Legal experts have raised concerns surrounding the recently published Competition Amendment Bill, with some warning that some of the changes proposed by the Bill could have serious repercussions for businesses around the country.
The draft bill is aimed at addressing the racially-skewed spread of business ownership in South Africa by making it easier for black-owned businesses to enter the market and by advancing transformation of current business.
This will be done by breaking up current cartels (thereby encouraging new businesses into the arena) as well as punishing firms that don’t meet these new objectives. In effect, this means that the Competition Commission must also consider public interest issues (such as race) when considering business practices.
However there is currently an “extreme apathy” from business towards the Bill, said Ros Lake, a top competition lawyer who represents some of the largest companies in South Africa at legal firm Norton Rose Fulbright.
This is disconcerting as the Bill holds far-reaching implications for South African businesses, given the expanded powers proposed to enable the competition authorities to intervene in markets and commercial transactions, she said.
“Perhaps they have not thought through the impact of the changes, but people need to comment and they need to get on board, if we don’t there is a real risk that these changes will be railroaded and we just won’t have certainty. We will spend years in litigation trying to figure out what the Act actually means.”
“Some of the provisions are hard to understand and many of the intentions haven’t been carried through. These things have to be corrected. Some of the provisions are just too drastic and inconsistent with economic policy. We have to develop policies that work for South Africa, but they have work and be workable,” she said.
“The compliance cost for companies is going to be extraordinary,” she said.
“Sections that are untested now carry a first-time penalty and there are a number of tweaks required.”