File #2435: "2018_Book_TheInterfaceOfCompetitionLawIn.pdf"
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1|Dedication|6
1|Acknowledgements|7
1|Contents|9
1|List of Abbreviations|22
1|Chapter 1: Introduction: Research Questions and Competition Law in a Developing Country Context|26
2|1.1 Research Questions|26
2|1.2 Competition Law in Developing Countries|32
3|1.2.1 Spread of Competition Law|32
3|1.2.2 Benefits of Competition Law|35
3|1.2.3 Nature of Competition Law in Developing Countries|37
3|1.2.4 Developing Countries’ Constraints|40
3|1.2.5 Context Informs Design|43
3|1.2.6 Upshot|46
2|1.3 Outline of the Book|46
1|Part I: Theoretical Foundations of Industrial Policy and Competition Law|49
2|Chapter 2: The Concepts of Industrial Policy and Competition Law Distinguished|50
3|2.1 Industrial Policy|50
4|2.1.1 Nature of Industrial Policy|50
5|2.1.1.1 Industrial Policy as Classically Defined|50
5|2.1.1.2 Reasons for Industrial Policy|53
5|2.1.1.3 Modern Industrial Policy|55
4|2.1.2 Industrial Policies Relevant from Competition Perspective|57
5|2.1.2.1 Infant Industry Protection and Import Substitution|58
5|2.1.2.2 National Champion Policies|61
5|2.1.2.3 State-Ownership|65
4|2.1.3 Summary|69
3|2.2 Competition Law|70
4|2.2.1 Goals of Competition Law|70
5|2.2.1.1 Efficiency and Welfare|70
5|2.2.1.2 Competitive Process and Structure|73
5|2.2.1.3 Secondary Goals|74
4|2.2.2 Types of Competition Law|76
5|2.2.2.1 Efficiency-Based Approach|77
5|2.2.2.2 Open Market Approach|79
5|2.2.2.3 Development Approach|82
4|2.2.3 Public Interest and the Law|85
5|2.2.3.1 Public Interest Theory|85
5|2.2.3.2 Public Interest and Competition Law|88
4|2.2.4 Abuse of Dominance|89
5|2.2.4.1 A Concept Fit for Developing Countries?|89
5|2.2.4.2 Particular Conditions of Developing Countries|91
5|2.2.4.3 Design of Abuse of Dominance Provision|92
6|2.2.4.3.1 Relevant Market|93
6|2.2.4.3.2 Dominance|94
6|2.2.4.3.3 Abuse|95
6|2.2.4.3.4 Concrete Recommendations|98
4|2.2.5 Summary|100
2|Chapter 3: Interface of Industrial Policy and Competition Law from a Theoretical Point of View|102
3|3.1 Distortive Effect of Government Regulation|103
3|3.2 Difference Between Impact on Competition and Competition Law|104
4|3.2.1 Competition and Regulation|104
4|3.2.2 Competition and Industrial Policy|106
4|3.2.3 Summary|108
3|3.3 Interface with Competition Law|108
4|3.3.1 Formation of National Champions|109
4|3.3.2 Hierarchy of Goals|109
4|3.3.3 Reach of Competition Law|110
4|3.3.4 Government Interference|114
4|3.3.5 Policy Concerns as Reflected by the Law|115
5|3.3.5.1 Integration of Concerns Other Than Competition-Related Ones|116
5|3.3.5.2 Case-by-Case Exemptions from the Scope of Competition Law|120
4|3.3.6 Competition Law As Tool to Fight Policy Repercussions|121
4|3.3.7 Summary|122
3|3.4 Ways to Reconcile Industrial Policy with Competition Policy and Law|123
4|3.4.1 Industrial Policy and Competition|123
4|3.4.2 Industrial Policy and Competition Law|124
5|3.4.2.1 Specific Adaptions of Competition Law|126
5|3.4.2.2 Dynamic Efficiency Concerns|127
6|3.4.2.2.1 Concept of Dynamic Efficiencies and Competition Law|127
6|3.4.2.2.2 General Applicability with Regard to Economic Progress and Development|130
4|3.4.3 Summary|132
1|Part II: Competition Law, Industrial Policy and South Africa|134
2|Chapter 4: Industrial Policy in South Africa|135
3|4.1 Under Apartheid|136
4|4.1.1 The Political Economy of Apartheid|136
4|4.1.2 Gold and Dependence on Mineral Resources|138
4|4.1.3 State-Owned Enterprises|140
4|4.1.4 Import-Substitution Policies|142
4|4.1.5 Summary and Conclusion|144
3|4.2 Post-Apartheid|145
4|4.2.1 Conservative Policy-Making|145
4|4.2.2 Trade|148
4|4.2.3 Privatisation and Restructuring|149
4|4.2.4 Economic Regulation and Industrial Policy|152
4|4.2.5 South Africa as Developmental State|157
5|4.2.5.1 Concept|157
5|4.2.5.2 South Africa|160
4|4.2.6 Summary|162
2|Chapter 5: Competition Law in South Africa|164
3|5.1 Under Apartheid|164
4|5.1.1 The 1955 Regulation of Monopolistic Conditions Act|164
4|5.1.2 The 1979 Maintenance and Promotion of Competition Act|165
