COVID-19: MERGER NOTIFICATION PROCESSES AND COMPETITION ENFORCEMENT ACTIVITY IN AFRICA
We continue to monitor developments on the operations and priorities of competition regulators across Africa during the COVID-19 pandemic. Further to our newsflashes of 30 March 2020 and 19 March 2020, our latest update is set out below.
The President of Angola declared a state of emergency and a 14 day nationwide lockdown effective from 27 March 2020. The state of emergency has been extended to 25 April 2020. As such, the Competition Regulatory Authority (CRA) is only accepting electronic notifications at present and the CRA has suspended face-to-face meetings.
The President of Botswana declared a state of emergency and a 28 day lockdown effective from 2 April 2020. As such, the Botswana Competition and Consumer Authority (BCCA) has suspended all activities. In this regard, the BCCA will not be accepting any new merger notifications until further notice and the review period for mergers currently under review has been suspended.
The BCCA issued a notice on 1 April 2020 noting that it had received a number of complaints in relation to price increases of essential products, in particular: (i) basic food items, (ii) healthcare and hygiene products, and (iii) dubious products being sold in the market.
The BCCA states that it will take appropriate action against any business or person found to be engaged in deceptive practices or any other trade malpractices in the supply of products intended to fight COVID-19.
On 18 March 2020, the President of the CEMAC Commission announced the suspension of all meetings and workshops at CEMAC regional offices, including meetings relating to competition matters.
Merger notifications can still be submitted to the CEMAC offices. Non-essential staff are working remotely but delays in the review of mergers should be expected.
On 17 March 2020, the COMESA Competition Commission (CCC) issued a press release warning companies and individuals selling products with the claim that they can 'treat' or 'prevent' COVID-19, without medical evidence, contravenes article 27 of the COMESA Competition Regulations (Regulations) and attracts a penalty of up to USD 300 000.
On 31 March 2020, the CCC issued a press release setting out interim processes for merger reviews under the Regulations in light of COVID-19. These interim processes include:
- Merger notifications are required to be submitted electronically and parties are no longer expected to submit hard copies to the CCC.
- Pursuant to Article 24 (1) of the Regulations, merging parties are required to notify the CCC within 30 days of their decision to merge. The CCC notes that in light of the restrictions on movement and the lockdown in most countries, some merging parties may not be able to prepare a complete merger notification within 30 days from their decision to merge. In the circumstances, merging parties will not be penalized for failure to submit a complete notification to the CCC within 30 days of the parties’ decision to merge, provided that they notify the CCC of the merger.
- The CCC has suspended onsite investigations and face-to-face meetings with regard to merger investigations. However, consultations and meetings will continue to be held through teleconferencing facilities until the situation normalises.
- Merger reviews may not be completed within the 120 day merger review period as provided for under Article 25(1) of the Regulations. As such, the 120 day merger review period may be extended in accordance with the Regulations.
The Egyptian Government declared a partial two-week curfew on 24 March 2020, which has resulted in the closure of most government offices and public services. The Egyptian Competition Authority is operating on a skeletal staff basis, to receive complaints during specified hours. Merger notifications are being submitted electronically.
A partial 21-day lockdown was declared, effective from 27 March 2020. As such, the eSwatini Competition Commission is only accepting merger filings electronically.
On 25 March 2020, the Ethiopian Government implemented a ‘work from home’ principle. At the time of writing, the Trade Competition and Consumer Protection Authority was yet to indicate how its operations would be impacted by the Ethiopian Government’s directive.
Officials of the Competition Authority of Kenya (CAK) are working off site, and meetings with external parties are expected to take place remotely via video or telephone conference where necessary/ possible.
Merging parties are encouraged to submit filings electronically.
On 16 March 2020, the CAK issued a press release noting that it had issued a remedial order to Cleanshelf Supermarkets (Cleanshelf) after investigations determined that the retailer 'unconscionably' adjusted prices of Tropikal brand hand sanitizers (500ml) in contravention of the Competition Act, No.12 of 2010.
The CAK found that 'the retailer therefore exploited its relative strength as a retailer to commercially detriment consumers whose bargaining position has been diminished following the pronouncement of existence of COVID-19 in Kenya'. The remedial order required Cleanshelf to contact and refund all consumers who purchased the 960 pieces of the Tropikal brand hand sanitizers above the usual selling price.
The Competition and Fair Trading Commission (CFTC) is functioning as usual.
The CFTC issued a press release on 23 March 2020 noting that it had ordered 11 pharmacy shops (six in Lilongwe and five in Blantyre) to immediately cease and desist from excessive pricing of products used for the treatment of COVID-19. These products were hand sanitisers, face masks and gloves.
On 23 March 2020, the Mauritian Government implemented a ‘curfew’ to last until 2 April 2020. The curfew has subsequently been extended to 4 May 2020. As such, the office of the Competition Commission of Mauritius (CCM) is closed but staff are working remotely. Complaints can be submitted electronically.
The CCM issued a press release on 9 April 2020 noting that some businesses may be called upon to collaborate among themselves in the public interest to ensure that Mauritians continue to be supplied with essential products and services.
In this regard, the CCM provides its ‘assurance’ that competition law enforcement by the CCM will not ‘constrain’ or ‘impede’ ‘critical cooperation’, which is in the interest of consumers and the public and which does not last longer than is necessary.
