By Lerisha Naidu and Sphesihle Nxumalo
African competition authorities have collaborated closely in recent years, but the threat of de-globalisation after Covid-19 could change that, explain Lerisha Naidu and Sphesihle Nxumalo of Baker McKenzie.
With the confluence of factors including globalisation, the rise of the digital economy, the proliferation of new competition law regimes, and the increasing incidences of cross-border activity on the continent, it is unsurprising that there has been conduct over which several competition authorities have wished to exert jurisdiction.
By way of example, a recent single transaction involving GlaxoSmithKline and Pfizer has been the subject of consideration by some 20 different authorities (notified under domestic laws).
Co-operation between competition regulators, in this context, has served to foster and promote information sharing, which has the potential to lead to more enhanced analytical approaches. It has also led to the harmonisation of rules and procedures necessary for case handling, and has resulted in joint capacity-building and research activities. This cooperation has also resulted in the achievement of consistent outcomes within the context of national laws, which has increased investigative efficiency. It has also led to a reduction in the duplication of work, delays and resource-burdens for competition regulators and firms.
In this context, it is worth noting some examples of where there has been increased cooperation amongst competition regulators on the continent. The South African Competition Commission has signed memoranda of understanding (MoUs) with the competition agencies of Kenya, eSwatini, Namibia and Mauritius. Further, South Africa has signed the Southern African Development Community (SADC) MoU on inter-agency cooperation in competition policy, law and enforcement. SADC is a regional economic community comprising 16 member states.
These MoUs are a formal mechanism through which the competition agencies of these countries may cooperate on cross-border cases. In several transnational mergers, the commission has exchanged information with some of the above-mentioned agencies.
Additionally, the Kenyan competition regulator has recently interacted with Tanzanian and Zambian regulators, exchanging information in relation to matters of mutual interest, and the Mauritius competition authority has cooperated with South Africa and Seychelles through data sharing, training and knowledge sharing in investigations. Seychelles and Tanzania have also previously requested information on transnational cases from the Mauritian competition regulator.
This cooperation between African antitrust authorities has not been limited to transactional matters, and extends to cross-border investigations into anticompetitive business practices.
The question is whether such cooperation will be a feature of antitrust enforcement in a post-COVID world, where de-globalisation may be a necessary consequence of the times. Global trade is contracting and global supply chains are unravelling. A decline in foreign direct investment may therefore emerge as an unsurprising consequence of Covid-19 as firms adopt more cautious approaches to cross-border commercial activity. Instead, they will focus on bolstering domestic operations while scaling back on risky foreign operations, and are likely to concentrate on reducing lending and shedding assets to restore capital ratios and enhance liquidity.
In the context of transactional activity (and the regulation of mergers), the decline in cross-border activity may ultimately mean that fewer transactions will require multi-jurisdictional review, with competition authorities focusing instead on domestic deals.
As de-globalisation ensues, it may well be that authorities become more insular in their approaches to competition investigations, losing some of the recent gains made through their cooperation. (
— Naidu is a partner and Nxumalo an associate, in Baker McKenzie’s competition and antitrust practice in Johannesburg
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