5|5.1.2.1 Competition Board Versus Minister|165
5|5.1.2.2 Modest Enforcement|167
4|5.1.3 Summary|167
3|5.2 Post-Apartheid|168
4|5.2.1 Point of Departure|168
4|5.2.2 Evolution of the 1998 Competition Act|170
5|5.2.2.1 Proposed Guidelines for Competition Policy|171
5|5.2.2.2 Competition Bill|173
4|5.2.3 Features of the Act|174
5|5.2.3.1 Prohibited Practices|175
6|5.2.3.1.1 Restrictive Practices|175
6|5.2.3.1.2 Abuse of Dominant Position|176
5|5.2.3.2 Merger Control|178
5|5.2.3.3 Provisions Reflecting Industrial Policy and Development Concerns|179
6|5.2.3.3.1 Preamble and Purpose of the Act|180
6|5.2.3.3.2 The Exemption Regime|183
6|5.2.3.3.3 Public Interest with Merger Control|187
7|5.2.3.3.3.1 Interrelation of Competition Assessment and Public Interest|188
7|5.2.3.3.3.2 Direction of Impact|189
7|5.2.3.3.3.3 Need for Positive Justification|190
7|5.2.3.3.3.4 Contradictory Interests|191
7|5.2.3.3.3.5 Public Interest Criteria|192
6|5.2.3.3.4 Institutional Structure|196
4|5.2.4 Summary|197
2|Chapter 6: Interface of Industrial Policy and Competition Law in South Africa|199
3|6.1 Enforcement to Fight the Legacy of Apartheid|200
4|6.1.1 Telkom|201
5|6.1.1.1 Background|201
6|6.1.1.1.1 Reform of the Telecommunications Regulation|201
6|6.1.1.1.2 Universal Access Versus Cost-Competitiveness|202
6|6.1.1.1.3 Partial Privatisation|204
6|6.1.1.1.4 Sector Regulation|204
6|6.1.1.1.5 Second Network Operator|206
5|6.1.1.2 Case Law Involving Telkom|207
6|6.1.1.2.1 The 2004 Refusal Case|208
6|6.1.1.2.2 The 2009 Margin Squeeze Case|213
5|6.1.1.3 Conclusion|215
5|6.1.1.4 Summary|215
4|6.1.2 Arcelor Mittal Steel|216
5|6.1.2.1 Background|216
6|6.1.2.1.1 Iscor as State-Owned Enterprise|216
6|6.1.2.1.2 Post Privatisation|217
6|6.1.2.1.3 Continuous State-Support|219
5|6.1.2.2 Case Law Involving Arcelor Mittal Steel|223
6|6.1.2.2.1 The Tribunal Case|223
6|6.1.2.2.2 The Appeal Court Decision|228
5|6.1.2.3 Conclusion|232
5|6.1.2.4 Summary|235
4|6.1.3 Sasol|235
5|6.1.3.1 Background|236
6|6.1.3.1.1 Chemicals Sector|236
6|6.1.3.1.2 Foundation of Sasol|237
6|6.1.3.1.3 State-Support|239
5|6.1.3.2 Case Law Involving Sasol|244
6|6.1.3.2.1 Nationwide Poles|244
7|6.1.3.2.1.1 The Tribunal Case|244
7|6.1.3.2.1.2 The Appeal Court Decision|247
6|6.1.3.2.2 Case Law Regarding Fertiliser and Polymers|249
7|6.1.3.2.2.1 Fertiliser Case|249
8|6.1.3.2.2.1.1 Settlement Regarding Collusion|249
8|6.1.3.2.2.1.2 Settlement Regarding Abuse of Dominance|251
7|6.1.3.2.2.2 Polymers Case|253
8|6.1.3.2.2.2.1 Settlement Regarding Collusion|253
8|6.1.3.2.2.2.2 Excessive Pricing Case|254
9|6.1.3.2.2.2.2.1 The Tribunal Case|254
9|6.1.3.2.2.2.2.2 The Appeal Court Decision|259
5|6.1.3.3 Conclusion|261
5|6.1.3.4 Summary|263
4|6.1.4 Foskor|265
5|6.1.4.1 Background|265
5|6.1.4.2 Case Law Involving Foskor|266
5|6.1.4.3 Conclusion and Summary|267
4|6.1.5 SAA|267
5|6.1.5.1 Background|268
6|6.1.5.1.1 Foundation of South African Airways|268
6|6.1.5.1.2 Deregulation of the Civil Aviation Sector|269
6|6.1.5.1.3 Restructuring and Attempt to Privatise|271
6|6.1.5.1.4 Recent Developments|271
5|6.1.5.2 Case Law Involving South African Airways|274
6|6.1.5.2.1 South African Airways I|275
6|6.1.5.2.2 South African Airways II|279
7|6.1.5.2.2.1 The Tribunal Case|279
7|6.1.5.2.2.2 The Appeal Court Decision|283
5|6.1.5.3 Conclusion|285
5|6.1.5.4 Summary|286
4|6.1.6 Senwes Ltd|287
5|6.1.6.1 Background|287
5|6.1.6.2 Case Law Involving Senwes|290
6|6.1.6.2.1 The Abuse Case|290
7|6.1.6.2.1.1 The Tribunal Case|290
7|6.1.6.2.1.2 Higher Instances|292
7|6.1.6.2.1.3 Settlement|295
6|6.1.6.2.2 Collusion|296
5|6.1.6.3 Conclusion|297
5|6.1.6.4 Summary|297
4|6.1.7 Patensie Sitrus Beherend Beperk|298
5|6.1.7.1 Background|298
5|6.1.7.2 Case Law Involving Patensie Citrus Beherend Beperk|299
5|6.1.7.3 Conclusion and Summary|300
4|6.1.8 South African Breweries|301
5|6.1.8.1 Background|301
5|6.1.8.2 Case Law Involving South African Breweries|303
6|6.1.8.2.1 The Tribunal Case|303
6|6.1.8.2.2 The Appeal Court Decision|306
5|6.1.8.3 Conclusion|307
5|6.1.8.4 Summary|308
4|6.1.9 Conclusion|308
3|6.2 Prioritisation and Selection|312
