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ZAMBIA Section 27(1) of the new Act however gives the Commission powers to review mergers that fall below the prescribed threshold if the Commission has reasonable grounds to believe that the merger will raise serious competition and/or public interest concerns, including that the merger: (i) is likely to create a position of dominance in the relevant market; (ii) may substantially prevent or lessen competition; (iii) is concluded outside Zambia and has consequences in Zambia that require further consideration; and (iv) as its result, there is likely to be competition and public interest factors which require to be considered. This is quite in order since competition authorities should retain breaking them up after consummation if necessary or preventing their consummation if it learns cation, if the mergers have serious anticompetitive effects on the relevant markets. While the conditions in section 27(1) of the new Act giving the Commission powers to review mergers that fall below the prescribed threshold that if the merger “is concluded outside Zambia and has consequences in Zambia that require further consideration” and that “as its result, there is likely to be competition and public interest factors which require to be considered” might seem vague, they have relevance to developing countries like Zambia. Zambia has been affected by transnational mergers that had been concluded outside the country’s borders, such as the Cadbury-Schweppes/ Coca-Cola merger and the Rothmans of Pall-Mall/ British American Tobacco merger, which it only managed to minimize their adverse effects on local competition by examining their competitive effects and imposing the necessary conditions on authorising the Zambian subsidiaries of the merging parties to implement the transactions. - Act however provides that “the Minister may, by statutory instrument, on the recommendation of the Commission, make regulations for the better carrying out of the provisions of this Act”, and the Minister in the Regulations to the Act that were gazetted in August 2011 143 accordingly prescribed merging parties’ combined annual turnover or assets in Zambia, whichever is higher. 119 The rather controversial issue of the inclusion of public interest criteria in competition regimes also needs to be looked at from the point of view of developing countries that have a multiplicity of developmental policies to implement. In such a situation, competition policy should not be implemented with blinkers, oblivious of the country’s other socio-economic policies but should support and complement those policies. A competition authority should however not be given wide discretionary powers of deciding what should constitute public interest in the context of considering competition cases. The public interest factors to be considered should be provided for and indicated in the legislation or regulations. For example in South Africa, it is clearly provided for that in investigating and analysing the likely effects of a merger consideration is also made of the likely impact that the transaction would likely have on the following public interest grounds: (i) a particular industrial sector or region; (ii) employment; (iii) the ability of small businesses, or vantaged persons, to become competitive; and (iv) the ability of national industries to compete in international markets. Also in the determination of mergers, public interest factors should not override purely competition factors related to the major substantive test of substantial prevention or lessening of competition in the relevant market. The substantive test in assessing mergers in terms of section 30(1) of the Act is “whether the merger is likely to prevent or substantially lessen competition in a market in Zambia”. In that assessment, section 30(2) provides for a number of factors that the Commission must take into account, as follows: “(a) the levels of concentration of players in the relevant market; (b) the creation or strengthening of barriers to market entry; (c) the level of imports in the relevant market; (d) the extent to which there is countervailing buyer or supplier power in the relevant market; (e) the availability of substitute products in the relevant market; (f) the likelihood of the merger removing from the market an existing effective and vigorous competitor; (g) the dynamic characteristics of the market including growth, innovation, pricing and other inherent market characteristics; and (h) the risk that a position of dominance may be abused”. ZAMBIA
120 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE The above is a great improvement in the new Act since the old Act did not give guidance to the Commission on factors to be taken into account in assessing mergers. The merger assessment guiding factors not only make the examination of mergers transparent, but also ensure that the Commission’s examination of mergers stands the rigours of legal scrutiny in law courts. The taking into account of public interest factors in the assessment of mergers has also been provided for in the Act. This is in line with practices in several developing countries. The old Act did not provide for public interest assessment of mergers, and only provided for the considera- The Commission nevertheless considered public interest issues in reviewing mergers because of the need to ensure coherence of competition policy with the government’s other policies of a socio-economic nature. The new Act therefore gives legitimacy to the consideration of such issues in merger review. Public interest assessment of mergers is provided for in terms of section 31 of the Act as follows: “The Commission may, in considering a proposed merger, take into account any factor which bears upon the public interest in the proposed merger, including – (a) the extent to which