Market inquiries have become a prominent feature of the South African competition law landscape.

Historically, the Competition Act, 1998 did not afford the Competition Commission (the“Commission”) the power to take binding remedial action. The Commission was limited to producing reports containing non-binding “recommendations” or lobbying for changes to the way business is done following a market inquiry.

Going forward, market inquiries may arguably prove more disruptive to South African business, as the Competition Amendment Act, 2018 (the “Amendment Act”), which became effective on 12July2019, now explicitly affords the Commission the power to take remedial action following a market inquiry. In terms of the Amendment Act, the Commission will now be duty-bound to consider whether or not to take action to remedy, mitigate or prevent any market feature that may restrict or distort competition in any market (that is, market features that may have an adverse effect on competition in the market). Such action may include recommending to the Competition Tribunal (the “Tribunal”) that a firm in the market be ordered to divest a portion of its business.

Unfortunately, beyond the ability to make recommendations, the Commission’s new remedial powers and the market features that engage them are defined in broad terms and do not provide much certainty regarding precisely when and to what extent the Commission may intervene in a market after a market inquiry. The Amendment Act only demands that the Commission’s remedial action be “reasonable and practicable”, taking into account a range of factors such as the nature and extent of the adverse effect on competition found by the Commission, the nature and extent and likely effect of the remedial action proposed, and the availability of less restrictive means to remedy any adverse effects on competition in the market alleged by the Commission. If dissatisfied with the Commission’s final decision, affected parties may appeal to the Tribunal (and higher appellate bodies) if necessary.