4|6.2.1 Authorities’ Procedural Discretion and the Process of Prioritisation|313
4|6.2.2 Approach Taken by the South African Competition Commission|315
5|6.2.2.1 Prioritisation Criteria and Sectors|316
5|6.2.2.2 Impact of Prioritisation|317
6|6.2.2.2.1 Investigation Numbers and Leniency Applications|317
6|6.2.2.2.2 Concrete Results|319
7|6.2.2.2.2.1 Food and Agro-Processing|319
7|6.2.2.2.2.2 Infrastructure and Construction|320
7|6.2.2.2.2.3 Intermediate Industrial Products|323
7|6.2.2.2.2.4 Financial Services (Banking)|327
4|6.2.3 Conclusion|328
3|6.3 Inclusion of Industrial and Development Objectives in Competition Law|329
4|6.3.1 Exemption Regime|330
5|6.3.1.1 The Maintenance and Promotion of Exports|331
6|6.3.1.1.1 South African Airways (Pty) Ltd|331
6|6.3.1.1.2 South African Port Operations|334
6|6.3.1.1.3 Western Cape Citrus Producers Forum|334
6|6.3.1.1.4 Allens Meshco (Pty) Ltd|336
6|6.3.1.1.5 Grain South Africa|336
6|6.3.1.1.6 Squid Exporters Association and Various Lobster Exporters|337
5|6.3.1.2 The Promotion of the Ability of Small Business or Firms Controlled or Owned by Historically Disadvantaged Persons to Become Competitive|338
6|6.3.1.2.1 Ring Pharmaceutical Distributors|338
6|6.3.1.2.2 National Hospital Network|339
6|6.3.1.2.3 Scriptpharm Holdings (Pty) Ltd and Others|340
6|6.3.1.2.4 Spring Lights Gas (Pty) Ltd|340
5|6.3.1.3 Change in Productive Capacity Necessary to Stop Decline in an Industry|341
5|6.3.1.4 The Economic Stability of an Industry Designated by the Minister|342
6|6.3.1.4.1 Sasol and Other Oil Companies Reg. Main Supply Agreement|342
6|6.3.1.4.2 Petroleum Oil and Gas Corporation of South Africa Ltd|342
6|6.3.1.4.3 South African Petroleum and Refinery Industry|344
7|6.3.1.4.3.1 Short-Term Exemption for FIFA World Cup|344
7|6.3.1.4.3.2 Long-Term Exemption after FIFA World Cup|345
5|6.3.1.5 The Exercise of Intellectual Property Rights|347
5|6.3.1.6 Exemption of Professional Rules|347
6|6.3.1.6.1 Law Society of South Africa|347
6|6.3.1.6.2 Health Professions Council of South Africa|348
6|6.3.1.6.3 Council for the Built Environment and Its Members|349
5|6.3.1.7 Conclusion|350
4|6.3.2 Public Interest Regime|352
5|6.3.2.1 Effect on Employment|355
6|6.3.2.1.1 Case Law|356
7|6.3.2.1.1.1 DB Investments SA and De Beers Consolidated Mines & De Beers Centenary AG|356
7|6.3.2.1.1.2 Unilever Plc, Unifoods, Hudson & Knight, Robertson Foods (Pty) Ltd and Robertson Food Service (Pty) Ltd|357
7|6.3.2.1.1.3 Distillers Corporation (SA) Limited and Stellenbosch Farmers Winery Group Ltd|358
7|6.3.2.1.1.4 Daun et Cie AG and Kolosus Holding Limited|359
7|6.3.2.1.1.5 Harmony Gold Mining Company Limited and Gold Fields Limited|360
7|6.3.2.1.1.6 Edgars Consolidated Stores (Pty) Ltd and Rapid Dawn 123 (Pty) Ltd|361
7|6.3.2.1.1.7 Lonmin Plc and Southern Platinum Corp|363
7|6.3.2.1.1.8 Tiger Brands Ltd and Langeberg Foods International Ashton Canning Company (Pty) Ltd|364
7|6.3.2.1.1.9 DCD Dorbyl (Pty) Ltd and Globe Engineering Works (Pty) Ltd|365
7|6.3.2.1.1.10 Nedbank Ltd and Imperial Bank Ltd|366
7|6.3.2.1.1.11 Metropolitan Holdings Limited and Momentum Group Limited|367
7|6.3.2.1.1.12 Walmart Stores Inc and Massmart Holdings Limited|369
8|6.3.2.1.1.12.1 The Tribunal Case|369
8|6.3.2.1.1.12.2 The Appeal Court Decision|373
9|6.3.2.1.1.12.2.1 The First Decision|373
9|6.3.2.1.1.12.2.2 The Second Decision|375
9|6.3.2.1.1.12.2.3 Conclusion|377
7|6.3.2.1.1.13 Kansai Paint Co. Ltd and Freeworld Coatings Limited|380
7|6.3.2.1.1.14 Aon South Africa (Pty) Ltd and Glenrand MIB Ltd|383
7|6.3.2.1.1.15 Glencore International Plc and Xstrata Plc|384
7|6.3.2.1.1.16 Sibanye Gold Limited and Newshelf 1114 (Pty) Limited|385
7|6.3.2.1.1.17 Arrowhead Properties Trust Ltd and Vividend Income Fund Ltd|386
7|6.3.2.1.1.18 BB Investment Company (Pty) Ltd and Adcock Ingram Holdings (Pty) Ltd|386
7|6.3.2.1.1.19 Vodacom (Pty) Ltd and Nashua Mobile (Pty) Ltd in Respect of Its Vodacom (Pty) Ltd Subscriber Base|387
7|6.3.2.1.1.20 RCS Card (Pty) Ltd and The Consumer Finance Business of the JD Group Ltd|388
