Legal updates and opinions
Post Author
News / News
Memorandum of understanding concluded between the Broad Based Black Economic Empowerment (“BBBEE”) Commission and the Competition Commission – the increasingly important interface between BBBEE and Competition Law
- ) The Competition Commission investigates certain mergers and anticompetitive practices including cartel conduct (for example price fixing, collusive tendering and market division between competitors) and abuses of dominance. The BBBEE Commission focuses on complaints relating to BBBEE including fronting practices (which are widely defined as a transaction, arrangement or other act or conduct that directly or indirectly undermines or frustrates the achievement of the objectives or the implementation of the Broad Based Black Economic Empowerment Act).
- ) One of the purposes of the Competition Act is to promote a greater spread of ownership in particular to increase the ownership stakes of historically disadvantaged persons (“HDPs“). In investigating mergers, the competition authorities are currently required to consider the effect of the merger on the ability of firms controlled or owned by HDPs (“HDP Firms“) “to become competitive”. This must also be taken into account by the Competition Commission when deciding whether or not to grant an exemption to an agreement or practice which would otherwise be prohibited by the Competition Act.
- ) Proposed amendments to the Competition Act were published in December 2017. The background note to the proposed amendments explain that they provide for “scrutiny of the racially-skewed spread of ownership of the South African economy” and that measures are required in order to “realise the transformative vision of economic empowerment for all South Africans in particular those individuals who are historically excluded and disadvantaged”. The proposed amendments are intended to “create more opportunities to advance the transformation of ownership of the economy”. One of the priorities identified by the Ministry of Economic Development is that special attention must be given to the impact of anticompetitive conduct on HDP firms. The proposed amendments include –
- ) a new requirement to consider the effect of price discrimination by dominant firms on HDP firms;
- ) changing and widening the current test used in exemption applications and merger cases (referred to above) to take into account the “promotion of the effective entry into, participation in and expansion within a market” by HDP firms;
- ) obliging the Competition Commission to take HDP firms into account when conducting a market inquiry and deciding if any feature of the market prevents, restricts or distorts competition;
- ) obliging the Competition Tribunal to take into account the effect of a competition contravention on HDP firms when deciding the amount of a penalty to be imposed on a firm.
- ) The memorandum of understanding (“MOU“) between the BBBEE Commission and the Competition Commission was concluded in August 2017 and will affect complaints and transactions submitted to either regulator. It is conceivable that a fronting practice for BBBEE purpose could also constitute a contravention of the Competition Act and vice versa. The MOU provides for consultation procedures between the two regulators and participation by representatives each regulator in complaints and transactions submitted to the other regulator. The MOU specifically provides that if the Competition Commission considers a complaint involving a transaction with implications for BBBEE and over which the BBBEE Commission also has jurisdiction, the Competition Commission must consult with the BBBEE Commission and have regard to the BBBEE Commission’s views. A joint working committee will be established between the two regulators and provision is made for the exchange of information between the two regulators. Disclosure of confidential information will however require the permission of the party which submitted such confidential information.
- ) It is likely that BBBEE will become more important in future competition cases. The involvement of the BBBEE Commission in competition cases (and the Competition Commission in BBBEE cases) is an important development and may lead to complications and delays in the investigation and finalisation of cases. The manner in which MOU is implemented in practice will be watched with interest.
Latest News
Proposed New Capital Flow Management Regulations fail to live up to expectations
by Kyle Fyfe, Director On 17 April 2026, National Treasury and the South African Reserve Bank published the long awaited [...]
Understanding the 1 May 2026 BCEA Earnings Threshold Adjustment: Implications for employers and employees
by Banky Sono, Director, Dakalo Singo, Head of Pro Bono, Neo Sewela, Director and Sandile Mogweng, Candidate Attorney The Minister [...]
The Banks Win on Appeal: SCA Overturns R704 Million High Court Judgment
by Tshegofatso Matlou, Associate, reviewed by Jones Antunes, Director In the decision of African Banking Corporation of Zambia Limited and [...]
Out with the Old: South Africa’s Proposed Overhaul of Exchange Controls and the Inclusion of Crypto Assets
by Janice Geel, Associate and Azraa Sidat, Candidate Attorney, reviewed by Natalie Scott, Director and Head of Sustainability On 17 [...]
Do not call me I’ll call you …… South Africa’s 2026 CPA Amendment Regulations: operationalising the national opt‑out regime for direct marketing and shifting day‑to‑day anti‑spam responsibility to the National Consumer Commission
by Ahmore Burger-Smidt, Director and Head of Regulatory The Consumer Protection Act Amendment Regulations, 2026 deliver the long‑awaited operational framework [...]
Business Rescue Applications Under Scrutiny: business rescue orders are not there for the taking!
by Eric Levenstein, Director and Head Insolvency & Business Rescue and Amy Mackechnie, Senior Associate This article considers the recent decision in [...]
