Africa: The growth and parallel nature of African antitrust enforcement action

8th Feb 2022 | Source: Baker McKenzie

African antitrust authorities have demonstrated unity of focus in their domestic investigations and prosecution of arrangements relating to the supply of school uniforms. The subject matter of the investigations has chiefly been directed at two core issues: (i) the pricing behaviour of suppliers; and (ii) the existence and impact of exclusive supply arrangements between school uniform suppliers and schools. While these investigations, in and of themselves, are interesting, it is unsurprising that pricing behaviour and exclusivity arrangements have come under the scrutiny of antitrust authorities. What is perhaps most distinct about these investigations is the parallel nature of the enforcement action on the continent, which has taken place in relation to a key sector that underpins most national development plans and policies. In particular, the following bears mentioning:

In South Africa and on the back of a number of competition complaints, the authority initiated an investigation giving rise to the conclusion of settlements with suppliers. On 10 January 2022, the authority proceeded to issue guidelines relevant to the school uniform investigation.
The Egyptian competition authority also issued a decision impugning an exclusivity arrangement between a school and uniform supplier.
Similarly, Malawi's Competition and Fair Trading Commission issued a warning, threatening enforcement action against institutions engaging in exclusive supply agreements in this sector.
Zimbabwe's Competition and Tariff Commission blocked an agreement between a school and two uniform and stationery suppliers after a complaint was lodged and consequent investigation had been conducted.
The Eswatini Competition Commission also investigated exclusive supply agreements for the supply of school uniforms and found these agreements to be a violation of local legislation, declaring such agreements to be unlawful and invalid.
The Namibian Competition Commission issued an advisory notice, cautioning market players on the potential anticompetitive nature of exclusive arrangements, advising schools to refrain from these agreements or risk investigation.

What is clear about these developments is the multi-jurisdictional and parallel focus of competition law authorities on the continent. Not only are regulators robustly ramping up on enforcement activity but are, without question, targeting similar sectors and antitrust issues. Firms that have a pervasive physical presence in Africa should ensure rigorous antitrust enforcement in all jurisdictions to avoid coming under the spotlight, not just once, but seemingly across jurisdictions where authorities are demonstrating a unity of focus, enforcing local laws with equal vigour.

By Lerisha Naidu, Partner, and Jarryd Hartley, Candidate Attorney, Competition & Antitrust Practice, Baker McKenzie Johannesburg