For decades, the detection of cartels has been heavily reliant on a familiar trinity: the leniency applicant who breaks ranks, the disgruntled employee who blows the whistle, and the dawn raid that turns up the incriminating notebook. That model is changing. Competition authorities around the world are now deploying artificial intelligence (AI)  tools to sift through procurement data to detect statistical fingerprints of collusion. This follows a global trend of competition agencies across the world making use of AI tools to detect bid-rigging. It was only a matter of time until South Africa followed in these footsteps.

The South African development

It is reported that the South African Competition Commission is in the process of developing an AI tool to help identify suspected bid-rigging in the local public procurement industry. Commissioner Doris Tshepe told Parliament’s Select Committee on Economic Development and Trade on 30 September 2026 that the tool would assist the Commission in identifying potential cartel conduct in electronic public procurement. The tool is reportedly being developed with the assistance of the Competition and Consumer Commission of Singapore and AI specialists at the University of Pretoria.

This is a logical step considering that countries such as Singapore, Pakistan and Brazil have experienced much success with tools of a same kind, this is according to the Stanford Computational Antitrust’s Fifty Cross-Agency Report which was published in September 2026.

Collusive tendering is one of the forms of horizontal conduct prohibited outright under section 4(1)(b)(iii) of the Competition Act 89 of 1998, and public procurement has long been a priority enforcement area for the Commission. Importantly, the raw material for such a tool already exists: National Treasury publishes procurement data captured through the eTender portal, covering procurement plans, tenders, awards and contracts, in open, reusable formats.

What the rest of the world is doing

The Commission’s initiative places South Africa within a clear and accelerating international trend.

• United Kingdom. The CMA launched an algorithm-based “Screening for Cartels” tool for public procurers in December 2017, designed to flag unusual bidder behaviour and pricing patterns. That downloadable tool was withdrawn in 2020, and the CMA has since built an in-house capability, the Bid Rigging Intelligence Tool (BRIT), which it describes as offering cutting-edge capabilities to analyse public-sector data at scale. In September 2026 the CMA’s Chief Executive estimated that bid-rigging could be costing UK taxpayers between £1 billion and £3.5 billion a year, and the CMA’s Annual Plan 2026 to 2027 commits to using AI and other data science tools to scan bidding data and identify illegal activity at scale. Notably, the deterrent stakes have risen: under the Procurement Act 2023 debarment regime, cartelists face inclusion on a central debarment register and exclusion from public tenders for up to five years.
• Spain. The Spanish competition authority (CNMC) has built its own procurement database and screening tool, BRAVA (Bid Rigging Algorithm for Vigilance in Antitrust), drawing on data that includes losing bids. The CMA reports that the CNMC claims a classification success rate of at least 90%, and that the CNMC has begun developing ATENEA, an agentic reasoning system to analyse and interpret data flagged by BRAVA.
• Brazil and others. According to the CMA, the Brazilian competition authority receives procurement data directly from public bodies, allowing it to apply AI screens to detect cartels. The CMA has also pointed to Portugal and Korea as jurisdictions using data screening tools to find suspicious patterns at scale, and the 2022 compendium referred to similar initiatives in Australia, Canada and the United States.
• European Union. In its 2021 Notice on tools to fight collusion in public procurement (2021/C 91/01), the European Commission encouraged Member States to collect and analyse large volumes of electronic procurement data, “possibly using algorithms, artificial intelligence algorithms or machine learning”, and to give competition authorities access to procurement databases. At the enforcement level, the Commission’s DG Competition has invested in data analysis capability for its ex officio cartel detection work, run machine-learning proofs of concept to support investigations, and leads AI literacy initiatives to ensure that AI is applied safely and effectively in enforcement.

The lesson from abroad: data is everything

The single clearest message from the international experience is that an AI tool is only as good as the data it is fed. The CMA has been candid that BRIT cannot reach its true potential because, unlike in many other countries, losing-bid data is not routinely collected in the UK or made available in a consistent, machine-readable format. Spain’s success, by contrast, rests on a legal requirement to collect specified information about all participating tenderers.

For South Africa, the success of the Commission’s tool will therefore depend less on the sophistication of the algorithm and more on the completeness and quality of the procurement data, including bids by unsuccessful tenderers, pricing detail and bidder ownership information, and on the degree of cooperation between the Commission, National Treasury and organs of state at national, provincial and municipal level.

Questions of fairness and governance

The use of AI by a regulator also raises legitimate questions. An algorithmic flag is a screening signal, not evidence of contravention. Firms may legitimately ask how a tool was trained, what thresholds it applies, and whether its outputs are being treated as a basis for initiating complaints, conducting searches or applying for information. Internationally, regulators are mindful of these concerns: the Commission’s 2021 Notice repeatedly emphasises compliance with data protection law, and the EU AI Act (Regulation (EU) 2024/1689) now imposes a governance framework on certain uses of AI, including by public authorities. In South Africa, the Protection of Personal Information Act 4 of 2013 will be relevant where personal information is processed, and the constitutional requirements of lawful, reasonable and procedurally fair administrative action continue to apply. We would expect the Commission to keep a human investigator firmly in the loop, and to be transparent about the role played by the tool in any proceedings.

What this means for business

Companies that tender for public contracts, and their advisers, should take note:

• Detection risk is rising. Cartel members can no longer assume that conduct will only come to light if a co-conspirator applies for leniency. By way of example, the Swiss Competition Authority has shared that the use of Al tools to detect big rigging has reduced its reliance on whistleblower information to investigate alleged cartel.  Patterns such as bid rotation, cover pricing, consistent price gaps and geographic allocation are exactly what screening tools are designed to detect.
• The leniency calculus changes. As the probability of independent detection increases, the value of being first through the door under the Commission’s Corporate Leniency Policy increases with it. Firms that discover historic misconduct should obtain advice promptly.
• Compliance must be data-aware. Compliance programmes should include periodic reviews of a firm’s own tendering history, careful control of contacts with competitors (including in joint ventures, subcontracting and consortium bids), and documentation of independent bid determination.
• Consequences go beyond fines. Beyond administrative penalties of up to 10% of turnover, bid-rigging can expose firms to procurement exclusions, civil damages claims and, for directors and managers, criminal liability under section 73A of the Competition Act.

Conclusion

The Commission’s AI initiative, developed with international and academic partners, reflects a global shift from reactive to proactive cartel enforcement. If properly resourced, supported by good-quality procurement data and applied with appropriate safeguards, it has the potential to change the risk profile of public procurement in South Africa significantly. For firms that participate in public tenders, the time to review competition compliance is now, before the algorithm does it for them. In our view, this signals the beginning of new era for competition compliance in South Africa, mainly that Al tools will have a meaningful impact on the enforcement of competition law against anti-competitive practices. What lies ahead however…remains to be seen.

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If your business manufactures, distributes or repairs phones, appliances, medical devices or other durable goods, this update is for you.

During the first week of October 2026 the Competition Commission published its Guidelines on Repair, Service and Maintenance Aftermarkets under section 79 of the Competition Act 89 of 1998. They build on the automotive aftermarket guidelines the Commission issued in 2021 and amended in September 2024. The Commission has now concluded that the same problems they identified in relation to cars, namely independent repairers being shut out, also arise with electronics, appliances and other durable goods.

Technically, the Guidelines are not binding. In practice, they matter a great deal. Put simply, the Commission has told the market where it intends to look, and manufacturers (OEMs), distributors and authorised repair networks should pay attention.

Scope: what’s in and what’s out

The Guidelines cover repair, service and maintenance for all devices, products and components. The one exception is motor vehicles, which remain under the separate automotive guidelines. The Commission expects the Guidelines to have the biggest impact in five specific areas:

• mobile phones, tablets and gaming consoles
• audiovisual equipment
• white goods
• medical devices
• back-up water and electricity systems

The main focus is on repairs that the customer pays for outside warranty. However, a product being under warranty does not automatically take every related repair out of the picture.

Market definition: don’t count on the “systems market” argument

This is the most important analytical point in the Guidelines. OEMs have often argued that competition in selling the product keeps their after-sales conduct in check. The Commission is clearly unlikely to accept that argument easily.

Its starting point is that selling the product and repairing it are separate markets. It notes that the conditions for treating them as one “systems” market, such as buyers costing repairs over the whole life of the product, low switching costs and generic parts, are rarely met in practice. If you want to argue otherwise, you will need evidence to back it up. This follows the US Supreme Court’s decision in Eastman Kodak. The Court held that a firm without market power in selling its equipment can still have market power in the aftermarket for its own brand.

Three further points are worth noting:

• You can have market power in the aftermarket even if you face strong competition when selling the product.
• You can have that power even if you do not carry out repairs yourself.
• The Commission will look at the size of your installed base, how many existing customers are “locked in” compared with new buyers, and how much control you have over parts, diagnostics and software.

Spare parts: where enforcement will start

If there is one message to take away, it is this: restricting access to spare parts is a serious concern for the Commission, and the Commission has made it an enforcement priority.

The concern goes well beyond refusing to supply. It also covers discriminatory supply terms, margin squeeze and tying. It covers less obvious tactics too, such as:

• insisting on proprietary tools where ordinary tools would do the job
• “parts pairing” software that stops a replacement part working unless the OEM activates it
• warning messages that appear after an independent repair

Setting minimum resale prices for parts, tools or repair services is prohibited outright.

There is also an important procedural change. If the Commission finds a restriction on spare parts, it will expect you to explain and support your justification. You will need to show that the restriction is necessary and proportionate. Where conduct looks exclusionary on its face, any justification will be held to a higher evidentiary standard.

