Controversial new antitrust law enacted in South Africa

President Cyril Ramaphosa will today sign into law the Competition Amendment Bill, which will strengthen regulations against anti-competitive behaviour in industrial markets.
The bill, which was approved by the National Assembly in October 2018 and endorsed by the National Council of Provinces in December 2018, is a step in the right direction for SMEs, economic inclusion and it opens up the economy to fresh investment and innovation.

It also provides a clear mandate to the competition authorities to address economic concentration in a balanced manner and to promote economic transformation, the Presidency said on Monday.

“The bill provides greater clarity to firms and investors on prohibited practices and what constitutes abuse of dominance.

“Another expected benefit is improved administrative efficiencies in the work of the competition authorities and facilitative powers to the executive,” the Presidency explained.

Additionally, the amended legislation seeks to combat concentration and economic exclusion as core challenges that contribute to slower and less dynamic growth, lower employment and greater inequalities, as well as socio-political conflict.

The Presidency said this will enable a more effective approach to concentration, with a focus on improving outcomes for small and black-owned business, and strengthen the institutions involved in managing competition policy and law.

“These changes are in the long-term interest of both business and organised labour and benefit small to medium-sized companies through a pro-growth, transformation model that can help lift investment and advance economic inclusion,” the Presidency said.

The signing ceremony will take place this afternoon at the Tuynhuys Chambers in Parliament. Economic Development Minister Ebrahim Patel, who campaigned fiercely for the bill’s codification, will join the ceremony along with a group of stakeholders.

A&O competition co-head joins Simpson Thacher

Simpson Thacher & Bartlett has hired Allen & Overy’s (A&O) former competition co-head John Terzaken in the US.

Eversheds and Quinn lead roles in OnTheMarket case

The owner of the property website OnTheMarket has secured a victory in the Competition Appeal Tribunal after it ruled that a Cheshire-based estate agent breached its contract when it advertised its properties on rival websites Zoopla and Rightmove.

Agents’ Mutual, which is owned by a number of estate agents including Savills and Knight Frank, claimed that estate agency Gascoigne Halman broke a condition of its membership when it listed its properties on Zoopla and Rightmove. The agreement stated that in order to use its website, all estate agents were allowed only to list properties on their site and one other competing portal.

Gascoigne Halman argued that the “one other portal” rule was anti-competitive and that it amounted to a collective boycott of rivals.

Eversheds Sutherland partner Lesley Farrell acted for the claimants, instructing Blackstone Chambers’ Alan Maclean QC and Monckton Chambers’ Josh Holmes QC; while Quinn Emanuel Urqhuart & Sullivan partners Boris Bronfentrinker and Kate Vernon acted for the defendants, instructing Paul Harris QC and Philip Woolfe QC at Monckton Chambers.

Mr Justice Marcus Smith ruled that Gascoigne Halman’s case was “untenable” and rejected it. He said: “For the reasons we have given, in some circumstances horizontal co-operation even between competitors can be perfectly acceptable in competition terms; and the use of exclusivity requirements – like the One Other Portal Rule – can, as we have found, be similarly acceptable, either because competition law is not infringed at all (as here) or because an anti-competitive restriction is objectively necessary (as we would have found, had our conclusions on “by object” and “by effect” infringements been different).”

Smith J continued: “It would appear inherently plausible that, all else equal, the entry of a new portal would be pro-competitive in that estate agents would have an additional or alternative portal on which to advertise their properties; and the property buying public would have an additional or alternative portal through which to view such properties.”

Farell said: “Gascoigne Halman had claimed that a number of the terms within OnTheMarket’s agreements with agents listing on the portal were anti-competitive. We are very pleased that the Competition Appeal Tribunal has determined, unanimously, that there is no basis for those claims and that the agreements are in fact ‘pro-competitive’.

Agents’ Mutual CEO, Ian Springett, added: “The aim of our portal has been to increase competition and choice for estate agents and property seekers. I am delighted that the Competition Appeal Tribunal has recognised that OnTheMarket’s entry into the online property portal market is pro-competitive and that, in accordance with the advice we had been given, the terms it has with its agents are compatible with competition law. ”