Competition Amendment Bill: Fuzzy laws make for stronger bureaucracy
The Competition Amendment Bill of 2018 is progressing smoothly, perhaps too smoothly, through parliament. It appears that the gatekeepers of competition are getting their wish, which seemingly is more control over South Africa’s commercial environment. Opposing this, Sakeliga has made three written submissions on this Bill. By the 14th of November, we would have made a third and further presentation in parliament to the NCOP.
We appreciate that competition policy is no simple matter. It is a matter that divides economists and even free-market economists. It is, however, not a trivial matter. The Competition Commission and the Competition Tribunal, clearly creatures of the South African regulatory state, through their coercive say over among other things merger and exemptions from the competition act, are already gatekeepers to much of SA’s commercial activity. Their flavour of enforcement in no way represents a hands-off approach to economic regulation, something of which, I would say, we need much more.
The recent refusal of the intended merger between SA Airlink and FlySafair aptly illustrates the powerful influence of the competition authorities to put on or lead to a handbrake on commercial activity. In free markets, if there were to be competition enforcement, it would amount only to ensuring a level regulatory legal playing field, especially pertaining to state-supported industries. This clearly is not the aim of local competition enforcement, which evidently amounts to a form of state-management of commerce.
The refusal of the merger shows regulators attempting to judge “optimum conditions” for competition – something that is very hard, I would say impossible, to do considering all of the nth order complexities of dynamic real-world markets. Less enforcement, however, is not on the cards, especially when one considers the further prominence of supposed “public interest” considerations in merger approval or exemption applications.
If the 2018 Bill were passed in its present form, it would grant the Commission more sway over the economy, especially to drive government’s policy of BEE. This is a policy the likes of Sakeliga deem dysfunctional and costly to true economic progress. The competition authorities would drive this form of empowerment through newly drafted and dubious clauses that aim to benefit small and medium businesses (SMEs) or firms controlled by historically disadvantaged individuals (HDI).