Other conduct on the radar

Spare parts are not the only concern. The Commission will also look at:

• Other repair inputs, such as manuals and diagnostic tools, including margin squeeze, conditional supply and less favourable non-price terms.
• Accreditation schemes that are not transparent or proportionate, or that are applied inconsistently.
• Opaque pricing that leaves independent service providers (ISPs) unable to work out their costs.
• Steering customers away from ISPs, for example by making repair uneconomic compared with replacement, offering loyalty rewards tied to OEM repair, or making switching difficult.
• Warranty terms that restrict customer choice more than is needed to run the warranty.

Justifications: available, but narrow

None of this means that OEMs cannot protect legitimate interests. The Commission accepts that intellectual property, safety and regulatory compliance can justify a restriction. However, any justification must be specific and must go no further than necessary:

• Intellectual property. IP in one component will not normally justify restricting repairs to unrelated parts.
• Regulatory requirements. If you rely on an NRCS, EPR or product-specific rule, you must identify the actual instrument and show that your conduct goes no further than it requires.
• Security and safety components. Accreditation controls limited to security- or safety-critical components are acceptable if they are objective, transparent and non-discriminatory. Accredited ISPs must also get access on terms at least as good as those given to your authorised network.

This reflects the EU’s CEAHR decision, where selective repair systems were upheld because any repairer meeting objective criteria could join.

Conclusion: what to do now

These Guidelines bring South Africa into line with right-to-repair developments in the EU. They also reflect the Act’s wider aim of opening markets to SMMEs and historically disadvantaged persons. Our practical advice is to take five steps now:

• Audit your aftermarket arrangements. Look closely at spare parts policies, distribution and exclusivity agreements, and authorised repairer contracts for both direct and indirect restrictions.
• Review software and design. Check whether parts pairing, activation controls or diagnostic access block independent repair without good reason.
• Prepare your justifications now. The Commission expects them early, so record the regulatory, safety or IP reason for each restriction and the specific legal instrument behind it.
• Test your accreditation and warranty terms. Make sure they are transparent, proportionate and non-discriminatory, and limited to what the warranty genuinely requires.
• Don’t assume being smaller protects you. Firms below the section 6 dominance threshold can still be caught by section 5 if their vertical agreements restrict competition.

For independent repairers, the Guidelines provide a clear basis for raising complaints. For everyone else, the conclusion is simple: how you run your aftermarket is now as much a competition compliance question as a commercial one.

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What the Report Is

On 3 September 2026, the Competition Commission of South Africa (‘the Commission’) published a research report highlighting its findings on the Rural and Township Economy Project (‘the Report’). The purpose of The Report is to inform policy makers, regulators, and business leaders about the economic dynamics in South Africa’s township and rural areas, focusing on competition and economic participation. It was authored by researchers within the Commission’s Economic Research Bureau, Qhawe Mahlalela, Tessa Bleazard, and Zintle Siyo, with assistance from Dr Hariprasad Govinda, drawing on literature, enforcement experience, and two dedicated surveys: a Business Survey and a Consumer Survey. The Report is not a market inquiry, nor does it carry binding legal force. It is, however, a substantial and data-rich piece of research that the Commission plainly intends to use as a platform for future enforcement, policy engagement, and inter-agency cooperation. Its publication should be understood as a signal of the Commission’s intention to apply a more nuanced and empirically grounded approach to competition in historically underserved markets.

Why It Matters

Townships and rural settlements are home to a very large share of the South African population,  over 40% of the country’s residents live in townships alone. These areas were shaped by apartheid-era spatial policies, principally the Group Areas Act of 1950 and the Natives Land Act of 1913, which were designed to confine non-white South Africans to geographically isolated, economically marginalised settlements. The Report describes this legacy as “exclusion by design,” and traces a direct line from those historical policies to the patterns of poverty, unemployment, inequality, and business informality that persist in these areas today.

The economic significance of these communities is widely recognised. National policy frameworks, including the National Development Plan 2030 and the Medium-Term Development Plan 2024–2029, identify township and rural enterprises as critical to employment creation and inclusive growth in pursuit of economic development. The Commission’s Report adds a competition dimension to this national conversation, asking what specific market and regulatory barriers prevent businesses in these areas from entering, growing, and competing effectively, and what this means for the consumers who depend on them.

What the Report Finds

The Report’s findings are organised around three broad themes:

• market barriers;
• regulatory barriers and;
• the implications of both for how competition should be assessed in these economies.

On the market side, two problem areas stand out. The first is procurement. The Report finds that how businesses obtain their stock and inputs differs sharply depending on the type of business. National chains and franchises tend to be well-integrated into large, formalised supply networks with strong bargaining power and reliable access to goods. Independent and informal businesses, which make up the overwhelming majority of firms in township and rural areas, rely instead on smaller suppliers and intermediary channels, where they face higher costs, less reliable supply, and weaker negotiating positions. The data is stark: township national chains source roughly 65% of inputs through large formal wholesalers, whereas independents and informal businesses are far more dependent on smaller and costlier channels. Moreover, the Report finds that there are procurement difficulties across several sectors such as the agriculture, construction, hair and beauty, hospitality, medical or health services, and retail industries. It is said that businesses in those sectors are experiencing higher input or inventory costs. In light of this, independent and informal businesses are therefore inclined to  reduce their order sizes which further weakens their bargaining power, while lack of local supplier availability and stock shortages are also found to present significant issues in these sectors. These procurement asymmetries translate into higher procurement costs for township and rural businesses and narrower product ranges for the consumers who shop at smaller outlets.

The second market barrier is route to market. Most township and rural businesses sell through their own physical premises, typically small, low-footfall stores, with very limited access to major retailers, shopping centres, or online platforms. The Report finds that this is not because smaller businesses lack ambition or interest in expansion. On the contrary, the survey evidence points to significant latent demand among smaller firms for access to formal retail spaces such as malls and shopping centres. What holds them back is a combination of high rental costs, exclusivity arrangements favouring established brands, information gaps, and a general preference by mall operators for large, well-known tenants. Online channels present a similar story: registration thresholds, infrastructure weaknesses, and a lack of digital know-how keep many township and rural businesses off e-commerce platforms entirely.

On the regulatory side, the Report documents a pervasive landscape of “red tape“, complex and costly compliance requirements associated with permits, licences, zoning rules, municipal by-laws, and service disruptions. These burdens fall most heavily on smaller and less formal businesses, which have the fewest resources to navigate opaque administrative systems. The effects are not merely bureaucratic: regulatory barriers can delay market entry, prevent businesses from relocating to better premises, discourage investment, and entrench informality by making the cost of formalisation prohibitively high. Businesses that remain non-compliant find themselves locked out of funding, unable to access formal supply chains, and invisible to potential partners and customers. For consumers, the downstream consequence is fewer nearby options, less variety, and longer travel distances to reach better-stocked stores, with transport costs functioning as an additional, hidden price.

A Revised Lens for Competition Assessment

Beyond its factual findings, the Report proposes a shift in how competition authorities and practitioners should think about markets in township and rural settings.

On the question of closeness of competition, the Report warns against the assumption that businesses operating in the same area and selling similar products necessarily constrain one another. Consumer survey data shows that shoppers frequently do not view independent or informal outlets as substitutes for chain stores, they perceive meaningful differences in quality, variety, reliability, and the type of shopping occasion each serves. Two businesses may coexist in the same township, but if consumers do not regard them as interchangeable, the competitive pressure between them may be much weaker than appearances suggest.

On geographic market definition, the Report calls for an approach grounded in actual consumer behaviour and local realities rather than theoretical assumptions about how far people are willing to travel. Shopping patterns vary significantly by product category: food and pharmacy purchases tend to be relatively local, while clothing, electronics, and household goods draw consumers further afield, often to the nearest town or urban centre. Rural consumers generally travel longer distances than township consumers, but this may reflect the absence of local alternatives rather than genuine competitive integration across wider areas. Transport realities matter as well: in many categories, minibus taxis are the dominant mode of transport, and walking remains important for routine local purchases. The Report argues that practical catchment areas in rural settings are often wider than standard competition analysis would assume, and that any assessment must be sensitive to the specific product category and the real-world constraints that consumers face.

What Comes Next

The Report is explicitly forward-looking.

• First, the Commission intends to address the regulatory and administrative red tape by considering structured engagements with municipalities, South African Local Government Association (SALGA), the DTIC and Department of Small Business Development (DSBD) and other governmental organisations, with a view to identifying the regulatory burdens which can be simplified, standardised or better supported.
• The Commission further signals its intention to pursue follow-on work in several directions engaging with stakeholders across the retail, supply, distribution, and e-commerce value chains; and cooperating with other government bodies, municipalities, provincial departments, the DTIC, and the DSBD among them  to widen access to formal retail and digital channels for smaller firms .
• The Report does not shy away from the possibility of enforcement action. It identifies specific categories of conduct, exclusionary access to retail channels, discriminatory procurement conditions, and supply arrangements that disadvantage smaller or HDP-owned firms, that may form the basis for market conduct investigations.
• Moreover, the Commission has now signaled that it would be looking into prioritising procurement and upstream access and even making provision for competition conditions aimed at addressing service delivery and infrastructure,

For any organisation with a presence in or connection to township and rural markets, the Report warrants careful attention. In essence, the Report provides the Commission with a rich empirical foundation, a clear analytical framework, and an evident appetite for follow-through. Whether the practical impact will be felt primarily through enforcement, through policy reform, or through a combination of both, the direction of travel is unmistakable: the Commission intends to bring a sharper, more evidence-based focus to competition in some of South Africa’s most economically significant, and historically neglected communities.

