Chris Charter, Director in the Competition practice at Cliffe Dekker Hofmeyr says with regards to the Competition Commission’s change of conditions for the Kansai merger, that it was not unheard of for merging parties to dispute conditions that the Commission seeks to impose.

“Bearing in mind that this matter was referred to the Tribunal nearly six months ago, it’s clear the parties have been debating the conditions since then. For the Tribunal to rule contrary to the Commission’s referral is not, to my mind, an undermining of the authority but rather evidence that the process of Tribunal oversight is working,” he explains.

“What is potentially more interesting is the contention that the Commission may have based its initial findings on false or misleading information – possibly from a competitor or customer. If this is the case, it throws into stark relief one of the conundrums of the investigatory process: namely how the views of competitors and customers should be filtered. In investigating the market, the Commission will seek information from customers and competitors. This information is rarely given under oath and there can be a perverse incentive to cast aspersions on a merger – competitors in particular may see the opportunity hinder a the merging parties’ growth by acquisition. Customers too are sometimes loath to encourage mergers that even at the outside present the possibility of unilateral effects or foreclosure. This suspicion of a change in market structure can be exacerbated by the manner in which the Commission makes its enquiries – if it raises a theory of harm in a manner that begs the question (eg, What will you do if the merging parties raise prices by 5%-10%? Versus “Do think it possible that the parties can raise prices post merger?” goes to the same issue, but might get very different answers could lead to different outcomes for the investigation).

“To provide false or misleading information to the Commission in the course of an investigation is an offence under the Act. If indeed the Commission feels it was mislead, it may well end up prosecuting the source of that information. This may lead to more responsible commentary from third parties, but may also chill third parties willingness to participate voluntarily in investigations,’ he adds.

For more information:
Chris Charter, Director, Competition Practice, Cliffe Dekker Hofmeyr,
Tel: +27 (0)11 562 1053 or email: chris.charter@dlacdh.com

Andrea Collocott, Head: Marketing, Cliffe Dekker Hofmeyr,
Tel: +27 (0)11 562 1281 or email: andrea.collocott@dlacdh.com

Angela Graham, Tel: 073 505 9012 yeahwrite@worldonline.co.za

Notes:
Cliffe Dekker Hofmeyr is one of the largest commercial law firms in South Africa with some 115 directors/partners and 250 qualified lawyers located at offices in Johannesburg and Cape Town.

Cliffe Dekker Hofmeyr lawyers specialise in services covering the complete spectrum of business legal needs in 11 core areas of practice. The firm also has dedicated sector-led teams consisting of lawyers with experience in a wide range of industries and the public sector.

Cliffe Dekker Hofmeyr is the South African member firm of DLA Piper Group, an alliance of legal practices, which includes firms with offices around the globe that are affiliated to members of the DLA Piper Practice but are not themselves members of it.

Cliffe Dekker Hofmeyr's Africa practice, in conjunction with DLA Piper Africa Group, is unrivalled in terms of pan-African legal services and geographical coverage.

DLA Piper is an international legal practice with over 3,500 lawyers located in 30 countries and 69 offices throughout Asia, Europe, the Middle East and the US.

For further information, please visit www.cliffedekkerhofmeyr.com