a tripartite report - Unctad

ZAMBIA
agreements, except those agreements that are per
se prohibited. Such applications are considered on
a case by case basis using the rule-of-reason approach.
In that regard, the relevant provisions of
section 19 of the Act provide that the Commission
may, or may not, grant the exemption applied for,
and also that an exemption should be granted if
production or distribution of goods and services,
public which outweighs or would outweigh the
lessening in competition that would result, or is
likely to result, from the agreement”.
It is noteworthy that the exemptions under the
new Act are not automatic, as it was the case under
the old Act. Undertakings seeking to be exempted
from any business practice prohibited under
the Act need to apply to the Commission for
the necessary authorization.
The de minimus129 doctrine is also enshrined in
the Act to ensure that only those anticompetitive
practices that lead to substantial reduction or lessening
of competition are prohibited. For example,
the prohibition of anticompetitive practice, agreement
or decision under section 8 of the Act only
applies to such practices, agreements or decisions
that prevents, restricts or distorts competition “to
an appreciable extent in Zambia”. In the case of
mergers and acquisitions, only those transactions
that are reviewable, that is, that fall within the
of section 26 of the Act, are subject to merger examination
provisions.
The effect of the de minimis rule in the Act is to
exclude most practices of small and medium-sized
enterprises, whose activities generally do not lead
to an appreciable reduction in competition, except
those that are per se prohibited, from the application
of the Act. This is in line with one of the
underlying objectives of competition policy and
law in Zambia, of promoting the competitiveness
of micro and small business enterprises in Zambia.
2.3 Substantive Analysis: Core Issues
Covered by the Act
The core substantive issues covered by the Act are
in Part III (restrictive business and anticompetitive
trade practices, including their authorization), Part
113
IV (mergers), Part V (market inquiries), and Part VII
(consumer protection).
(a) Part III: Restrictive Business and
Anticompetitive Trade Practices
This Part III of the Act deals with anticompetitive
agreements (of both horizontal and vertical nature),
and abuse of dominant position (or monopolization),
as well as with authorizations of restrictive
business practices.
Section 7 in the old Act is now section 8 of the
new Act and provides that “any category of agreement,
decision or concerted practice which has as
its object or effect, the prevention, restriction or
distortion of competition to an appreciable extent
in Zambia is anticompetitive and prohibited”.
The new Act however spells out in more detail the
types and treatment of the anticompetitive practices.
This makes enforcement of the law easier.
Section 9(1) of the Act prohibits per se certain horizontal
agreements130 that involve the hard-core
bid-rigging, as well as production limitation agreements,
and boycotts and joint refusals to deal. The
relevant provisions state that:
“A horizontal agreement between enterprises is
prohibited per se, and void, if the agreement –
price or any other trading conditions;
(b) divides markets by allocating customers, suppliers
(c) involves bid rigging, unless the person requesting
the bid is informed of the terms of the agreement
prior to the making of the bid;
(d) sets production quotas; or
(e) provides for collective refusal to deal in, or supply,
goods or services.”
Stiff penalties for entering into per se prohibited
horizontal agreements are provided for in line with
the seriousness of the offence. Fines of up to 10
per cent of annual turnover can be imposed on
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be imposed. Cartels are considered by many to
be the worst competition offence because of their
harm to competition, and to the economy as a
whole without any redeeming economic features.
Their harsh treatment in the Act is therefore proper
since it discourages such practices and conduct.
ZAMBIA