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The franchising industry has long been a bone of contention at antitrust authorities worldwide. Franchisees often complain to competition regulators about their treatment by franchisors. However, in South Africa no such complaints have as yet resulted in finalised enforcement activity by the Competition Commission. This may soon change. On 26 June 2026, the Commission published draft Terms of Reference (“ToR“), signalling its intention to launch a market inquiry into the franchise sector in South Africa (“Market Inquiry“).

Reasons for the market inquiry

The Market Inquiry stems from the Commission’s belief that there are market features that may impede, distort or restrict competition in the South African franchise business market. In addition, the Commission has observed a rising number of mergers and acquisitions in well-established franchise sectors which, it says, gave rise to concentration in those sectors. This bulletin analyses the rationale driving the Commission’s latest regulatory intervention and outlines what this could potentially mean for franchisors and franchisees operating in South Africa.

The Competition Act 89 of 1998 empowers the Commission to conduct a market inquiry if it believes that certain features or a combination of features in a market for any goods or services impede, distort or restrict competition within that market. The Commission may also initiate a market inquiry to fulfil the objectives of the Competition Act. The ToR intimates that the Market Inquiry is anchored in the public interest objectives of the Act, which mandate:

• ensuring that small and medium-sized enterprises (“SMEs“) have a fair chance to participate in the economy; and
• promoting a greater spread of ownership, especially by increasing the ownership levels of historically disadvantaged persons (“HDP“) in firms in the market. [1]

Consequently, the purpose of the Market Inquiry is to assess whether current franchising models act as a barrier to entry, growth, or expansion for SMEs and HDPs in the South African economy.

Features in the franchise sector believed to be impeding, distorting or restricting competition

In the ToR the Commission highlights several systemic features within the franchise market that it believes may stifle competition. These include the following:

• Participation in the franchising sector is not yet proportional or reflective of the broader demographic South African landscape, limiting the overall impact on economic inclusivity and transformation. The Commission noted that the franchise sector still reflects skewed racialised patterns of ownership.
• Power balances between franchisors and franchisees. In particular, the Commission has received numerous complaints that franchisees are subjected to restrictive and potentially exploitative practices by franchisors, who exert control over their operations and supply chains.
• Franchisees lack bargaining power during the negotiation of franchise agreements.
• Limitations caused by franchise funding requirements imposed by franchisors or credit financiers. This can be through the requirement of upfront significant capital contributions.
• Franchisors imposing unfair trading terms and conditions on franchisees.
• Exploitation of information asymmetries between franchisors and franchisees.

Accordingly, the Market Inquiry will examine whether and to what extent the abovementioned features exist and, if so, whether they have an adverse effect on competition in the market. Of relevance, franchisors and franchisees should expect probing by the Commission into the above features and may be required to respond to one or more written information requests. They may also be called upon to make oral presentations regarding their businesses at various public and private hearings.

Scope of the Market Inquiry

The Market Inquiry’s focus is expected to be on three broad themes, including (a) finance, funding and terms and conditions of franchise operations; (b) franchise agreements’ terms and conditions and practices; and (c) exploitation of information asymmetries.

The Commission further indicates in the ToR that it may focus the Market Inquiry on sectors that appear to have greater potential to influence market dynamics, and has identified the following categories or areas of interest:

Fast Food: This refers to fast food restaurants chains. Examples include Chicken Licken, KFC, Kauai, McDonalds South Africa, Barcelos Flamed Chicken, Roman’s Pizza, Pizza Perfect.

Construction: This refers to construction and hardware stores. Examples include Italtile Retail, CTM, Talisman Hire, Mica Investments.

Automotive: This refers to automotive stores offering parts and car services such as brake pad replacement, wheel bearing repairs and wheel changes. Examples include Midas, Hi-Q Automotive, HJ Bosch & Sons Panel Beaters, PG Glass, Battery Clinic and Super Quick.

Grocery: This refers to grocery stores. Examples include Pick n Pay, Spar, Food Lovers Market, Shoprite Holdings (via OK Franchise division).

Fuel Stations: This refers to the grocery and fast-food stores located within fuel stations. Examples include convenience stores and quick-service restaurants at Engen, Astron, Shell and BP forecourts.

Health and Beauty: This refers to health and beauty stores. Examples include Legends Barbershop, Revive Herbal Health and Sorbet.

Timelines

The public is invited to submit comments on the draft ToR by 7 August 2026. The Commission is also expected to publish a final ToR. Within 20 days after the publication of the final ToR, the Commission is expected to commence with the Market Inquiry, with a deadline for completion being within 18 months thereafter. However, this timing is probably ambitious, given the broad scope of the Market Inquiry, touching as it does on a multitude of business activities and market players.

Conclusion

The launch of the Market Inquiry may herald a seismic shift for the South African franchising landscape. Historically, market inquiries have resulted in binding, highly disruptive remedial actions, including forced changes to long-standing corporate business models.

It can be expected that many franchisees, particularly SMEs and HDPs, will make use of this public platform to make their grievances heard regarding pricing, one-sided contract terms and funding difficulties.

For certain franchisors, their standard operating models may come under threat. We expect that strict supply chain exclusivity clauses, mandatory procurement systems and rebate structures will be subjected to intense scrutiny. It would be advisable for franchisors to proactively audit their existing franchise agreements and operational policies at this early stage, to ensure that their houses are in order when the Commission comes knocking.

[1] A historically disadvantaged person for the purposes of the Competition Act is defined as: (a) one of a category of individuals who, before the Constitution of the Republic of South Africa, 1993 (Act No. 200 of 1993), came into operation, were disadvantaged by unfair discrimination on the basis of race; (b) an association, a majority of whose members are individuals referred to in paragraph (a); (c) a juristic person other than an association, and individuals referred to in paragraph (a) own and control a majority of its issued share capital or members’ interest and are able to control a majority of its votes; or (d) a juristic person or association, and persons referred to in paragraph (a), (b) or (c) own and control a majority of its issued share capital or members’ interest and are able to control a majority of its votes.

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Key implications of the proposed amendment to the procedure that will be followed by the Competition Commission when firms subject to merger conditions (“merged entities“) are believed to have breached those conditions.

Introduction

Rule 39 of the Competition Commission’s Rules sets out the process to be followed by the Commission if it has information indicating that firms (“merged entities“) which were given conditional merger approval have failed to comply with the merger conditions. On 6 May 2026, the Minister of Trade, Industry and Competition published, for public comment, a notice proposing to repeal the current Rule 39 in its entirety and replace it with a new rule.

In summary, the proposed amendment is a mixed development: it introduces a more structured and transparent procedure but simultaneously increases the evidentiary and compliance burdens on merged entities.

The current rule

Under the current Rule 39, there is no express provision for the Commission to conduct a formal investigation into possible non-compliance with merger conditions. However, where it appears to the Commission that a firm has breached a merger condition, the Commission must issue a “Notice of Apparent Breach”. The merged entity then has 10 business days either to submit a remedial plan or to request the Tribunal to review the Notice on the ground that it has “substantially complied” with its obligations. The textual language indicated that this is a review. A review involves challenging an administrative decision (or other exercise of public power) on the basis that it was not rational, reasonable, or procedurally fair. This is different from an appeal, where the question would be whether, on all the facts, the Commission was correct or incorrect. However, in Coca-Cola, [1] the Constitutional Court held that this is not an ordinary administrative-law review but a “special statutory review“, the single permissible ground being whether the firm has substantially complied, based on an objective enquiry by the Tribunal into actual, not merely apparent, breach.

Key changes under the proposed rule

Investigation and finding before any notice

The proposed rule replaces the Notice of Apparent Breach with a “Notice Requesting Compliance”. However, before issuing a Notice Requesting Compliance, the Commission must conduct an investigation into whether a breach has occurred. This is a significant procedural improvement, affording the merged entity a meaningful opportunity to engage with the Commission before any formal notice is issued. The merged entity would therefore need to be informed by the Commission of the investigation and to provide information and documents requested by the Commission. In that process, the merged entity has the opportunity to provide additional information if it believes it will assist its case and to make representations that no breach has occurred, all in the context of a formal investigation.

In contrast, under the current rule a party that receives a Notice of Apparent Breach is immediately placed under pressure, within 10 business days, either to bring review proceedings to the Tribunal on the grounds that it has substantially complied with the conditions or propose a remedial plan. The new power to investigate is discretionary (“may”), so the Commission retains flexibility, but the investigation is a procedural prerequisite to any further action.

An additional benefit to merged entities is that the Commission must make a finding that there has been a breach of a merger condition. The Commission can no longer issue a Notice on the basis of only an “apparent” breach. We expect that the Commission will be more careful to ensure it weighs all the relevant facts before issuing a Notice under the proposed rule.

Timelines

The current rigid 10-business-day response period (triggered by the Notice of Apparent Breach) is removed under the new rule. Instead, in a Notice Requesting Compliance, the Commission will stipulate the period for compliance or for submission of a remedial plan. While the Commission could in theory set the same 10 business day (or a shorter) deadline, the Commission is, in our view, more likely to set a deadline that is reasonable based on the particular facts and circumstances. Furthermore, the formal investigation phase will likely result in merged entities having better notice before the Commission makes a decision. In most cases, merged entities will likely be in a better position to prepare, as typically one can get a sense of the direction in which the Commission is heading during an investigation. Currently, the lack of a formal investigation as a prerequisite can result in the Commission issuing a Notice of Apparent Breach with little (and sometimes no) advance notice.