the proposed merger is likely outweigh any detriment attributable to a substantial lessening of competition; (b) the extent to which the proposed merger would, or is likely to, promote technical or economic progress and the transfer to skills, or otherwise improve the production or distribution of goods or the provision of services in Zambia; (d) the extent to which the proposed merger shall maintain or promote exports from Zambia or employment in Zambia; (e) the extent to which the proposed merger may enhance the competitiveness, or advance or protect the interests of micro and small business enterprises in Zambia; (f) the extent to which the proposed merger may affect the ability of national industries to compete in international markets; (g) socioeconomic factors as may be appropriate; and (h) any other factor that bears upon the public interest.” While the taking into account of public interest factors in the assessment of mergers is in line with practices in several developing countries, a competition authority should however not be given wide discretionary powers of deciding what should constitute public interest in the context of considering competition cases since it normally does not have the capability of doing so. In the case of section 31 of the new Act in Zambia, it is noted that (g) and (h), “socioeconomic factors as may be appropriate” and “any other factors that bears upon the public interest” respectively, give the Commission such wide discretionary powers. It is recommended that section 31 of the Competition and Consumer Protection Act, 2010 be amended by the deletion of (g) and (h) that give the Commission wide discretionary powers of deciding what constitutes public interest in the consideration of mergers. favour of mergers has been included as one of the public interest factors to be taken into account in the assessment of mergers. The saving of a failing tion promotion feature in the avoidance of market exits that increase market concentration. It also has direct public interest features, as recognized in the Act, that relate to the need to retain employment, ensure the continued availability of goods and services, and the continuation of taxation mestic and international markets has also been recognized as one of the public interest factors to be taken into account in the assessment of mergers, and this shows the realization of the interface between the country’s trade policy and competition policy. The Act introduces under section 32(1) the period allowed for merger assessment. It is provided that “the Commission shall complete its assessment of a proposed merger and issue its determination within a period of ninety days from the date of the application for authorization of the proposed merger …”. The merger assessment period is however subject to parties to proposed
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UNITED NATIONS CONFERENCE ON TRADE
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UNITUNITED NATIONS CONFERENCE ON TR
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2 VOLUNTARY PEER REVIEW OF CLP: A T
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COMPARATIVE ASSESMENT COMPARATIVE A
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PREFACE This comparative assessment
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PREFACE agreements. . In the United
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PREFACE Finally in the United Repub
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PREFACE be set at a percentage of t
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PREFACE the market price but constr
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PREFACE (d) the extent to which the
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PREFACE pendence is maintained and
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PREFACE the effectiveness of the or
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PREFACE practical solutions, for ex
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ZIMBABWE FULL REPORT ZIMBABWE
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ZIMBABWE TABLE OF CONTENTS PREFACE
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ZIMBABWE This report is part of the
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ZIMBABWE With the growing political
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ZIMBABWE of restrictive practices,
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ZIMBABWE competition authorities do
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ZIMBABWE divided according to geogr
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ZIMBABWE The Commission in 2006 whi
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ZIMBABWE to take care of themselves
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ZIMBABWE (under Section 9); basical
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ZIMBABWE Full scale investigation i
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ZIMBABWE (ii) to produce any book,
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ZIMBABWE The fact that CTC has a co
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ZIMBABWE tariat of technocrats, who
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ZIMBABWE Table 2: Number of Competi
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ZIMBABWE Regarding the handling of
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ZIMBABWE (Emphasis by the author) b
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ZIMBABWE Section 5 (1) (f) that pro
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ZIMBABWE Whilst the arguments can b
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ZIMBABWE Anti competitive agreement
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ZIMBABWE by conducting its case det
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