration, it is imperative to address the persistently racially skewed profile of ownership of the economy, [and] that instruments and mechanisms addressing economic transformation must ensure inclusive and meaningful change and avoid being superficial so as to circumvent undesirable practices, like fronting.’