Adversarial proceedings before the Tribunal

Under the current rule, the merged entity’s recourse is a statutory review of a Notice of Apparent Breach, which need not be accompanied by an affidavit or other supporting document setting out the Commission’s findings and conclusions. While the Constitutional Court held that the Commission should provide sufficient information for the merged entity to “appreciate the nature of the breach complained of”, under the proposed rule the Commission may apply to the Tribunal for an order compelling compliance, and the firm is expressly entitled to oppose that application. The Commission’s application will need to be brought under Tribunal Rule 42, which is a general provision for proceedings not otherwise specifically provided for. That rule requires the applicant (in this case, the Commission) to bring the application supported by an affidavit setting out the “facts on which the application is based“. While the reverse onus (discussed immediately below) is problematic, the Commission will only be able to take the matter forward with an affidavit setting out its findings for why it believes a merger condition has been breached. The merged entity will have the opportunity to assess the Commission’s full case.

Reverse onus

So far, the amendments summarised above are favourable. Unfortunately, sub-rule (6) provides that the firm bears the onus of proving that it has complied with the merger condition. This is not framed as a rebuttable presumption but as a full transfer of the burden of proof to the merged entity. The constitutionality of this provision is questionable but, unless changed in the final rule or successfully challenged, this is where the first significant concern for businesses arises. It is heavily burdensome because the rule purports to shift the entire onus to the respondent, whereas in other matters where a burden is shifted from the applicant to the respondent, it is typically either no more than a presumption that needs to be rebutted by the respondent, or the applicant must, at minimum, first make out a prima facie case. Indeed, in settling the special statutory review standard under the current rule, the Constitutional Court held that if the merged entity makes out a prima facie case of substantial compliance, the evidential burden of rebuttal shifts to the Commission. The Court also referred to the Commission’s “exceptionally wide” investigative powers, stating that this provided the Commission with “more than adequate tools… to gather evidence to satisfy a burden of rebuttal“. It is hoped that the proposed amendment to impose a full onus on the merged entity – which will, after all, be a respondent in the proceedings – is not retained in the final amended rule.

Removal of the concept of “substantial compliance”

Under the current rule, merged entities can succeed in overturning a Notice of Apparent Breach by demonstrating substantial compliance with the merger conditions. The proposed amended rule replaces this with the requirement that the merged entity must “comply” with a Notice Requesting Compliance or succeed in proving to the Tribunal that it “has complied”. This appears to require absolute compliance (subject only to the common law principle of de minimis, in terms of which a trivial non-compliance ought not to be actionable by the Commission). For entities operating under complex or prescriptive conditions, this shift represents a meaningful increase in risk.

Engagement and remedial plans

Notwithstanding the increased burdens, the proposed rule establishes a more meaningful engagement process at both the investigation stage and the remedial plan stage. In practice, one would expect the Commission to engage constructively before launching Tribunal proceedings and to work collaboratively on remedial plans, particularly where the firm has demonstrated good faith.

Conclusion and practical guidance

 The proposed amendment is a mixed development. It provides procedural clarity, a meaningful opportunity to engage with the Commission before any notice is issued, and a requirement that the Commission bring an application to the Tribunal to commence adversarial proceedings. However, the reverse onus and the removal of the substantial compliance standard materially increase the burden on merged entities.

Firms subject to merger conditions should consider the following practical steps.

• Conduct a detailed review of all outstanding merger conditions to assess whether current compliance efforts achieve full, actual compliance, not merely substantial compliance.
• Ensure that comprehensive records of compliance are maintained, given that under the proposed rule the evidentiary burden of proving compliance will fall on the merged entity in any Tribunal proceedings.
• Consider whether to submit – or ensure that your industry association or similar body submits – written comments on the proposed amendment by the 17 June 2026 deadline, particularly in relation to the reverse onus provision and the removal of the substantial compliance standard, both of which may have a material bearing on the firm’s position.
• Finally, firms that are currently the subject of any investigation or engagement with the Commission in relation to merger conditions should take stock of how the transition to the new rule may affect any ongoing processes.

[1] The nature of that review was settled by the Constitutional Court in Coca-Cola Beverages Africa (Pty) Ltd v Competition Commission [2024] ZACC 3 (“CCBA“)

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South African companies often introduce Employee Share Ownership Plans (“ESOPs“) for a variety of reasons. Through an ESOP, workers acquire shares in the firm in which they are employed without incurring an upfront cash outlay, entitling them to dividends and/or capital gains in their employer. Structuring an ESOP gives rise to complex legal, tax, accounting, and industrial relations questions. In recent years, the provisions of the Competition Act 89 of 1998 (“Competition Act“) also come into play when ESOPs are introduced in the context of obtaining merger approval from South African competition authorities. In this context, a new study from the Competition Commission (“Commission“) deserves attention.

Publication of the Commission’s ESOP Impact Study

On 29 April 2026, the Commission published an impact study titled Employee Share Ownership Plans (ESOPs): An Analysis of Key Design Principles to Create Value for Beneficiaries and Firms (”Study”). The Study examines fifteen ESOPs implemented during the period FY 2019/2020 to FY 2022/2023. These ESOPs were mandated as merger conditions following the inclusion of section 12A(3)(e) into the Competition Act.

In summary, the Study evaluates the current design framework of ESOPs, assesses the financial implications of different funding models, and proposes recommendations intended to improve ESOP outcomes for beneficiaries and firms alike.

This article outlines the key findings and recommendations of the Study, with a view to assisting merging parties in understanding how the Commission is likely to approach the evaluation of proposed ESOPs in future merger proceedings.

Background

In 2019, various amendments to the Competition Act came into effect, including section 12A(3)(e) which is an explicit public interest ground relating to the spread of ownership. In terms of that section, the Commission and the Competition Tribunal (“Tribunal“) must, when evaluating a merger on public interest grounds, consider the effect the merger will have on the promotion of a greater spread of ownership, in particular, the increase in levels of ownership by historically disadvantaged persons [1] and workers in firms in the market.

Where the Commission or Tribunal finds that a merger does not adequately achieve this, for instance, where a proposed merger would result in a dilution of existing Broad-Based Black Economic Empowerment (“B-BBEE“) shareholding, it may require an ESOP to be established in one or more of the merging parties or the merged entity.

Key Findings

1. Design principles

When a merger condition requiring an ESOP is indicated, the Commission currently provides merging parties with a template outlining key ESOP design principles. In addition, guidance on ESOPs can be found in the Commission’s 2024 Revised Public Interest Guidelines which provide that an ESOP must hold a minimum range of 5% to 10% of the equity of a merging party or merged entity and must represent a broad base of workers – as opposed to a few highly skilled workers. The Study found that while the current template addresses certain fundamental elements, it leaves considerable design scope to the implementing firm – a discretion which can materially affect both the extent to which workers benefit and the cost to shareholders of implementing the ESOP.

The Study also found that ESOP beneficiaries frequently lack a clear understanding of how ESOPs function, and that beneficiary-nominated trustees often lack board representation and fiduciary competencies needed to meaningfully represent workers’ interests.

2. Funding and financial sustainability

A significant concern identified by the Study relates to the prevalent ESOP funding model. Of the fifteen ESOPs examined, eleven were funded through notional vendor finance (”NVF”). Of those eleven, interest was charged on the “debt” in respect of six of the ESOPs.

Where an ESOP is funded through NVF or a cash loan, the ESOP incurs a debt that must be settled over time. When the firm declares a dividend, the portion attributable to the ESOP’s shareholding is not paid in full to beneficiaries; instead, it is split between a payment to beneficiaries (also known as a “trickle dividend”) and a payment towards the outstanding debt. The ratio of this split varies among ESOPs: some allocate a higher portion to debt repayment with a smaller amount distributed to beneficiaries, or vice versa. The trickle dividend ratio is therefore a critical design variable – one that directly affects both the speed at which the debt is repaid and the quantum of income beneficiaries receive in the interim.

The Study found interest-bearing funding models to be especially problematic given that NVF, by its very nature, is a notional loan rather than an actual cash loan. Consequently, the charging of interest on an NVF debt is, in the Commission’s view, not warranted.

Since ESOPs funded with interest-bearing debt typically rely on dividends declared by the firm to service that debt, the Study found that, in most cases, dividends received by the ESOP are insufficient to cover the full interest charge for a year, resulting in the capital loan amount not being reduced. In the instance when no dividend is declared at all, the debt accumulates perpetually. In both scenarios, beneficiaries receive little to no dividend income. The implication, according to the Study, is that there is a gap between the transformative policy intent of ESOPs and their current outcomes.

The Study’s Recommendations

1. Financing the ESOP

The Study recommends that interest should not be charged on NVF as it makes ESOPs financially unsustainable. It further recommends that where discounts (ordinarily offered in the open market) and favourable terms to purchase shares offered as part of employer executive incentive schemes are available, similar discounts and incentives should be extended to the purchase price of the ESOP’s shareholding.

The Study explains that discounts would reduce the initial value of the ESOP debt. The Study identifies four categories of discounts that should be considered: (i) a minority discount (to compensate for the lack of control an ESOP has, given its small shareholding in the firm); (ii) a marketability discount (applicable to private firms to compensate the ESOP for its inability to swiftly convert shares into cash and for incurring administrative costs when doing so); (iii) a lock-in period discount (this relates to the number of years workers would be locked into the ESOP and restricted from selling or transferring ESOP shares to parties outside the firm); and (iv) a discount reflecting the B-BBEE points gained by the firm from having an ESOP as a shareholder.

The Study illustrates, through a series of financial scenarios, the impact that different funding approaches can have on both the value of an ESOP’s debt and the dividend income received by beneficiaries over time. The modelling suggests that where interest-free funding is combined with discounting of the purchase price and actual annual payment of dividends, beneficiaries are more likely to receive meaningful dividend income, as debt is reduced more rapidly under such conditions.

