a tripartite report - Unctad

184 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE
Such an open ended phrase “as soon as practicable”
may cause long delays to the notifying parties
given that the parties to a merger have a legitimate
interest to know how long the merger control
procedure will last. This is a major shortcoming
petition
enforcement on mergers and acquisitions
aspect in Zimbabwe.
In practice most merger control regimes are based
on similar underlying principle of prohibiting the
creation or strengthening of a dominant position
which would result in either substantial lessening
impediment to effective competition in a particular
relevant market. The merger test is usually
crafted to prohibit those mergers that either create
or strengthen a position of dominance in a relevant
market.
The ZCA has attempted to provide for this test
in Section 32 (1) that “… In determining, for the
purposes of section thirty-one, whether or not
any restrictive practice, merger or monopoly situation
is or will be contrary to the public interest …”
and Section 32 (4) “the Commission shall regard
a merger as contrary to the public interest if the
(a) has lessened substantially or is likely to lessen
substantially the degree of competition
in Zimbabwe or any substantial part of
Zimbabwe; or
(b) has resulted or is likely to result in a monopoly
situation which is or will be contrary to the
public interest”.
The Section 32 (1) prohibits mergers which are
contrary to public interest; Section 32 (4) impliedly
(b) which covers both creation and strengthening
of dominance in the market. It can be observed
that the prohibition is scattered in Sections 2, 32
(1), 32 (4) and 34 of the ZCA, makes the interpretation
of the ZCA in so far as prohibited mergers
is concerned a complicated undertaking. To make
it simple, the prohibition of mergers would directly
and categorically target the creation and strengthen
of position of dominance/monopoly situation.
If it appears that the merger is likely to substantially
prevent or lessen competition in Zimbabwe
or any part of Zimbabwe, the Commission then
determines whether the merger is likely to result
petitive
gain which would be greater than and offset
the effects of any prevention or lessening of
competition that may result or likely result from
the merger, and would not likely be obtained if the
merger is prevented.
The pro-competitive gains include economies of
scale or other reason resulting into or are likely to
business, trade or industry, necessary for the production,
supply or distribution of any commodity
or service in Zimbabwe.
alty
of up to 10 per cent of either or both of the
merging parties’ annual turnovers in Zimbabwe.
There are no provisions to provide for a procedure
to handle a breach of merger condition as it
may be ordered under Section 31 (2) (e). Invariably
there is no provision to sanction such breach in the
ZCA. Section 33 of the ZCA attempts to provide for
this, by allowing for the registration of the CTC orders
for enforcement purposes and the penalty for
failure to comply with such orders. Whilst Section
33 (2) provides that once registered, the order of
the CTC has the effect of a civil judgment, the same
Section under Subsection (7) goes on to prescribe
a criminal penalty for failure to comply with any
provision of the order, thus derailing its potency.
This is an anomaly that needs to be addressed.
Penalties associated with breach of merger pro-
provided in Section 34 A (4) are too wide (1 – 10
per cent of either or both of the merging parties)
hence giving room for exercise of greater discretion
than prudence would demand. The lower limit
should have been elevated especially considering
the gravity of the offences as provided in Section
34 A (3) (a) and (b).
2.4 Consumer Protection/Unfair
Competition Issues
Consumer protection laws are designed to ensure
truthful information in the marketplace. The laws
are designed to prevent businesses that engage in
advantage over competitors and may provide additional
protection for the weak and those unable