a tripartite report - Unctad

a tripartite report - Unctad a tripartite report - Unctad

01.06.2013 Views

PREFACE agreements. . In the United Republic of Tanzania, there is no market share threshold and parties can voluntarily notify any agreement that they believe deserves an exemption. The standard for an exemption is very similar in the two jurisdictions and the negative effects associated with the restrictions of competition. In both jurisdictions the law requires that in order to grant an exemption there - effective way to promote compliance with an antitrust law, since the most identify serious restrictions - ject to an authorization system, notify only agreements that they believe can be exempted. Serious just overburden competition authorities with paper work, but do not result in an improvement of the competitive environment. - ated to a fee) and in that case the role that it plays tions increase too much, the Authorities may need to issue block exemption regulations that would of what happened in the European Union before would make any attempt of rationalization impossible (unless funds are guaranteed to the Authority by some other source). The individual country reports for the United Republic of Tanzania and Zambia do not contain recommendations that the substantive parts of their laws be changed. There are however some suggestions for revising the text of the Legislation on some procedural issues (for example the threshold for not restrictiveness of vertical agreements in Zambia) but these suggestions can be implemented through case law developments and through informed on what is prohibited. This is the case of vertical agreements and horizontal cooperation agreements in the area of technology transfers and R&D. A similar effort could be undertaken for abuse of dominance type violations. The regional groupings, to which the three jurisdictions belong, could help in the issuing of these guidelines, providing reference documents that individual jurisdictions could then use domestically. What is any case very important is that decisions by the authorities be motivated and published by making them available on the website of the authorities. With legal provisions of a general type decisions serve an educational purpose and should be made available to everybody, so as to enhance legal certainty. Also the judiciary should have the same type of obligations and judgments in competition cases should be made easily available, possibly on the website of the authorities. 2. The investigative powers of competition authorities The major problem in antitrust cases is that the evidence that needs to be collected to prove a violation is not freely available in the market nor in the information set of possible complainants. For example in a predatory pricing case, the excluded competitor would not have any information on the actual level of costs of the dominant company to be used as a benchmark to which to compare the dominant company supposedly predatory prices. Similarly in a cartel case, a customer of the cartel would not have information on how the cartel operates or, even more importantly, on whether the cartel actually exists. As for the Authority role, simply asking those that might have committed a violation to provide the necessary evidence would not provide some information can be effective only if - will not respond or will not say the truth. This is why, interest in providing the necessary information for the Authority to issue a quick decision, competition authorities need strong investigative powers in order to be able to gather the necessary evidence. In all three jurisdictions the Authority can open an own motion enquiry, act on complaints, require a person to submit information, to produce a document or to appear in person. 9 COMPARATIVE ASSESMENT

10 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE The investigative powers of the Authorities of the three jurisdictions are not limited to requiring information from the parties, but, where the Authority has reason to believe that a person is in possession or control of any documents that may assist it in an investigation, the Authority may, under a preliminary approval by a Tribunal, enter premises to conduct a search and make copies or take extracts of documents therein. Among the three jurisdictions, only Zambia has started to gain experience with dawn raids, having conducted two of such raids in recent years. All three authorities would need specialized training for conducting effective searches. While requiring a preliminary approval by a Tribunal may be necessary when private houses are being entered into (to protect the fundamental rights of citizens to their privacy), the issue is less relevant with respect to corporate buildings. In such cases the inspection could well be decided by the Authority itself (like in Italy for example) without the need of any approval by a tribunal and subject only to judicial review (which of course implies the need to motivate the reason for the inspection). This would make the power to inspect much more As for Zimbabwe, full investigative powers can be used by the Authority only once a notice is published in the Government Gazette and in national newspapers circulating in the area covered by the investigation, stating the nature of the proposed Gazette may be necessary for inviting interested parties to submit some evidence on the case, for example in the process of evaluating a merger, it should not be required for the use of investigative powers. Especially with respect of inspections, it is very important that they come as a surprise for - would be able to destroy before hand all existing evidence of wrong doing. Publication should be made on the same day the inspection takes place. In Zimbabwe the possibility of conducting inspections is further reduced since the Authority is required by law to acquire the consent of the owner or person in charge of the premise before the Authority may be allowed to enter. So far the Zimbabwe Authority has not conducted any dawn raid. Just as a point of reference, practically all cases start with a dawn raid in the European Union and in the most advanced jurisdictions of the world. This would also be possible in Zimbabwe. For ex- may still exercise the powers of entry and inspection without the consent of the owner or person in charge of the premises “where there are reasonable grounds for believing that it is necessary to exercise them for the prevention, investigation or detection of an offence” or “for the obtaining of evidence relating to such an offence”. The presence of the police in all dawn raids may help the Authority overcome any resistance. As for the investigative procedure, in all three jurisdictions at the end of the investigation, all stakeholders are heard in front of the Authority. In principle, a statement of objection should be sent to the parties before hand, so that they know the charges that are being raised against them and can properly defend themselves. While transparency in these hearings is important, it should not go as far as having the press present at the hearing, as is the case in Zimbabwe. Too much transparency would some information being provided to the Authority a full understanding of the case. As for the burden of proof, any violation of the law should be proved by the Authority, while the parties should provide the necessary evidence for any possible exemption they request to be adopted. In general the structure of the law in the three jurisdictions follows this pattern. One important issue and the proof of the violation on the part of the Authority should be based on a technical analysis of the facts of the case and their correspondence with the legal provisions. The further requirement in the United Republic of Tanzania that the law be violated intentionally makes the whole system jective appreciations of this kind should not be part of an administrative system of enforcement and should be eliminated. These words about intentionality should be interpreted as implying that when the reach of the law is extended by the case could be issued only for the future, once it is well know that such practices are indeed prohibited.