2. Proposed mandatory design principles

The Study recommends that the following design elements be expressly included and specified in ESOPs –

• a specified implementation date;
• in respect of the structure of the ESOP, it must stipulate whether it will be established as a trust or a company. In either case, the ESOP should be established as a unitised structure whereby qualifying workers receive units rather than directly holding shares in the firm. The percentage shareholding to be held by the ESOP in the merging party or merged entity at the implementation date must also be specified;
• workers must not be required to pay to participate in the ESOP (i.e. merging parties must cover the costs associated with the establishment of the ESOP);
• the funding model must be specified (NVF, cash loan or full grant/donation) as well as the trickle dividend ratio;
• in respect of governance, the ESOP employee representatives should be entitled to nominate a director to the board of the firm in which the shares are held. Furthermore, the Study recommends that the ESOP, if structured as a trust, should appoint trustees (individuals nominated by the beneficiaries and the firm) to manage and administer the trust on behalf of the beneficiaries. The ESOP trustee composition should consist of either an equal number of beneficiary and firm-nominated trustees or, a majority of beneficiary-nominated trustees. Additionally, any costs associated with the operation of the board of trustees should be borne by the merged entity;
• the qualifying criteria for participation, such as the number of years worked and/or employee grade should be stipulated (with the exclusion of top/senior management of the firm), including the treatment of “bad leaver” events (e.g. resignations or dismissals) which would result in beneficiaries ceasing to participate in the ESOP;
• the participation benefits (e.g. dividends and/or capital gains) which beneficiaries can expect to receive should be clearly set out;
• mandatory training should be provided for beneficiaries, at no cost to the workers, covering the functioning of the ESOP, the terms of the ESOP trust deed and the tax implications of dividends received;
• more detailed legal and financial training should be provided for all ESOP trustees (at no cost to workers) in respect of the operation of the ESOP; and
• finally, a dispute resolution mechanism should be included to deal with potential disagreements between the merging parties and any independent legal or financial experts in relation to the reasonableness of fees/costs.

While the proposed design elements are more extensive than the Commission’s current template, they are less prescriptive to some extent. [2]

3. Design principles to be determined in consultation with workers

If an ESOP is anticipated, the Study recommends that the following design principles are determined in consultation with Workers, Worker Forums or Trade Unions before the merger is notified to the Commission. This is to prevent the ESOP being designed entirely by the parties with no worker input.

These include the duration of the ESOP (evergreen, buyback or hybrid), distribution of the trickle dividend, the class of shares to be issued, and the placement of the ESOP at either holding company or subsidiary level.

Duration of the ESOP

Duration is one of the most consequential design choices for an ESOP, as it determines how long the scheme will be in existence and whether beneficiaries will receive dividends, capital gains, or both. The Study identifies three duration models but does not recommend a particular one:

• An evergreen model. This model is intended to operate indefinitely, allowing new workers to continuously participate as they meet the qualifying criteria. While beneficiaries receive a steady stream of dividend income, they do not benefit from any appreciation in the value of the shares owned by the ESOP.
• A buyback model. This model, by contrast, operates for a fixed period – typically five years – after which the firm repurchases the shares and the ESOP is dissolved. This model allows beneficiaries to receive dividends during the life of the scheme and capital gains at the point of buyback.
• A hybrid model. This model combines elements of both the evergreen and buyback models. Under this model, a portion of the ESOP shares is bought back by the firm after a certain period, with the proceeds used to settle the outstanding debt. The remaining shares are then retained under an evergreen model, allowing the beneficiaries to continue receiving dividends on that portion of the ESOP’s shareholding going forward.

Phantom ESOP schemes

Merging parties should be aware that the Commission’s focus, both in the Study and in the Revised Public Interest Guidelines, is specifically on equity-based ESOPs that confer actual share ownership on worker beneficiaries. The Study itself expressly states that it does not evaluate alternative structures such as profit sharing schemes.

Under a phantom scheme, employees receive notional or ‘phantom’ shares that track the value of real shares and provide financial benefits linked to share price performance, but do not constitute actual share ownership. Employees therefore do not become shareholders in the firm, do not acquire voting rights, and do not receive dividends in the conventional sense.

Whilst phantom schemes have been employed in at least two cases that we are aware of, it is not clear that the Commission will regard them as meeting the requirements of section 12A(3)(e) of the Competition Act.

Placement of the ESOP

The Study recommends that positioning the ESOP at the operating subsidiary level may better incentivise workers, as their contribution is directly linked to that entity’s profitability. However, where the subsidiary is not performing well, placement at corporate group level may be preferable to ensure beneficiaries can still receive dividends if the group is profitable overall, despite the subsidiary’s poor performance.

Leavers from the ESOP

The Study further recommends that the definition of “good leaver” and “bad leaver” be determined in consultation with workers. In particular, firms should consider paying exiting beneficiaries regardless of their reason for exiting the firm. Beneficiaries who are retrenched, pass away, retire, or are permanently incapacitated or disabled should be treated as good leavers and receive 100% of their entitlement, while workers who resign or exit pursuant to a mutual separation agreement (commonly referred to as “bad leavers”) should receive a pro rata payment. Notably, the Study does not prescribe the applicable pro rata percentage for bad leavers, leaving this to be determined in consultation with workers.

Alternative debt-reduction mechanisms

Lastly, the Study recommends that the ESOP consider alternative mechanisms to reduce the ESOP’s debt such as (i) the purchase of additional shares in the firm which can be sold at a later stage when share prices appreciate; (ii) the purchase of shares in other companies from which income can be derived, or (iii) the undertaking of investments such as exchange-traded funds and fixed income investments.

Conclusion

The Study is the Commission’s most detailed and comprehensive pronouncement to date on what constitutes an effective and sustainable ESOP from a competition enforcement perspective. While the Study’s recommendations are not legally binding, the Study provides a clear signal of the standard against which the Commission is likely to measure proposed ESOP conditions in future mergers. Merging parties that engage with ESOPs as a substantive ownership remedy to comply with section 12A(3)(e) of the Competition Act, and structure them in accordance with the principles outlined in the Study, will be better placed to achieve merger approval efficiently.

Should you require advice on the structuring and implications of an ESOP, please feel free to contact any of the members of the Werksmans Competition Practice Area.

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South Africa’s Minister of Trade, Industry and Competition has, in a notice, published revised merger notification thresholds and filing fees under the Competition Act 89 of 1998 (“Competition Act“), effective 1 May 2026. The updated thresholds raise the turnover and asset values that determine whether a transaction is classified as a small, intermediate, or large merger, meaning that some deals which previously required mandatory notification may now fall below the filing threshold. At the same time, the filing fees payable on intermediate and large merger notifications have been increased. These changes will be relevant to any business contemplating M&A activity with a South African dimension from 1 May 2026 onwards.

What has changed?

Merger notification thresholds

The Competition Act requires parties to notify the Competition Commission (“Commission“) of mergers that meet prescribed turnover and asset thresholds. These thresholds have been adjusted upwards as set out in the table below; the underlying calculation methodology, which tests the combined position of the acquiring and transferred firms as well as the position of the transferred firm alone, measured “in, into or from” the Republic, remains unchanged.

In broad terms, the classification works as follows:

• a transaction that falls below either limb of the lower threshold is a small merger and is not subject to mandatory notification;
• a transaction that meets both limbs of the lower threshold but falls below either limb of the higher threshold is an intermediate merger, notifiable to the Commission; and
• a transaction that meets both limbs of the higher threshold is a large merger, notifiable to both the Commission and the Competition Tribunal (“Tribunal“).

Filing fees

The fees payable on filing a merger notification have also been increased, as follows:

Effective date

Despite the notice being published on 8 May 2026, both the revised thresholds and the new filing fees take effect retrospectively from 1 May 2026. The notice does not include any transitional provisions, so the new regime will apply to notifications lodged on or after that date.

Practical implications for clients

Notification obligations

The increase in the lower thresholds is substantive, the combined threshold has risen from R600 million to R1 billion, and the transferred firm threshold has doubled from R100 million to R200 million. Transactions that would previously have been classified as notifiable intermediate mergers may now fall below the lower threshold and qualify as small mergers exempt from mandatory notification. Conversely, the uplift in the higher thresholds from R6.6 billion to R9.5 billion (combined) and from R190 million to R280 million (transferred firm) means that some transactions previously classified as large mergers may now fall into the intermediate category, with corresponding procedural and timing benefits.

Deal structuring and timetabling

For transactions currently in the pipeline, parties should reassess their merger control analysis against the new thresholds. Where the revised thresholds affect a deal’s classification, there may be implications for whether the transaction requires notification to the Commission, alternatively notification to the Commission and approval by the Tribunal, the anticipated review timeline, and the overall transaction timetable.

But more important at this moment in time, since the new thresholds came into operation on 1 May 2026, filing fees could very well be refundable or deal teams should expect an amended invoice!

Transaction budgets

The increased filing fees, R220,000 for an intermediate merger and R735,000 for a large merger, should be factored into transaction cost estimates for deals expected to be notified from 1 May 2026 onwards.

Retained call-in power

It is important to remember that even where a transaction falls below the mandatory notification thresholds and is classified as a small merger, the Commission retains the power to require notification within six months of implementation. Parties to transactions that narrowly fall below the new thresholds should continue to assess whether a voluntary notification may be prudent.

Contact us

If you have any questions about how these changes may affect a planned or ongoing transaction, or if you would like assistance with a merger notification assessment, please contact a member of our competition team. We would be happy to assist.

