The Department of Trade, Industry and Competition (the dtic) has released a competition policy intended to protect and create jobs and advance industrial development. “Our competition policy aims to address our high levels of economic concentration and promote effective competition that supports industrialisation, builds dynamic firms, protects and creates jobs, and promotes economic inclusion and transformation,” the document states.
Some of the tools identified for encouraging the desired type of competition are:
- Regulating mergers and acquisitions.
- Tackling high concentration of economic activity and abusive behaviour on the part of dominant companies.
- Taking proactive measures to open markets and develop a more inclusive economy.
The policy states that regulation of mergers and acquisitions should not only consider the impact on competitor companies but must take public interest into account. The impact on employment would be a prime consideration when approving a merger, along with broad-based ownership and the potential for supplier development and localisation.
The policy takes the view that market dominance not only limits market access by smaller entities but may also stifle innovation, with negative impacts on consumers and businesses all along the supply chain. The policy notes that recent amendments to the Competition Act – which have still to be signed into law – should facilitate action to combat concentration and its consequences.
The policy refers to the way in which digital business platforms have enabled a number of companies in various parts of the world to rise to positions of dominance in extremely short periods of time. It advocates careful monitoring of such dynamics and refers to practices in other countries that have attempted to curtail them.