BOTSWANA’S NEW COMPETITION ACT

Friday, May 25, 2018
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The President of Botswana, Mokgweetsi Masisi, has assented to a new Competition Act, 17 of 2018 (the new Act), which is still to come into effect. The new Act will repeal the current competition legislation and will introduce certain important changes, including criminal liability for cartel conduct. Some of the key changes to be brought into effect are noted below.  

Institutions

The current Competition Authority will be renamed the Competition and Consumer Authority (the CCA) and a separate body, the Competition and Consumer Board (CCB), will be established to govern and direct the affairs the CCA. The new Act specifically mandates the CCB to give policy direction to the CCA. 

The current legislation does not provide for a specific body to be dedicated to adjudicating alleged contraventions. Under the new Act, the Competition and Consumer Tribunal (CCT) will be established to adjudicate breaches of the new Act and hear appeals from decisions of the CCA in respect of mergers. 

Criminal liability and sanctions for engaging in restrictive practices

The current competition legislation does not provide for criminal liability for cartel conduct.

However, the new Act provides that criminal sanctions will apply to any officer or director of an enterprise who contravenes the horizontal restrictive practice provisions of the new Act. An officer or director may be liable for a fine of up to BWP 100 000 (approximately USD 10 000) or imprisonment for up to five years, or both.

The CCA will be required to report the investigation of criminal matters under the new Act to the Botswana Police Service.

Personal liability may apply to any director or officer contravening the resale price maintenance provisions of the new Act. A fine of up to
BWP 50 000 (approximately USD 5 000) may be imposed.

Abuse of dominance

The current competition legislation only provides a general prohibition against the abuse of dominance, without specifying types of conduct that are regarded as abusive. 

The new Act introduces specific types of conduct that will be regarded as abusive, namely:

  1. predatory conduct
  2. tying and bundling conduct
  3. loyalty rebates
  4. margin squeeze
  5. refusal to supply or deal with other enterprises including refusal of access to an essential facility,
  6. requiring or inducing any customer to not deal with other competitors,
  7. discriminating in price or other trading conditions; and
  8. exclusive dealing. 

Mergers

The current competition legislation provides for the regulator to take action against parties for failing to notify a merger or for prior implementation, but it makes no provision for financial penalties in these circumstances. 

The new Act changes this position by introducing financial penalties for failing to notify a merger or for prior implementation of a merger. A penalty of up to 10% of the consideration or the combined turnover of the parties involved in the merger (whichever is greater) may be imposed.

The new Act provides for the Minister of Investment, Trade and Industry to provide comments to the CCA where a merger "raises paramount issues of public interest".

Under the new Act, where a merger is rejected, the merging parties have 14 days within which to apply to the CCA to request it to reconsider its decision. The application should include any evidence or 'material' facts that were not included in the original notification. The CCA is required to reconsider the application within 30 days if it considers the new facts or evidence 'material'.

For further information, please contact our Competition Practice.