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In a recent case, the Competition Tribunal clarified its approach regarding the imposition of conditions for a merger approval relating to the ownership of historically disadvantaged persons (“HDPs“).

1. In terms of the South African Competition Act, a merger must be assessed by the Competition Commission having regard to its effect on competition as well as on certain specified public interest grounds including the effect of the merger on the promotion of a greater spread of ownership and in particular to increase the levels of ownership by historically disadvantaged persons (“HDPs“) and workers in firms in the market.

2. The Commission’s Revised Public Interest Guidelines Relating to Merger Control (“Guidelines“) provide that the Commission considers that merging parties have a “positive obligation” to promote or increase a greater spread of ownership and that the Commission’s analytical starting point is that all mergers are required to promote a greater spread of ownership. The Guidelines state that where a merger does not do so, the Commission will consider ownership remedies.

3. The imposition of ownership remedies is a highly sensitive commercial issue. The approach set out in the Guidelines is very wide and causes uncertainty especially for mergers which do not result in a decrease in (or otherwise negatively affect) ownership by HDPs and workers. Even though ownership conditions are not imposed on all mergers in practice, it is important that the Commission and Competition Tribunal establish clear and certain precedents on ownership remedies.

4. The recent Competition Tribunal decision in the merger involving CP Spruce Holdings, S.C.SP and the Vantive kidney care segment of Baxter International Inc. is helpful. Important facts were –

• The merging parties were based in Luxembourg and the USA and did not have any shareholding by HDPs
• None of the merging parties had any subsidiaries, branches, offices or production activities in South Africa
• Vantive was only active in South Africa through the sale of its products to a third party. Such third party had a 29% HDP shareholding and a Level 1 Broad-Based Black Economic Empowerment rating
• CP Spruce was only present in South Africa through its investment portfolios
• Less than a certain (unspecified and confidential) percentage of Vantive’s global turnover was derived from South Africa
• The merger was a “foreign to foreign” transaction with only a tangential link to South Africa
• No horizontal or vertical overlap existed between the merging parties and the merger raised no competition concerns in South Africa.

In line with the approach set out in the Guidelines, the Commission had requested the merging parties to consider ownership remedies or propose “other equally weighty remedies that would adequately countervail the lack of promotion of ownership by HDPs or workers”. The merging parties however submitted that this was not warranted having regard to the above facts and the Commission found that no further intervention was necessary. The Competition Tribunal agreed with the Commission and did not impose an ownership condition.

5. The above approach of the Commission and Tribunal is to be commended for bringing some certainty to the approach regarding ownership conditions with regard to “foreign to foreign” mergers. Requiring ownership conditions for such mergers is inappropriate.  However the approach to other mergers also needs clarification.  It is instructive that in the CP Spruce/Vantive case, the Tribunal found that the merger would have no “negative effect” on the other public interest grounds set out in the Competition Act.  It accordingly seems inappropriate to require an ownership condition if a merger has no negative effect on ownership by HDPs or workers and this would be inconsistent with the Tribunal’s approach to the other public interest grounds.  Furthermore the Competition Act does not impose a “positive obligation” on merging parties to promote or increase a greater spread of ownership and the Guidelines are not legally binding.

6. Where HDPs or workers sell their shares, HDP and worker ownership will necessarily decrease unless the buyers are HDPS or workers. The 2021 Burger King merger was initially prohibited by the Commission because HDP ownership decreased from 68% to 0%. The merger was subsequently approved subject to a condition that an employee share ownership program would acquire an “effective 5% interest” in the merged entity. Imposing a compensatory ownership condition may however negatively affect the price and the ability of HDPs and workers to exit their investment. Even where HDP or worker ownership decreases, ownership conditions should be carefully considered on a case by case basis and not apply automatically.

7. It is important that merging parties have certainty on the circumstances where ownership conditions may be imposed.  The approach in the Guidelines does not achieve this.  A more nuanced approach to sales by HDPs and workers and clearly excluding “foreign to foreign” mergers and mergers with no negative effect on HDP and worker ownership would greatly assist merging parties (and their advisors) when considering and negotiating their transactions.

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We are not in the habit of writing breathless technology briefings. That is not our role.

But the industrial reorganisation now underway around artificial intelligence is arguably the most consequential structural shift for competition policy since the rise of the digital platform economy in the 2010s. It is also submitted that in some respects it is more challenging, because it is happening faster, across more sectors simultaneously, and with a degree of vertical integration that makes traditional market definition genuinely difficult.

After studying the PitchBook’s December 2025 AI Outlook: The Great Competition Wars Have Begun [1], a research report analysing various sectors, presenting unusually granular evidence of where capital, market share, and M&A activity are concentrating, we deemed it of sufficient insight to pen this article.

Our aim with this thought piece is to equip boards, general counsel, and deal teams with a clear assessment of where the competition law risk actually lies, not where the headlines suggest it does.

The Shape of the Problem: Who Controls What, and Why It Matters

The AI economy is not one market. It is a stack, and competition concerns differ sharply depending on which layer you occupy.

At the base sits the compute and datacentre layer, where the global build-out for AI infrastructure is approaching one trillion dollars annually. That figure alone tells us something important about barriers to entry: this is not a market that a well-funded startup can meaningfully contest from scratch. The capital requirements are enormous, the lead times for power and cooling infrastructure are measured in years, and the physical constraints, grid capacity, permitting, energy supply, are binding in ways that no amount of venture capital can overcome quickly. Clean energy integration, grid management, and distributed energy resource management are becoming necessary complements to datacentre scale, and the players best positioned to secure those inputs are, unsurprisingly, the ones who already have them.

Above compute sit the foundation models. This is the layer that, we submit, presents the most acute competition concerns. PitchBook’s data confirms what practitioners have long suspected: foundation model providers have captured the bulk of AI deal value, capital formation remains “heavily concentrated” around a limited number of large-scale model builders, and these providers are “becoming the default infrastructure for a growing share of enterprise AI workloads“.  Their scale, model performance, and integration depth give them what the report describes as “clearer business durability than most application-layer startups“.

The economic logic is straightforward and familiar from prior platform cycles: as inference becomes a recurring utility service, as workflows increase usage density, and as enterprises lock into multiyear computing platform commitments, switching costs compound and the installed base becomes progressively harder to displace.

For competition lawyers, the language of “default infrastructure” and “multiyear platform commitments” should trigger immediate recognition. These are the structural preconditions for dominance, not necessarily dominance today, but the kind of durable market power that, once established, is exceptionally difficult to unwind through ex post enforcement alone.

Above the model layer are the application, and sector-specific layers, where the dynamics differ but are no less important. Here, the PitchBook analysis reveals a pattern of rapid adoption by sector incumbents who are acquiring AI capabilities to defend entrenched positions, in healthcare, agriculture, cybersecurity, enterprise software, and e-commerce, among others. The competitive risk in these sectors is that AI will entrench the advantages of those who already control distribution, data, and customer relationships.

Barriers to Entry: The New Moats

We have spent years advising clients on what constitutes a durable barrier to entry. The AI cycle introduces some familiar moats in new guises, and at least one that is genuinely novel.

Data. The PitchBook report is emphatic that durable advantage in AI rests on “unique data moats” and deep integration into enterprise workflows. In enterprise SaaS, the marketing and analytics niches are “saturated with undifferentiated tools,” and the startups that lack proprietary data and workflow ownership face rapid commoditisation.  In fintech, the CFO stack exhibits the same pattern: without proprietary data, domain depth, or workflow ownership, products converge on similar automation use cases and pricing pressure erodes margins. In agtech, the major crop science companies, Corteva, Bayer, Syngenta, have built precision platforms (Granular, Climate FieldView, Cropwise) that integrate machine and imagery data at scale, creating what the report calls “the default enterprise solution” while marginalising independents that lack integration into these dominant ecosystems. These are barriers: the more data a platform accumulates over time, the more formidable they become.

Compute and energy. We have already noted the trillion-dollar infrastructure build-out. What deserves emphasis is that access to compute is not simply a function of money. GPU supply is constrained. Energy capacity is constrained. Cooling technology is still maturing. The firms best positioned to secure these inputs are those with existing data centre footprints, long-term energy contracts, and the balance sheets to make speculative capacity commitments years in advance. Building a next-generation database or vector store is described by PitchBook as “a capital-intensive R&D endeavour requiring patient, long-term capital“. Warehouse robotics deployment remains “expensive, limiting the domain to leaders such as Amazon and Walmart“.  We submit that in each instance, the barrier is not merely financial; it is also structural.

Distribution. In code generation, the dominant incumbents, Microsoft’s GitHub Copilot and Cursor, enjoy “unparalleled data and distribution advantages,” a combination that the report expects will lead to “widespread commoditization and value destruction for undifferentiated startups“. In e-commerce, answer engines and platform partnerships are re-routing product discovery in ways that advantage the owners of those channels. Across the stack, AI models are consumed via APIs, making the infrastructure to secure, monitor, and scale those interfaces “a non-negotiable, high-growth layer“.  Whoever controls the API layer controls the terms on which downstream innovation occurs, a distribution chokepoint that competition authorities will need to understand in technical detail.

Vertical Integration and the Risk of Foreclosure

The AI supply chain runs, in simplified terms, from chip manufacturers through cloud and compute providers, through model developers, down to application-layer companies and end users. At each handover point, there is a potential for vertical leverage, and the PitchBook evidence suggests that consolidation incentives are strong at every junction.

Consider the pattern across sectors:

In cybersecurity, AI protection capabilities are being rapidly absorbed by incumbent security platforms through M&A. The PitchBook report notes that the outlook for 2026 and 2027 “remains strong in aggregate, though dominated by incumbent-led acquisitions rather than by standalone startups,” and that the opportunity for independent startups “is narrowing as these features become standard across application and cloud security suites“. Once model-defence features are bundled into broader platform offerings, the incentive to disfavour third-party alternatives through licensing terms, API design, or marketplace placement is well understood in competition law.