7|6.3.2.1.1.21 Diageo South Africa (Pty) Ltd, Heineken International B.V., Namibia Breweries Ltd and Brandhouse Beverages (Pty) Ltd, DHN Drinks (Pty) Ltd, Sedibeng Brewery (Pty) Ltd|390
6|6.3.2.1.2 Conclusion|390
5|6.3.2.2 Effect on Particular Industrial Sector or Region|391
6|6.3.2.2.1 Case Law|392
7|6.3.2.2.1.1 Nasionale Pers Limited and Educational Investment Corporation Limited|392
7|6.3.2.2.1.2 Tongaat-Hulett Group Limited and Transvaal Suiker Beperk, Middenen Ontwikkeling (Pty) Ltd, Senteeko (Edms) Bpk, New Komati Sugar Miller’s Partnership, Tsb Bestuurdienste|393
7|6.3.2.2.1.3 Iscor Limited and Saldanha Steel (Pty) Ltd|394
7|6.3.2.2.1.4 Harmony Gold Mining Company Limited and Gold Fields Limited|395
7|6.3.2.2.1.5 Life Healthcare Group (Pty) Ltd and Aurora Hospital (Pty) Ltd|396
7|6.3.2.2.1.6 Ardutch B.V. and Defy Appliances (Pty) Ltd|397
7|6.3.2.2.1.7 AgriGroupe Holdings (Pty) Limited and AFGRI Limited|398
7|6.3.2.2.1.8 Hebei Zhongbo Platinum Co. Ltd and Eastern Platinum Ltd|400
6|6.3.2.2.2 Conclusion|401
5|6.3.2.3 Effect on Ability of Small Business and Historically Disadvantaged Persons to Become Competitive|402
6|6.3.2.3.1 Case Law|402
7|6.3.2.3.1.1 Nasionale Pers Limited and Educational Investment Corporation Limited|402
7|6.3.2.3.1.2 The Government Employees Pension Fund and Afrisam Consortium (Pty) Ltd (4 July 2012)|403
7|6.3.2.3.1.3 JD Group Limited and Ellerine Holdings Limited|403
7|6.3.2.3.1.4 Schumann Sasol (South Africa) (Pty) Ltd and Price’s Daelite (Pty) Ltd|404
7|6.3.2.3.1.5 Shell South Africa (Pty) Ltd and Tepco Petroleum (Pty) Ltd|405
7|6.3.2.3.1.6 Anglo American Holdings Ltd and Kumba Resources Ltd|408
7|6.3.2.3.1.7 Business Venture Investments 790 (Pty) Ltd and Afrox Healthcare Ltd|410
7|6.3.2.3.1.8 Masscash Holdings (Pty) Ltd and Finro Enterprises (Pty) Ltd t/a Finro Cash and Carry|411
7|6.3.2.3.1.9 Pioneer Hi-Bred International Inc and Pannar Seed (Pty) Ltd|412
7|6.3.2.3.1.10 Hyprop Investments Limited and Sycom Property Fund Managers Limited|413
6|6.3.2.3.2 Conclusion|415
5|6.3.2.4 Effect on Ability of National Industries to Compete Internationally|416
6|6.3.2.4.1 Case Law|416
7|6.3.2.4.1.1 Nedcor Limited and Standard Bank Investment Corporation|416
7|6.3.2.4.1.2 Tongaat-Hulett Group Limited and Transvaal Suiker Beperk, Middenen Ontwikkeling (Pty) Ltd, Senteeko (Edms) Bpk, New Komati Sugar Miller’s Partnership, Tsb Bestuurdienste|418
7|6.3.2.4.1.3 Iscor Limited and Saldanha Steel (Pty) Ltd|419
7|6.3.2.4.1.4 Nampak Limited and Malbak Limited|419
7|6.3.2.4.1.5 Distillers Corporation (SA) Limited and Stellenbosch Farmers Winery Group Ltd|420
7|6.3.2.4.1.6 Tiger Brands Ltd and Langeberg Foods International Ashton Canning Company (Pty) Ltd|421
7|6.3.2.4.1.7 Rhodes Food Group (Pty) Ltd and Del Monte South Africa (Pty) Ltd|422
7|6.3.2.4.1.8 Ethos Private Equity Fund VI and TP Hentiq 6128 (Pty) Ltd|423
6|6.3.2.4.2 Conclusion|423
5|6.3.2.5 Conclusion on Public Interest|424
2|Chapter 7: Consideration of Development Concerns in Enforcing South African Competition Law|429
3|7.1 Competition Law’s Contribution to the UN’s Development Goals|430
3|7.2 Case Law with Development Impact|431
4|7.2.1 Food|431
5|7.2.1.1 Bread|431
5|7.2.1.2 Wheat and Maize|434
5|7.2.1.3 Dairy|437
5|7.2.1.4 Poultry|441
5|7.2.1.5 Conclusion|442
4|7.2.2 Health|443
5|7.2.2.1 Medicine|445
6|7.2.2.1.1 Glaxo Wellcome (Pty) Ltd|445
6|7.2.2.1.2 GlaxoSmithKline (South Africa) (Pty) Ltd|447
6|7.2.2.1.3 Bristol-Myers Squibb (Pty) Ltd|449
6|7.2.2.1.4 MSD (Pty) Ltd|449
6|7.2.2.1.5 Aspen Pharmacare (Pty) Ltd and GlaxoSmithKline (South Africa) (Pty) Ltd|450
5|7.2.2.2 Medical Equipment|451
6|7.2.2.2.1 Adcock Ingram Critical Care (Pty) Ltd and Others|451
6|7.2.2.2.2 Hosanna Medical & Disposables CC and Shekinah Medical & Disposables CC|452
5|7.2.2.3 Conclusion|452
4|7.2.3 Housing and Sanitation|454
3|7.3 Summary and Conclusion|455
1|Part III: Conclusion|457
2|Chapter 8: Conclusion: Complex Relationship Between Industrial Policy, Competition Law and Development Concerns|458
1|Legal Provisions|464
1|Annexes|471
1|Bibliography|484
2|References|484
2|Case Law|517
