Regulation and competition enforcement: the South African experience in health, banking, communication and ports markets

This is the submission of the Competition Commission of South Africa (CCSA) to the Organisation for Economic Co-operation and Development Organisation (OECD)’s Working Party 2 of the Competition Committee for a roundtable discussion on the “Competition Enforcement and Regulatory Alternatives”. 2. There has been much debate in South Africa as elsewhere about the relationships between competition authorities and regulators, and between competition and regulation. There have also been court cases regarding the boundaries of the jurisdiction of regulators and the competition authorities, especially in telecommunications in South Africa. Tensions between competition and regulation can arise in instances where regulation limits the scope of competition laws and instances where regulation makes it increasingly difficult to enforce the competition law. The former has mainly been addressed in the South Africa as the Competition Act no.89 of 1998 (as amended) (the Competition Act) was amended early on to give the competition authorities jurisdiction over all sectors including those that have sector regulators. 3. South Africa’s very complex economic history led to extensive government regulation in one respect and government also actively participated in economic activity through state monopolies. At the advent of democracy in 1994, it became imperative for the state to ensure that the economy is transformed, by ensuring that previous state monopolies including in the various sectors, become competitive through not only the process of market liberalization but also through strengthening and amending regulations which governed the conduct of the state as an economic actor. These interventions were necessitated by the need for sustainable inclusive growth and development. Competition law and policy became one of the instruments envisioned to achieve growth and inclusiveness. 4. The South African economy exhibits high levels of concentration, in large part a result of our history whereby apartheid denied the majority of the population the opportunity to participate in the economy. However, many developing country markets are similarly concentrated given limited domestic markets on the demand side and limited capital and skilled labour on the supply side. The economy is also still amongst the most unequal in the world with high levels of unemployment and poverty, 27 years into democracy. Again, this is a product of our history.