In healthcare, second-tier AI scribe companies are expected to be acquired “at highly discounted valuations” by electronic health records incumbents or larger healthcare IT platforms. The EHR market is oligopolistic, Epic and Oracle Health dominate distribution, and the embedding of native AI scribing functions directly into these platforms creates a classic vertical foreclosure risk for independents that depend on EHR integration to reach clinicians.

In agriculture, Corteva, Bayer, Syngenta, and John Deere have vertically integrated precision agriculture platforms that connect directly to farmers, bypassing traditional retailer agronomists. Seven major retailers control approximately 60 to 90 per cent of crop input sales, and digital advisory is now embedded in the platforms of the crop majors themselves. Independent drone-based monitoring startups face what amounts to a distribution foreclosure problem: without integration into these dominant ecosystems, they cannot reach the customer base at scale.

In e-commerce, the emergence of LLM-native ad networks, the opening of Amazon’s DSP and SSP infrastructure as a service, and the shift to answer engines as the primary discovery layer together represent a rewiring of the commerce stack that incumbents are best placed to shape. Consumer-facing, domain-specific search platforms face “structural headwinds in attribution and monetization as horizontal platforms such as ChatGPT and Perplexity integrate commerce functionalities“.

At the model layer itself, the prospect of enterprises locking into multiyear platform commitments creates the most systemic lock-in risk. Where those commitments bundle compute, safety tooling, agent management, and application accelerators into a single relationship, the switching costs can become prohibitive in practice even if they are not insurmountable in theory. Volume-based discount ladders and committed-spend rebates, familiar from cloud markets, are the mechanism through which this lock-in is likely to deepen.

The self-preferencing risk is real. Where a platform owner operates at both the model layer and the application layer, or controls both the inference utility and the safety/governance stack that wraps around it, the incentive to advantage affiliated products through scheduling priority, API design, or pricing structure is obvious. These are not speculative harms; they are the same theories that have sustained enforcement in digital platform markets, transposed to a new industrial context.

Merger Control: Speed, Serial Acquisition, and the Nascent Competition Problem

We turn now to what is, in our view, the most pressing institutional challenge: whether existing merger control frameworks can keep pace with the tempo of AI-driven consolidation.

The PitchBook evidence paints a vivid picture. The report describes a “platform war” in which incumbents are “driven to acquire” point solutions to “plug immediate GenAI and security gaps,” with acquisition characterised as “the fastest route to market“.  This language matters because it describes a strategic logic, defensive ecosystem consolidation, that is precisely the kind of conduct that merger control exists to scrutinise.

Serial acquisitions are the dominant pattern in several sectors as detailed in the PitchBook report. In agtech, 2025 exits occurred “entirely through M&A” (38 transactions) and buyouts (five transactions), with zero IPOs. The acquirers are Corteva, Bayer, Syngenta, John Deere, consolidating digital and autonomous capabilities.  In cybersecurity, AI protection is undergoing rapid consolidation through acquisition by major security vendors. In healthcare, PE-owned healthcare IT companies are driving AI-capability acquisitions, with R1 RCM’s acquisition of Phare Health cited as a recent example. In enterprise software, incumbents such as GitLab and Atlassian “must acquire these point solutions to plug immediate GenAI and security gaps“.

Each of these transactions, taken individually, may fall below jurisdictional thresholds or appear competitively benign. Taken cumulatively, they can neutralise an entire stratum of nascent competition. This is the serial acquisition problem that competition authorities in the UK, EU, and US have been discussing for years but have yet to address with fit-for-purpose tools. The AI cycle may force the issue.

Kill acquisitions present a related but distinct concern. Where an incumbent acquires a startup not to integrate its technology but to prevent it from becoming a competitive threat, the competitive harm is the loss of future rivalry. The difficulty, as always, is evidentiary: proving that the target would have become a meaningful competitor absent the acquisition requires counterfactual analysis that courts and regulators find inherently speculative. The PitchBook data provides at least a circumstantial basis for concern: the report repeatedly identifies sectors where startups are commercially maturing, gaining traction with enterprise customers, and then being absorbed by the very incumbents whose market positions they threaten.

We do not suggest that every AI acquisition is anticompetitive. Many will be genuinely pro-competitive, accelerating diffusion and enabling product improvement. But the industrial dynamics documented in the PitchBook report, defensive acquisition strategies, ecosystem lock-in, and serial consolidation by a small number of strategic buyers, provide a strong case for authorities to invest in improved monitoring, refined nascent competition tools, and the willingness to deploy interim measures where integration risks creating irreversible structural harm.

Sector-Specific Flashpoints

The competition risks are not uniform across the economy. Some sectors warrant particular attention, either because AI adoption is especially rapid or because the pre-existing market structure amplifies concentration dynamics.

Healthcare. The combination of oligopolistic EHR incumbents, regulatory barriers to entry, high switching costs, and the foundational nature of ambient scribe technology creates a high-risk environment for vertical foreclosure. The anticipated absorption of independent scribe companies into EHR platforms will concentrate the clinical workflow layer around a very small number of providers. In medtech, AI-powered imaging and smart implants are gaining traction, and incumbents are already acquiring remote monitoring platforms, Philips acquiring BioTelemetry, UnitedHealth acquiring Vivify Health, suggesting a pattern of vertical integration that could foreclose independent device and diagnostics innovators.

Enterprise software. The displacement of legacy analytics and BI platforms by agentic AI and natural language querying is a genuine paradigm shift, moving from dashboard navigation to conversational, in-workflow insights delivery. The incumbents that own the system of record, the CRMs, ERPs, and data warehouses that enterprises cannot easily replace, are strongly incentivised to acquire emergent AI search, compliance, and automation tools to keep customers captive. Whether that integration is conducted on open, non-discriminatory terms or through proprietary interfaces designed to lock out rivals will determine the competitive outcome.

E-commerce and advertising. The shift to answer engines as the primary product discovery mechanism is already measurable: Adobe Analytics reports a tenfold increase in referral traffic from answer engines, with Google conceding low-value queries.  As OpenAI, Anthropic, and others seek scaled monetisation, LLM-native ad networks will emerge as a logical extension of the platform, with Amazon’s and Walmart’s retail media businesses providing the template. The risk is that a small number of answer engine operators will control the default pathways for commercial traffic in the same way that search engines did in the prior era, with the same attendant risks of self-preferencing, exclusionary conduct, and opaque ranking decisions.

Agriculture. This is a sector where vertical integration is already far advanced. Corteva, Bayer, Syngenta, and John Deere between them control precision agriculture platforms, digital advisory, crop input distribution, and equipment data pipelines.  The PitchBook report states that independent drone-based crop monitoring faces value destruction risk as more than 50 competitors offer commoditised solutions while the major platforms “maintain powerful industry moats by integrating machine and imagery data at scale“.

Cybersecurity. AI protection for models and applications is both a growth market and a consolidation market. The 2025 acquisition wave, by SentinelOne, Palo Alto Networks, and other major vendors—signals sustained appetite for model-defence capabilities, with M&A identified as the most likely exit path for emerging vendors.  The bundling of AI protection into broader platform suites is efficient, but it also risks foreclosing innovative niche solutions if platform APIs or marketplace placement disfavour third-party integrations post-acquisition.

Regulatory Adequacy and Emerging Theories of Harm

We should be candid about the limits of the evidence base. The PitchBook report is an investment and industry analysis, not a regulatory assessment. It does not catalogue specific enforcement actions by the CMA, the European Commission, or the DOJ and FTC, and we have not supplemented it with external enforcement data for the purposes of discussion. Any definitive assessment of agency responsiveness would require a broader evidentiary foundation.

That said, the market dynamics documented in the report have clear implications for the adequacy of existing frameworks.

Abuse of dominance and self-preferencing. The structural features of the foundation model layer, default infrastructure status, API-mediated access, inference-as-utility pricing, and multiyear platform commitments create fertile ground for discriminatory conduct. Where a platform owner controls both the inference utility and adjacent layers (safety tooling, agent orchestration, application accelerators), selective degradation of access for rivals can effectuate a margin squeeze that is invisible in headline pricing but decisive in competitive outcome. The evolution from single-shot inference to autonomous, multistep agent workflows will create new chokepoints around scheduling, memory allocation, and tool access that do not map neatly onto existing precedent. These are novel theories of harm in form, though cognate to established non-discrimination and refusal-to-deal doctrines in substance.

Essential facilities. We raise this with appropriate caution, because the legal threshold for essential facilities claims is high in all jurisdictions. But the PitchBook evidence on compute and energy constraints, trillion-dollar infrastructure, constrained GPU supply, grid capacity limits, suggests that access terms for capacity-constrained inputs will be competitively determinative in some markets. Where a small number of vertically integrated providers control GPUs, data centre space, and on-site generation, the analytical conditions for an essential facilities enquiry may be met.

Practical Implications

For companies at bottleneck layers. If you operate at a chokepoint in the AI stack, foundation models, compute, developer platforms, EHR systems, and precision agriculture platforms, you should expect regulatory scrutiny of your API terms, bundling practices, default settings, and data-access policies. Sensible risk mitigation includes transparent, stable, and non-discriminatory API terms; documented interoperability commitments; and governance structures that separate upstream access decisions from downstream competitive incentives.