2|Government Gazette Notices|525
2|Legislation|528
2|Webpages|529
1|Acknowledgements|7
1|Contents|9
1|List of Abbreviations|22
1|Chapter 1: Introduction: Research Questions and Competition Law in a Developing Country Context|26
2|1.1 Research Questions|26
2|1.2 Competition Law in Developing Countries|32
3|1.2.1 Spread of Competition Law|32
3|1.2.2 Benefits of Competition Law|35
3|1.2.3 Nature of Competition Law in Developing Countries|37
3|1.2.4 Developing Countries’ Constraints|40
3|1.2.5 Context Informs Design|43
3|1.2.6 Upshot|46
2|1.3 Outline of the Book|46
1|Part I: Theoretical Foundations of Industrial Policy and Competition Law|49
2|Chapter 2: The Concepts of Industrial Policy and Competition Law Distinguished|50
3|2.1 Industrial Policy|50
4|2.1.1 Nature of Industrial Policy|50
5|2.1.1.1 Industrial Policy as Classically Defined|50
5|2.1.1.2 Reasons for Industrial Policy|53
5|2.1.1.3 Modern Industrial Policy|55
4|2.1.2 Industrial Policies Relevant from Competition Perspective|57
5|2.1.2.1 Infant Industry Protection and Import Substitution|58
5|2.1.2.2 National Champion Policies|61
5|2.1.2.3 State-Ownership|65
4|2.1.3 Summary|69
3|2.2 Competition Law|70
4|2.2.1 Goals of Competition Law|70
5|2.2.1.1 Efficiency and Welfare|70
5|2.2.1.2 Competitive Process and Structure|73
5|2.2.1.3 Secondary Goals|74
4|2.2.2 Types of Competition Law|76
5|2.2.2.1 Efficiency-Based Approach|77
5|2.2.2.2 Open Market Approach|79
5|2.2.2.3 Development Approach|82
4|2.2.3 Public Interest and the Law|85
5|2.2.3.1 Public Interest Theory|85
5|2.2.3.2 Public Interest and Competition Law|88
4|2.2.4 Abuse of Dominance|89
5|2.2.4.1 A Concept Fit for Developing Countries?|89
5|2.2.4.2 Particular Conditions of Developing Countries|91
5|2.2.4.3 Design of Abuse of Dominance Provision|92
6|2.2.4.3.1 Relevant Market|93
6|2.2.4.3.2 Dominance|94
6|2.2.4.3.3 Abuse|95
6|2.2.4.3.4 Concrete Recommendations|98
4|2.2.5 Summary|100
2|Chapter 3: Interface of Industrial Policy and Competition Law from a Theoretical Point of View|102
3|3.1 Distortive Effect of Government Regulation|103
3|3.2 Difference Between Impact on Competition and Competition Law|104
4|3.2.1 Competition and Regulation|104
4|3.2.2 Competition and Industrial Policy|106
4|3.2.3 Summary|108
3|3.3 Interface with Competition Law|108
4|3.3.1 Formation of National Champions|109
4|3.3.2 Hierarchy of Goals|109
4|3.3.3 Reach of Competition Law|110
4|3.3.4 Government Interference|114
4|3.3.5 Policy Concerns as Reflected by the Law|115
5|3.3.5.1 Integration of Concerns Other Than Competition-Related Ones|116
5|3.3.5.2 Case-by-Case Exemptions from the Scope of Competition Law|120
4|3.3.6 Competition Law As Tool to Fight Policy Repercussions|121
4|3.3.7 Summary|122
3|3.4 Ways to Reconcile Industrial Policy with Competition Policy and Law|123
4|3.4.1 Industrial Policy and Competition|123
4|3.4.2 Industrial Policy and Competition Law|124
5|3.4.2.1 Specific Adaptions of Competition Law|126
5|3.4.2.2 Dynamic Efficiency Concerns|127
6|3.4.2.2.1 Concept of Dynamic Efficiencies and Competition Law|127
6|3.4.2.2.2 General Applicability with Regard to Economic Progress and Development|130
4|3.4.3 Summary|132
1|Part II: Competition Law, Industrial Policy and South Africa|134
2|Chapter 4: Industrial Policy in South Africa|135
3|4.1 Under Apartheid|136
4|4.1.1 The Political Economy of Apartheid|136
4|4.1.2 Gold and Dependence on Mineral Resources|138
4|4.1.3 State-Owned Enterprises|140
4|4.1.4 Import-Substitution Policies|142
4|4.1.5 Summary and Conclusion|144
3|4.2 Post-Apartheid|145
4|4.2.1 Conservative Policy-Making|145
4|4.2.2 Trade|148
4|4.2.3 Privatisation and Restructuring|149
4|4.2.4 Economic Regulation and Industrial Policy|152
4|4.2.5 South Africa as Developmental State|157
5|4.2.5.1 Concept|157
5|4.2.5.2 South Africa|160
4|4.2.6 Summary|162
2|Chapter 5: Competition Law in South Africa|164
3|5.1 Under Apartheid|164
4|5.1.1 The 1955 Regulation of Monopolistic Conditions Act|164
4|5.1.2 The 1979 Maintenance and Promotion of Competition Act|165
5|5.1.2.1 Competition Board Versus Minister|165
