Competition policy seeks to ensure that markets are competitive, open and not subject to undue power by dominant firms. For this reason, it attracts much controversy and debate, as it should be.
A recent Sunday Times article however goes well beyond fair public comment and provides an unbalanced and unfair view of the Competition Commission and commissioner Doris Tshepe, relying on anonymous sources.
With the limited space available, we seek to set the record straight.
The commission is accused of not delivering on its mandate, with the suggestion of negligence and underperformance.
This is a surprising allegation, given a solid record of evidence of successes by the commission, including over the past two years. Three examples illustrate this.
In 2023, the commission initiated a complaint against Johnson & Johnson’s (J&J) in respect of its monopoly drug treating multi-drug resistant tuberculosis, which is prevalent in SA. J&J extended its patent in South Africa and globally, and raised the price to the department of health. Following this investigation, J&J announced it would not enforce its secondary patent in South Africa and 133 other low- and middle-income countries, thus opening the market for entry of generic manufacturers. J&J has also agreed to an approximately 40% price drop in South Africa, which has resulted in significant savings to the fiscus.
In July 2023, the commission completed its first market inquiry into digital platforms conducted in line with the amendments to the Competition Act. Small distributors in townships provided evidence of how they were excluded from markets. The inquiry put in place remedies aimed at promoting inclusion and participation in the digital economy by new players and historically disadvantaged people. Google agreed to alter its search page to promote South African platforms. Booking.Com agreed to end both wide and narrow price parity for South African establishments. This has only been achieved in Germany and France. The value of these remedies to consumers and small businesses has been estimated at R1.1 billion, opening a key lifeline to many businesses who were constrained by unfair market features.
Since September 2022, the commission finalised more than 560 mergers, including a number of complex mergers. The commission recommended prohibitions for three mergers, all of which were accepted by the Competition Tribunal. The merger conditions provided support of R2.2 billion to firms owned by historically disadvantaged people. Assets worth R37 billion were committed to the account of workers, through employee-shareholder commitments made by firms, in line with the law. An estimated 11 000 jobs were saved.
The commission has referred more than six cases of abuse of dominance to the tribunal in key sectors of the economy. The commission’s performance has been steady at above 80% of performance target. It ended the 2023-24 financial year at 93% of target and is at 87% for the first two quarters of the 2024-25 financial year.
These achievements are the result of a professional, highly motivated and skilled staff complement, who deal with some of the most challenging parts of our law, and often where litigants against commission decisions are well-resourced. The characterisation of low staff morale is clearly at odds with the facts. The achievements are attained in tight fiscal conditions in which the commission constantly reviews areas in which to allocate resources and this too generates debates, as one can expect in an organisation.
The article repeats allegations previously ventilated about 10 months ago relating to internal staffing matters, and fully responded to by the commission at the time.
As in any large institution, there will be a diversity of views and the commissioner encourages debate and the ventilation of views, as this enhances the quality of the final decisions made by the institution. This is very different to the picture that has been painted and, in fact, the commission is proud of the space it provides for deep reflection and discussion.
In trying to make a case, the article states that it relies on a copy of a letter to the then minister of trade, industry and competition from unnamed employees of the commission regarding the conduct of the commissioner. This includes questions relating to international travel.
These allegations were dealt with at the time to the satisfaction of the then minister, Ebrahim Patel.
However, it is worth noting that the commission deals with an area of work that has significant international dimensions. First, many areas of the commission’s work relate to market conduct of global firms or transactions (such as mergers and cartel investigations) with cross-border implications. Competition regulators globally compare notes on ways to address such market conduct. Second, competition policy is shaped by global developments and thinking. An example is the focus on digital markets, where authorities as diverse as the United States, Kenya, Nigeria, India, China and the European Union are grappling with how to adjust conduct of competition policy to new market-dynamics.
The commission contributes to these discussions and benefits from new insights and learnings. This requires travel to other jurisdictions by senior commission members, including the commissioner.
The article repeats the Sunday World claims published 10 months ago regarding conflict of interest, and bases this on the fact that the commission had briefed advocate Ngwako Maenetje, the commissioner’s partner, as counsel in certain competition matters.
What do the facts indicate?
Maenetje is a senior counsel practising at the Johannesburg Bar since 2000. He has acted as counsel for the commission in a number of cases from as early as 2002 representing the commission before the Competition Tribunal, the Competition Appeal Court, the Supreme Court of Appeal and the Constitutional Court prior to the appointment of Doris Tshepe as a commissioner.
Since the appointment of Tshepe as the commissioner on 1 September 2022, the commission has not briefed Maenetje in any new matters. Currently, there are two pending matters in which he has been acting for the commission before the tribunal. Maenetje was appointed by former commissioners to act for the commission in these two pending matters. These matters had not been finalised on 1 September 2022. Maenetje remained on brief on these matters at the request of the commission’s chief legal counsel.
Shortly after Tshepe assumed office as the commissioner, she informed Minister Patel at the time that Maenetje was on brief for the commission in pending matters in which he was briefed prior to her appointment.
The commissioner has recused herself from any decision making and any other act related to the pending matters. She does not approve invoices or give instructions related to payments of Maenetje’s invoices or their processing.
The article criticises the commission for apparent late submission of its annual report. The facts are as follows.
The commission submitted its draft annual financial statement (AFS) and performance information to the Auditor General of South Africa and the treasury on 31 May 2024 in line with the Public Finance Management Act. The auditor general submitted its audit report in September 2024 which provided the commission with a clean audit for the financial year 2023-24. This is a fifth consecutive clean audit outcome for the commission. The annual report has since been submitted to the trade, industry and competition department.
In summary, fair and balanced reporting can enhance public discussions on the work of the commission. Publishing anonymous allegations and impugning the character of commission and the commissioner does not allow for fair and balanced public discourse.
Siyabulela Makunga is the spokesperson for the Competition Commission.