For acquirers. Serial acquisition strategies in sectors such as cybersecurity, healthcare IT, and agtech are accumulating competitive significance even where individual transactions fall below notification thresholds. Internal documents, integration planning materials, and board presentations that describe acquisitions in terms of ecosystem defence, competitive neutralisation, or market foreclosure will be discoverable and will inform the analysis. Transaction teams should be briefed accordingly.

For startups and investors. The PitchBook evidence suggests that the exit environment in many AI subsectors is overwhelmingly M&A-driven, with strategic acquirers dominating. Where the acquirer is an incumbent with an existing dominant position, the transaction will attract greater scrutiny. Founders and their advisers should factor merger control risk into exit planning earlier than is conventionally the case, particularly in sectors where the buyer universe is narrow.

Concluding Observations

We do not think the sky is falling. The existing toolkit of competition law, abuse of dominance, vertical agreements, and merger control is conceptually adequate to address the risks we have described. The theories of harm are, in most cases, familiar ones applied to new industrial facts.

What concerns us is timing. The AI cycle is moving faster than prior platform cycles, the capital commitments are larger, and the vertical interdependencies are deeper. The window between the emergence of a competitive threat and its absorption by an incumbent is narrowing, and once multiyear platform commitments, default infrastructure status, and ecosystem lock-in have taken hold, the practical scope for ex post remediation shrinks considerably.

The law is not unsettled in its principles. It is unsettled in its application to the specific industrial facts of the AI stack, inference pricing, API-level discrimination, agent orchestration, and the competitive significance of sovereign capital. These are the areas where novel theories of harm are most likely to emerge, and where early engagement with regulators, careful compliance design, and thoughtful transaction structuring will deliver the greatest returns.

Food for thought.

[1] 2026-artificial-intelligence-outlook-the-great-competition-wars-have-begun.pdf (accessed 10 April 2026)

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The debate about whether South Africa should regulate digital platforms is over. The Competition Commission has moved decisively from theory to operational enforcement, and the implications for any platform of scale doing business in the country are both immediate and far-reaching. Two landmark instruments, published within three months of one another, now define the compliance landscape: the Media and Digital Platforms Market Inquiry Final Report (the “MDPMI Report“), released on 13 November 2025, and the Online Intermediation Platforms Guidance Note (the “OIP Guidance Note“), gazetted on 6 February 2026 as a final guideline under the Competition Act.

Together, they represent a coherent, systems-based approach to platform regulation, built entirely within the existing architecture of South African competition law.

The practical consequence for leading or largest platforms is straightforward but significant: the compliance bar is no longer about reactive, case-by-case defence. It now demands proactive, evidence-backed governance across pricing parity, interoperability, self-preferencing, data use, and fairness, particularly where small and medium enterprises (“SMEs“) and historically disadvantaged persons (“HDPs“) are affected.

Two documents, one direction: enforcement as a system

It would be a mistake to treat these instruments in isolation. Read together, they reveal a regulator that is building an integrated enforcement framework.

The MDPMI Report demonstrates that a market inquiry is not, and was never intended to be, a soft policy exercise. Under the Competition Act’s market inquiry framework, the Commission is empowered to determine whether features of a market produce an adverse effect on competition, and to take remedial action accordingly, including recommending orders from the Competition Tribunal and initiating complaints based on inquiry findings. Crucially, the statutory test is whether a market feature has an adverse effect on competition, including impacts on SMEs and HDPs, rather than the more familiar threshold of a “substantial prevention or lessening of competition” applied in other enforcement contexts. That is a lower, more structural standard, one well suited to digital ecosystems where competitive harm tends to be cumulative and embedded in platform design rather than traceable to a single discrete act.

The OIP Guidance Note complements this by setting out the Commission’s view on specific categories of conduct that are likely to attract scrutiny. It is issued as a guideline and, as such, is not formally binding. However, the Commission has made clear that it will have “cognisance of this Guidance Note in assessing cases dealing with online intermediation platforms”. Anyone who has spent time in enforcement proceedings will recognise how this kind of instrument, notionally voluntary, practically determinative, shapes the course of investigations, settlement negotiations, and remedial design.

The MDPMI Report: what it signals about the Commission’s ambitions

Scope that mirrors the reality of platform power

The MDPMI was formally initiated on 17 October 2023, with Terms of Reference published in September 2023, and it spans the full breadth of how platforms interact with news media and audiences: search, social media, the adtech value chain, and the impact of generative AI. This matters because it aligns the Commission’s analytical lens with how platforms actually exert influence – not through a single product, but through interlocking layers of traffic capture, ranking, data aggregation, monetisation tools, and increasingly, AI-driven interfaces. The Commission found that major global platforms, Google, Meta, Microsoft, TikTok, X, and AI companies such as OpenAI, dominate the key gateways through which South Africans access information.

Product design and “zero-click” behaviour as competitive facts

One of the more striking aspects of the MDPMI Report is the Commission’s treatment of “zero-click” outcomes, instances where users obtain information or consume content within the platform interface rather than clicking through to a publisher’s site. The Commission treats these design choices not as neutral product improvements, but as market features capable of diverting traffic and value from downstream firms. The compliance implication is clear: the Commission is now scrutinising product design, algorithmic defaults, and interface architecture as potential sources of competitive harm, particularly when they degrade publishers, SMEs, and advertisers’ ability to monetise their content or reach audiences.

Concrete remedies, including financial interventions

The MDPMI Report does not confine itself to diagnosis. It sets out a substantial package of remedial actions, including a Media Support Package agreed with Google and YouTube valued at R688 million, which will fund national, community, and vernacular media through content licensing, innovation grants, and capacity-building initiatives. Whether one agrees with the design of these remedies or not, the lesson for platforms is instructive: market inquiry outcomes in South Africa can translate into specific, monitorable, and financially significant obligations.

Collective bargaining and the rebalancing of platform dependency

The MDPMI Report recommends that the Department of Trade, Industry and Competition issue a block exemption to enable collective bargaining by South African media over platform monetisation terms, AI content licensing, ad-tech pricing, and joint ad-sales for community media. This reinforces a broader theme running through the Commission’s recent work: in digital markets, the focus is not confined to conventional price effects. The Commission is equally concerned with structural dependency and the absence of countervailing power, particularly where fragmented suppliers face a concentrated platform gatekeeper.

The OIP Guidance Note: a conduct map for platform compliance

The OIP Guidance Note effectively consolidates six categories of conduct into a compliance baseline that leading platforms should treat as their minimum standard of internal review.

First, price parity clauses, both narrow and wide, which restrict business users from offering lower prices on their own channels or on competing platforms. Second, interoperability restrictions that limit the ability of business users to port data or integrate with competing platforms. Third, self-preferencing, including the ranking, indexing, or fee advantages a platform may accord to its own offerings over those of business users. Fourth, the use of competitively sensitive business-user data by a vertically integrated platform to advantage its own commercial operations. Fifth, differentiated trading terms across business users, including preferential visibility or sponsored listing arrangements. Sixth, unfair treatment or unfair trading terms, linked to imbalances in bargaining power and, in the South African context, to buyer power concepts.

Two aspects of the Guidance Note warrant particular attention from general counsel and compliance teams –

·         Efficiency claims must be substantiated, not merely asserted

The Commission anticipates that platforms will seek to justify contested practices on grounds of sustainability or efficiency. The Guidance Note makes clear, however, that the Commission may require financial and economic evidence to support such claims, not merely theoretical arguments. Moreover, the Commission may examine whether a platform could operate sustainably absent the practice in question, whether in South Africa or in other markets. In other words, pointing to global industry norms will not be sufficient if those norms are not demonstrably necessary in the South African context.

·         Market power assessment is qualitative and dependency-driven

The Guidance Note signals that the Commission’s approach to market power in digital and intermediation markets will look beyond traditional market definition and market share calculations. Factors such as the platform’s significance to its business users, the degree of business-user dependence, network effects, vertical integration, and the platform’s ability to harm rivals may all be considered. This is a deliberate departure from the kind of formalistic market-definition debates that, in some jurisdictions, have allowed platforms to avoid scrutiny by arguing for implausibly broad relevant markets.

The real question for platforms: not “are we dominant?” but “are we gatekeeping?”

A recurring thread across both instruments is the Commission’s focus on three structural features of platform ecosystems: dependency, where business users have no realistic alternative route to consumers; conflicts of interest, where the platform competes directly with the businesses that rely on it; and design plus rules, encompassing the contract terms, access conditions, ranking algorithms, interoperability restrictions, and data practices that collectively define the competitive environment on the platform.

The practical implication for compliance is a shift in the relevant question. The traditional inquiry – “can we win a market definition argument?” – is giving way to something more searching: what are the rules of our ecosystem, whom do they advantage, and can we defend them with hard evidence and less-restrictive alternatives?

Looking ahead: why this is not the final chapter

The architecture of the Competition Act is designed for iteration. A market inquiry can produce remedial action, which may in turn be appealed, lead to recommendations for legislative or policy change, and generate subsequent complaint proceedings. The MDPMI has already recommended inter-ministerial coordination, with the Minister of Trade, Industry and Competition committing to table the report in Parliament and take it to Cabinet. In parallel, the Commission continues to monitor compliance with the OIPMI remedies issued in 2023 across eCommerce, online travel, food delivery, app stores, and classifieds.

For platforms operating at scale in South Africa, the message is clear. Digital markets regulation is not a theoretical prospect to be monitored from a distance. It is here, it is being operationalised through competition law tools that carry real enforcement consequences, and the compliance standard it demands is one of proactive, documented, and evidence-based governance.

The businesses that recognise this early and build the necessary internal systems, across legal, commercial, product, and data teams, will be those best positioned to engage constructively with a regulator that has plainly signaled the direction of travel.

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