5|5.1.2.2 Modest Enforcement|167
4|5.1.3 Summary|167
3|5.2 Post-Apartheid|168
4|5.2.1 Point of Departure|168
4|5.2.2 Evolution of the 1998 Competition Act|170
5|5.2.2.1 Proposed Guidelines for Competition Policy|171
5|5.2.2.2 Competition Bill|173
4|5.2.3 Features of the Act|174
5|5.2.3.1 Prohibited Practices|175
6|5.2.3.1.1 Restrictive Practices|175
6|5.2.3.1.2 Abuse of Dominant Position|176
5|5.2.3.2 Merger Control|178
5|5.2.3.3 Provisions Reflecting Industrial Policy and Development Concerns|179
6|5.2.3.3.1 Preamble and Purpose of the Act|180
6|5.2.3.3.2 The Exemption Regime|183
6|5.2.3.3.3 Public Interest with Merger Control|187
7|5.2.3.3.3.1 Interrelation of Competition Assessment and Public Interest|188
7|5.2.3.3.3.2 Direction of Impact|189
7|5.2.3.3.3.3 Need for Positive Justification|190
7|5.2.3.3.3.4 Contradictory Interests|191
7|5.2.3.3.3.5 Public Interest Criteria|192
6|5.2.3.3.4 Institutional Structure|196
4|5.2.4 Summary|197
2|Chapter 6: Interface of Industrial Policy and Competition Law in South Africa|199
3|6.1 Enforcement to Fight the Legacy of Apartheid|200
4|6.1.1 Telkom|201
5|6.1.1.1 Background|201
6|6.1.1.1.1 Reform of the Telecommunications Regulation|201
6|6.1.1.1.2 Universal Access Versus Cost-Competitiveness|202
6|6.1.1.1.3 Partial Privatisation|204
6|6.1.1.1.4 Sector Regulation|204
6|6.1.1.1.5 Second Network Operator|206
5|6.1.1.2 Case Law Involving Telkom|207
6|6.1.1.2.1 The 2004 Refusal Case|208
6|6.1.1.2.2 The 2009 Margin Squeeze Case|213
5|6.1.1.3 Conclusion|215
5|6.1.1.4 Summary|215
4|6.1.2 Arcelor Mittal Steel|216
5|6.1.2.1 Background|216
6|6.1.2.1.1 Iscor as State-Owned Enterprise|216
6|6.1.2.1.2 Post Privatisation|217
6|6.1.2.1.3 Continuous State-Support|219
5|6.1.2.2 Case Law Involving Arcelor Mittal Steel|223
6|6.1.2.2.1 The Tribunal Case|223
6|6.1.2.2.2 The Appeal Court Decision|228
5|6.1.2.3 Conclusion|232
5|6.1.2.4 Summary|235
4|6.1.3 Sasol|235
5|6.1.3.1 Background|236
6|6.1.3.1.1 Chemicals Sector|236
6|6.1.3.1.2 Foundation of Sasol|237
6|6.1.3.1.3 State-Support|239
5|6.1.3.2 Case Law Involving Sasol|244
6|6.1.3.2.1 Nationwide Poles|244
7|6.1.3.2.1.1 The Tribunal Case|244
7|6.1.3.2.1.2 The Appeal Court Decision|247
6|6.1.3.2.2 Case Law Regarding Fertiliser and Polymers|249
7|6.1.3.2.2.1 Fertiliser Case|249
8|6.1.3.2.2.1.1 Settlement Regarding Collusion|249
8|6.1.3.2.2.1.2 Settlement Regarding Abuse of Dominance|251
7|6.1.3.2.2.2 Polymers Case|253
8|6.1.3.2.2.2.1 Settlement Regarding Collusion|253
8|6.1.3.2.2.2.2 Excessive Pricing Case|254
9|6.1.3.2.2.2.2.1 The Tribunal Case|254
9|6.1.3.2.2.2.2.2 The Appeal Court Decision|259
5|6.1.3.3 Conclusion|261
5|6.1.3.4 Summary|263
4|6.1.4 Foskor|265
5|6.1.4.1 Background|265
5|6.1.4.2 Case Law Involving Foskor|266
5|6.1.4.3 Conclusion and Summary|267
4|6.1.5 SAA|267
5|6.1.5.1 Background|268
6|6.1.5.1.1 Foundation of South African Airways|268
6|6.1.5.1.2 Deregulation of the Civil Aviation Sector|269
6|6.1.5.1.3 Restructuring and Attempt to Privatise|271
6|6.1.5.1.4 Recent Developments|271
5|6.1.5.2 Case Law Involving South African Airways|274
6|6.1.5.2.1 South African Airways I|275
6|6.1.5.2.2 South African Airways II|279
7|6.1.5.2.2.1 The Tribunal Case|279
7|6.1.5.2.2.2 The Appeal Court Decision|283
5|6.1.5.3 Conclusion|285
5|6.1.5.4 Summary|286
4|6.1.6 Senwes Ltd|287
5|6.1.6.1 Background|287
5|6.1.6.2 Case Law Involving Senwes|290
6|6.1.6.2.1 The Abuse Case|290
7|6.1.6.2.1.1 The Tribunal Case|290
7|6.1.6.2.1.2 Higher Instances|292
7|6.1.6.2.1.3 Settlement|295
6|6.1.6.2.2 Collusion|296
5|6.1.6.3 Conclusion|297
5|6.1.6.4 Summary|297
4|6.1.7 Patensie Sitrus Beherend Beperk|298
5|6.1.7.1 Background|298
5|6.1.7.2 Case Law Involving Patensie Citrus Beherend Beperk|299
5|6.1.7.3 Conclusion and Summary|300
4|6.1.8 South African Breweries|301
5|6.1.8.1 Background|301
5|6.1.8.2 Case Law Involving South African Breweries|303
6|6.1.8.2.1 The Tribunal Case|303
6|6.1.8.2.2 The Appeal Court Decision|306
5|6.1.8.3 Conclusion|307
5|6.1.8.4 Summary|308
4|6.1.9 Conclusion|308
3|6.2 Prioritisation and Selection|312
4|6.2.1 Authorities’ Procedural Discretion and the Process of Prioritisation|313