The press release also notes that the Competition Act, 2007 (Law), does not prohibit suppliers from setting ‘maximum prices’ for their products with a view to limiting ‘unjustified price increases’ at retail level, nor does the Law prohibit suppliers from recommending retail prices and affixing recommended retail prices on their products as long as the words ‘recommended price’ appear on the price label.
In light of the state of emergency declared by the President of Namibia, the offices of the Namibian Competition Commission (NaCC) are closed from 18 March 2020 to 20 April 2020. However, merger notifications may be submitted electronically over this period.
The NaCC still requires hard copies of merger notifications to be submitted after this period.
On 23 March 2020, the Head of Civil Service of Nigeria directed that all non-essential public servants on grade level 12 and below work from home with effect from 24 March 2020 until further notice. As such, the Federal Competition and Consumer Protection Commission (FCCPC) is not currently operating at full capacity.
The FCCPC issued a press release on 23 March 2020 advising against arbitrary, unreasonable, unconscionable, excessive and irrational pricing of critical hygiene products (‘price gouging’). The press release notes that 'violators will be criminally prosecuted where the evidence sufficiently supports same'.
On 31 March 2020, the FCCPC issued a press release noting that in light of capacity constraints it would prioritise COVID-19 related complaints/ issues. Although the FCCPC is currently prioritizing COVID-19 matters, they will continue to accept 'sensitive and urgent' merger notifications.
The Fair Trading Commission is functioning as usual.
On 24 March 2020, the South African Competition Commission (SACC) issued a press release noting that the SACC would scale down operations significantly but would prioritise all COVID-19 complaints and the enforcement of the regulations gazetted by the Minister of Trade and Industry, Minister Ebrahim Patel.
During the lockdown, the SACC discourages the filing of complaints unrelated to COVID-19. The SACC also discourages merger transactions other than those involving failing firms or firms in financial distress.
Complaints related to abuses of dominance or exploitative practices relating to COVID-19 will be handled by a dedicated team comprising members of the SACC and the National Consumer Commission (NCC). As of 7 April 2020, the SACC had received more than 650 complaints about increases in the prices of essential products.
On 3 April 2020, Competition Tribunal Rules regulating complaint referrals for alleged COVID-19 excessive pricing contraventions (Rules) were gazetted. The Rules detail the procedural steps applicable when an excessive pricing complaint is referred to the Competition Tribunal (Tribunal), and these Rules will continue to apply for as long as COVID-19 remains a declared national disaster.
The Rules include expedited time periods for the treatment of excessive pricing complaints. They also empower the Tribunal to remedy an excessive pricing contravention by imposing a pricing order on the respondent. See further details here.
The following regulations impacting competition regulation in South Africa have been issued to date in response to COVID-19:
- Regulations exempting certain categories of agreements and practices in the banking sector which are required to respond to the COVID-19 crisis. See further details here.
- Regulations that prohibit excessive pricing by dominant suppliers, restrict suppliers of all goods and services from charging prices which are unconscionable, unfair, unreasonable or unjust, and impose measures to facilitate the supply of goods and services during the period that COVID-19 is declared a national disaster. See further details here.
- Regulations exempting certain categories of agreements and practices in the healthcare sector which are required to respond to the COVID-19 crisis. See further details here.
- Regulations exempting certain categories of agreements and practices in the hotel industry which are required to respond to the COVID-19 crisis. See further details here.
- Regulations exempting certain categories of agreements and practices in the retail property sector which are required to respond to the COVID-19 crisis. See further details here.
The Tanzanian Fair Competition Commission (FCC) is functioning as usual.
On 19 March 2020, the FCC issued a notice warning importers, traders, manufacturers, and dealers of antiseptic products, face masks and gloves that price fixing, creating artificial shortages, and refusing to sell such products, is an offence under the Fair Competition Act, 2003.
On 22 March 2020 the Competition Council (CC) issued a notice suspending all judicial and consultative activities until 4 April 2020. This period has been extended to 18 April 2020.
The Zambian Competition and Consumer Protection Commission is functioning as usual.
The Zanzibar Fair Competition Commission is functioning as usual.
The President of Zimbabwe announced a 21-day lockdown effective from 30 March 2020. As a result, the offices of the Competition and Tariff Commission (CTC) have been closed and the CTC is not accepting new merger applications.
For further information please contact one of the partners in our Competition Practice.
* Update provided with the assistance of: Rede De Servicos De Advocacia De Lingua Portuguesa (Angola), Besong & Co. (CEMAC), EAH Associates in association with Gide Loyrette Nouel (Egypt), PFI Partnerships (Malawi), Udo Udoma & Belo-Osagie (Nigeria), Robinson Bertram (Swaziland), Global Lawyers North Africa Sarl (Tunisia), and Scanlen & Holderness (Zimbabwe).
** COMESA comprises 21 member states: Burundi, Comoros, the Democratic Republic of Congo, Djibouti, Egypt, Eritrea, eSwatini, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Somalia, Tunisia, Uganda, Zambia and Zimbabwe.
We have created a repository to house this newsflash as well as all the other information we have compiled for clients regarding COVID-19 across our geographical footprint. Click here to access the page.