PREFACE<br />

agreements. . In the United Republic of Tanzania,<br />

there is no market share threshold and parties can<br />

voluntarily notify any agreement that they believe<br />

deserves an exemption. The standard for an exemption<br />

is very similar in the two jurisdictions and<br />

<br />

the negative effects associated with the restrictions<br />

of competition. In both jurisdictions the law<br />

requires that in order to grant an exemption there<br />

<br />

-<br />

<br />

<br />

<br />

effective way to promote compliance with an antitrust<br />

law, since the most identify serious restrictions<br />

-<br />

<br />

ject<br />

to an authorization system, notify only agreements<br />

that they believe can be exempted. Serious<br />

<br />

just overburden competition authorities with paper<br />

work, but do not result in an improvement of<br />

the competitive environment.<br />

-<br />

<br />

ated<br />

to a fee) and in that case the role that it plays<br />

tions<br />

increase too much, the Authorities may need<br />

to issue block exemption regulations that would<br />

<br />

of what happened in the European Union before<br />

<br />

would make any attempt of rationalization impossible<br />

(unless funds are guaranteed to the Authority<br />

by some other source).<br />

The individual country <strong>report</strong>s for the United Republic<br />

of Tanzania and Zambia do not contain recommendations<br />

that the substantive parts of their<br />

laws be changed. There are however some suggestions<br />

for revising the text of the Legislation on<br />

some procedural issues (for example the threshold<br />

for not restrictiveness of vertical agreements in<br />

Zambia) but these suggestions can be implemented<br />

through case law developments and through<br />

<br />

informed on what is prohibited. This is the case<br />

of vertical agreements and horizontal cooperation<br />

agreements in the area of technology transfers<br />

and R&D. A similar effort could be undertaken for<br />

abuse of dominance type violations.<br />

The regional groupings, to which the three jurisdictions<br />

belong, could help in the issuing of these<br />

guidelines, providing reference documents that<br />

individual jurisdictions could then use domestically.<br />

What is any case very important is that decisions<br />

by the authorities be motivated and published<br />

by making them available on the website of the<br />

authorities. With legal provisions of a general<br />

type decisions serve an educational purpose and<br />

should be made available to everybody, so as to<br />

enhance legal certainty. Also the judiciary should<br />

have the same type of obligations and judgments<br />

in competition cases should be made easily available,<br />

possibly on the website of the authorities.<br />

2. The investigative powers of<br />

competition authorities<br />

The major problem in antitrust cases is that the evidence<br />

that needs to be collected to prove a violation<br />

is not freely available in the market nor in<br />

the information set of possible complainants. For<br />

example in a predatory pricing case, the excluded<br />

competitor would not have any information on the<br />

actual level of costs of the dominant company to<br />

be used as a benchmark to which to compare the<br />

dominant company supposedly predatory prices.<br />

Similarly in a cartel case, a customer of the cartel<br />

would not have information on how the cartel operates<br />

or, even more importantly, on whether the<br />

cartel actually exists. As for the Authority role, simply<br />

asking those that might have committed a violation<br />

to provide the necessary evidence would not<br />

<br />

provide some information can be effective only if<br />

-<br />

<br />

will not respond or will not say the truth. This is why,<br />

<br />

interest in providing the necessary information for<br />

the Authority to issue a quick decision, competition<br />

authorities need strong investigative powers in<br />

order to be able to gather the necessary evidence.<br />

In all three jurisdictions the Authority can open an<br />

own motion enquiry, act on complaints, require a<br />

person to submit information, to produce a document<br />

or to appear in person.<br />

9<br />

COMPARATIVE ASSESMENT

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