4|6.2.2 Approach Taken by the South African Competition Commission|315
5|6.2.2.1 Prioritisation Criteria and Sectors|316
5|6.2.2.2 Impact of Prioritisation|317
6|6.2.2.2.1 Investigation Numbers and Leniency Applications|317
6|6.2.2.2.2 Concrete Results|319
7|6.2.2.2.2.1 Food and Agro-Processing|319
7|6.2.2.2.2.2 Infrastructure and Construction|320
7|6.2.2.2.2.3 Intermediate Industrial Products|323
7|6.2.2.2.2.4 Financial Services (Banking)|327
4|6.2.3 Conclusion|328
3|6.3 Inclusion of Industrial and Development Objectives in Competition Law|329
4|6.3.1 Exemption Regime|330
5|6.3.1.1 The Maintenance and Promotion of Exports|331
6|6.3.1.1.1 South African Airways (Pty) Ltd|331
6|6.3.1.1.2 South African Port Operations|334
6|6.3.1.1.3 Western Cape Citrus Producers Forum|334
6|6.3.1.1.4 Allens Meshco (Pty) Ltd|336
6|6.3.1.1.5 Grain South Africa|336
6|6.3.1.1.6 Squid Exporters Association and Various Lobster Exporters|337
5|6.3.1.2 The Promotion of the Ability of Small Business or Firms Controlled or Owned by Historically Disadvantaged Persons to Become Competitive|338
6|6.3.1.2.1 Ring Pharmaceutical Distributors|338
6|6.3.1.2.2 National Hospital Network|339
6|6.3.1.2.3 Scriptpharm Holdings (Pty) Ltd and Others|340
6|6.3.1.2.4 Spring Lights Gas (Pty) Ltd|340
5|6.3.1.3 Change in Productive Capacity Necessary to Stop Decline in an Industry|341
5|6.3.1.4 The Economic Stability of an Industry Designated by the Minister|342
6|6.3.1.4.1 Sasol and Other Oil Companies Reg. Main Supply Agreement|342
6|6.3.1.4.2 Petroleum Oil and Gas Corporation of South Africa Ltd|342
6|6.3.1.4.3 South African Petroleum and Refinery Industry|344
7|6.3.1.4.3.1 Short-Term Exemption for FIFA World Cup|344
7|6.3.1.4.3.2 Long-Term Exemption after FIFA World Cup|345
5|6.3.1.5 The Exercise of Intellectual Property Rights|347
5|6.3.1.6 Exemption of Professional Rules|347
6|6.3.1.6.1 Law Society of South Africa|347
6|6.3.1.6.2 Health Professions Council of South Africa|348
6|6.3.1.6.3 Council for the Built Environment and Its Members|349
5|6.3.1.7 Conclusion|350
4|6.3.2 Public Interest Regime|352
5|6.3.2.1 Effect on Employment|355
6|6.3.2.1.1 Case Law|356
7|6.3.2.1.1.1 DB Investments SA and De Beers Consolidated Mines & De Beers Centenary AG|356
7|6.3.2.1.1.2 Unilever Plc, Unifoods, Hudson & Knight, Robertson Foods (Pty) Ltd and Robertson Food Service (Pty) Ltd|357
7|6.3.2.1.1.3 Distillers Corporation (SA) Limited and Stellenbosch Farmers Winery Group Ltd|358
7|6.3.2.1.1.4 Daun et Cie AG and Kolosus Holding Limited|359
7|6.3.2.1.1.5 Harmony Gold Mining Company Limited and Gold Fields Limited|360
7|6.3.2.1.1.6 Edgars Consolidated Stores (Pty) Ltd and Rapid Dawn 123 (Pty) Ltd|361
7|6.3.2.1.1.7 Lonmin Plc and Southern Platinum Corp|363
7|6.3.2.1.1.8 Tiger Brands Ltd and Langeberg Foods International Ashton Canning Company (Pty) Ltd|364
7|6.3.2.1.1.9 DCD Dorbyl (Pty) Ltd and Globe Engineering Works (Pty) Ltd|365
7|6.3.2.1.1.10 Nedbank Ltd and Imperial Bank Ltd|366
7|6.3.2.1.1.11 Metropolitan Holdings Limited and Momentum Group Limited|367
7|6.3.2.1.1.12 Walmart Stores Inc and Massmart Holdings Limited|369
8|6.3.2.1.1.12.1 The Tribunal Case|369
8|6.3.2.1.1.12.2 The Appeal Court Decision|373
9|6.3.2.1.1.12.2.1 The First Decision|373
9|6.3.2.1.1.12.2.2 The Second Decision|375
9|6.3.2.1.1.12.2.3 Conclusion|377
7|6.3.2.1.1.13 Kansai Paint Co. Ltd and Freeworld Coatings Limited|380
7|6.3.2.1.1.14 Aon South Africa (Pty) Ltd and Glenrand MIB Ltd|383
7|6.3.2.1.1.15 Glencore International Plc and Xstrata Plc|384
7|6.3.2.1.1.16 Sibanye Gold Limited and Newshelf 1114 (Pty) Limited|385
7|6.3.2.1.1.17 Arrowhead Properties Trust Ltd and Vividend Income Fund Ltd|386
7|6.3.2.1.1.18 BB Investment Company (Pty) Ltd and Adcock Ingram Holdings (Pty) Ltd|386
7|6.3.2.1.1.19 Vodacom (Pty) Ltd and Nashua Mobile (Pty) Ltd in Respect of Its Vodacom (Pty) Ltd Subscriber Base|387
7|6.3.2.1.1.20 RCS Card (Pty) Ltd and The Consumer Finance Business of the JD Group Ltd|388
