a tripartite report - Unctad

ZAMBIA
of just to a “narrow concept of economic
several occasions taken into account public
interest arguments, it was doubtful whether
there were any legal bases.
Explicit Exclusions: it was noted that one
of the exclusions from the application of
the Act of activities or agreements to which
the Government is a party, had the effect
of making the whole privatization of State
enterprises process not subject to the
country’s competition law since in all, or most
of the sale agreements under the privatization
programme, the State through the Ministry of
Finance and National Planning was the other
party as the State enterprises were majority
owned by the Government.
(ii) Substantive provisions of the Competition and
Fair Trading Act, 1994
Mergers: it was noted that the term ‘merger’
Commission viewed a ‘merger situation’ to
be very wide and covered several different
kinds of transactions and arrangements. The
Commission had also on several instances
been challenged on the need to notify a
merger. The argument was that the Act did not
compel parties to a merger to notify where
they thought that there was no likelihood to
breach section 7 of the Act. There were also
no provisions in the Act which empowered
the Commission to request parties to notify
the Commission that the proposed merger
was likely to substantially prevent or lessen
competition.
Interpretation and Treatment of ‘Concerted
Practice’ and Vertical Restraints: it was
noted that the prohibition under section 7
of the Act applied to concerted practices as
well as to agreements, when the boundary
between the two concepts is imprecise. The
key difference was that a concerted practice
may exist where there is informal cooperation
without any formal agreement or decision.
In considering if a concerted practice exists,
an economic assessment of the relevant
market would need to be made, as well as
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the establishment of the following two main
elements: (i) the existence of positive contacts
between the parties; and (ii) the contact has
the object or effect of changing the market
behaviour of the undertakings in a way which
may not be dictated by market forces. A
problem with the wording of section 7(1) of
the Act was therefore foreseen, since it would
the prohibited objective. It was also noted that
the provisions in the Act on vertical restraints
are illustrative only, and that there may be
many other types of vertical agreements that
would fall within the provision. Equally, some
types of agreements listed may not fall within
the prohibition in the particular circumstances
of the case. The crucial factor should be
whether the agreement has the object or
effect of preventing, restricting or distorting
competition.
Absence of a Leniency Programme: the
absence of provisions in the Act providing for
leniency programmes was a major drawback
in the effective implementation of competition
policy and law in Zambia. In that regard, it
was noted that even though Act out-rightly
prohibited cartels, which are considered by
many to be the worst competition law offence,
anti-cartel enforcement had been weak since
absence of a member of the cartel providing
information on the cartel activities.
(iii) Procedural aspects of the Competition and
Fair Trading Act, 1994, including enforcement
powers of the Commission
Timetable for Decisions on Authorizations: it
was noted that the Act did not provide for or
stipulated time limits in which the Commission
was required to carry out its work, particularly
in authorizing mergers. The Commission
recognized that the business community is
anxious to avoid delay in obtaining regulatory
approval for planned mergers or takeovers
since such delays can mean a loss of business
opportunity.
Limited Investigative Powers: the Commission
did not have administrative powers to
summon a suspect to assist in investigations,
making the system voluntary. In that regard, it
ZAMBIA