7|6.3.2.1.1.21 Diageo South Africa (Pty) Ltd, Heineken International B.V., Namibia Breweries Ltd and Brandhouse Beverages (Pty) Ltd, DHN Drinks (Pty) Ltd, Sedibeng Brewery (Pty) Ltd|390
6|6.3.2.1.2 Conclusion|390
5|6.3.2.2 Effect on Particular Industrial Sector or Region|391
6|6.3.2.2.1 Case Law|392
7|6.3.2.2.1.1 Nasionale Pers Limited and Educational Investment Corporation Limited|392
7|6.3.2.2.1.2 Tongaat-Hulett Group Limited and Transvaal Suiker Beperk, Middenen Ontwikkeling (Pty) Ltd, Senteeko (Edms) Bpk, New Komati Sugar Miller’s Partnership, Tsb Bestuurdienste|393
7|6.3.2.2.1.3 Iscor Limited and Saldanha Steel (Pty) Ltd|394
7|6.3.2.2.1.4 Harmony Gold Mining Company Limited and Gold Fields Limited|395
7|6.3.2.2.1.5 Life Healthcare Group (Pty) Ltd and Aurora Hospital (Pty) Ltd|396
7|6.3.2.2.1.6 Ardutch B.V. and Defy Appliances (Pty) Ltd|397
7|6.3.2.2.1.7 AgriGroupe Holdings (Pty) Limited and AFGRI Limited|398
7|6.3.2.2.1.8 Hebei Zhongbo Platinum Co. Ltd and Eastern Platinum Ltd|400
6|6.3.2.2.2 Conclusion|401
5|6.3.2.3 Effect on Ability of Small Business and Historically Disadvantaged Persons to Become Competitive|402
6|6.3.2.3.1 Case Law|402
7|6.3.2.3.1.1 Nasionale Pers Limited and Educational Investment Corporation Limited|402
7|6.3.2.3.1.2 The Government Employees Pension Fund and Afrisam Consortium (Pty) Ltd (4 July 2012)|403
7|6.3.2.3.1.3 JD Group Limited and Ellerine Holdings Limited|403
7|6.3.2.3.1.4 Schumann Sasol (South Africa) (Pty) Ltd and Price’s Daelite (Pty) Ltd|404
7|6.3.2.3.1.5 Shell South Africa (Pty) Ltd and Tepco Petroleum (Pty) Ltd|405
7|6.3.2.3.1.6 Anglo American Holdings Ltd and Kumba Resources Ltd|408
7|6.3.2.3.1.7 Business Venture Investments 790 (Pty) Ltd and Afrox Healthcare Ltd|410
7|6.3.2.3.1.8 Masscash Holdings (Pty) Ltd and Finro Enterprises (Pty) Ltd t/a Finro Cash and Carry|411
7|6.3.2.3.1.9 Pioneer Hi-Bred International Inc and Pannar Seed (Pty) Ltd|412
7|6.3.2.3.1.10 Hyprop Investments Limited and Sycom Property Fund Managers Limited|413
6|6.3.2.3.2 Conclusion|415
5|6.3.2.4 Effect on Ability of National Industries to Compete Internationally|416
6|6.3.2.4.1 Case Law|416
7|6.3.2.4.1.1 Nedcor Limited and Standard Bank Investment Corporation|416
7|6.3.2.4.1.2 Tongaat-Hulett Group Limited and Transvaal Suiker Beperk, Middenen Ontwikkeling (Pty) Ltd, Senteeko (Edms) Bpk, New Komati Sugar Miller’s Partnership, Tsb Bestuurdienste|418
7|6.3.2.4.1.3 Iscor Limited and Saldanha Steel (Pty) Ltd|419
7|6.3.2.4.1.4 Nampak Limited and Malbak Limited|419
7|6.3.2.4.1.5 Distillers Corporation (SA) Limited and Stellenbosch Farmers Winery Group Ltd|420
7|6.3.2.4.1.6 Tiger Brands Ltd and Langeberg Foods International Ashton Canning Company (Pty) Ltd|421
7|6.3.2.4.1.7 Rhodes Food Group (Pty) Ltd and Del Monte South Africa (Pty) Ltd|422
7|6.3.2.4.1.8 Ethos Private Equity Fund VI and TP Hentiq 6128 (Pty) Ltd|423
6|6.3.2.4.2 Conclusion|423
5|6.3.2.5 Conclusion on Public Interest|424
2|Chapter 7: Consideration of Development Concerns in Enforcing South African Competition Law|429
3|7.1 Competition Law’s Contribution to the UN’s Development Goals|430
3|7.2 Case Law with Development Impact|431
4|7.2.1 Food|431
5|7.2.1.1 Bread|431
5|7.2.1.2 Wheat and Maize|434
5|7.2.1.3 Dairy|437
5|7.2.1.4 Poultry|441
5|7.2.1.5 Conclusion|442
4|7.2.2 Health|443
5|7.2.2.1 Medicine|445
6|7.2.2.1.1 Glaxo Wellcome (Pty) Ltd|445
6|7.2.2.1.2 GlaxoSmithKline (South Africa) (Pty) Ltd|447
6|7.2.2.1.3 Bristol-Myers Squibb (Pty) Ltd|449
6|7.2.2.1.4 MSD (Pty) Ltd|449
6|7.2.2.1.5 Aspen Pharmacare (Pty) Ltd and GlaxoSmithKline (South Africa) (Pty) Ltd|450
5|7.2.2.2 Medical Equipment|451
6|7.2.2.2.1 Adcock Ingram Critical Care (Pty) Ltd and Others|451
6|7.2.2.2.2 Hosanna Medical & Disposables CC and Shekinah Medical & Disposables CC|452
5|7.2.2.3 Conclusion|452
4|7.2.3 Housing and Sanitation|454
3|7.3 Summary and Conclusion|455
1|Part III: Conclusion|457
2|Chapter 8: Conclusion: Complex Relationship Between Industrial Policy, Competition Law and Development Concerns|458
1|Legal Provisions|464
1|Annexes|471
1|Bibliography|484
2|References|484
2|Case Law|517
2|Government Gazette Notices|525
2|Legislation|528
2|Webpages|529