African antitrust authorities tackle competition concerns arising from Covid-19 pandemic

Posted in Competition Southern Africa Blog post

While South Africa has adopted a package of antitrust measures to either tackle exploitative conduct or facilitate a coordinated response, other antitrust authorities across Africa have also taken enforcement action to address issues arising from the Covid-19 pandemic. To date, this action has primarily focussed on addressing allegations of price gouging and supply constraints of essential foodstuffs and protective and hygiene products. As the pandemic impacts other African jurisdictions, it could be expected that more authorities will take similar action. Moreover, as other jurisdictions reach critical levels of infections, authorities may follow the South African example in adopting measures facilitating coordinated responses to the pandemic.

The antitrust response to the Covid-19 pandemic has been widespread with authorities in East, West and Southern Africa taking action. For example, in early March, the Federal Competition and Consumer Protection Commission (FCCPC), the Nigerian competition authority, issued a stern warning that the price gouging of basic safety and protective apparel (such as face masks and latex gloves), as well as personal hygiene products, like sanitizers and anti-bacterial wipes, was contrary to the Nigerian competition legislation. While the FCCPC considers that such conduct is contrary to consumer protection provisions, it also considers that price hikes could amount to a conspiracy between businesses.

On 20 March 2020, the Competition and Consumer Protection Commission (CCPC), the Zambian competition authority, announced that increased prices for sanitary products (e.g. masks, gloves and hand sanitizers) constitute excessive pricing contrary to Zambian competition legislation. The CCPC announced that investigations were already underway.

Similarly in Kenya, the Competition Authority of Kenya (CAK) announced that it was investigating a number of exclusive agreements facilitating price hikes and the hoarding of essential foodstuffs (such as maize flour, wheat flour, edible oils and rice), hand sanitizers and toilet paper. The CAK has directed all distributors to immediately remove exclusivity clauses from agreements and provide their products on a non-discriminatory basis.

As the Covid-19 pandemic impacts other African jurisdictions, it could be expected that more authorities will take similar action to tackle exploitative conduct in the face of panic buying and heightened demand for hygiene products. These authorities will have noted the two-fold approach of the South African government of not only tackling exploitative conduct but also providing exemptions to facilitate a coordinated response between competitors in various sectors.

A similar approach is already being followed in Namibia where the Namibian Competition Commission (NCC) has warned against excessive pricing and collusive behaviour through price-fixing by retailers and suppliers while indicating that it was in discussions with the Namibian government. As part of these discussions, the NCC’s position is that competition law enforcement should not impede necessary cooperation between businesses to deal with the current crisis and ensure security of supplies of essential products and services.

Given the speed with which the pandemic can escalate once local transmission has taken root, it is advisable that the groundwork for these antitrust contingency measures in all jurisdictions is undertaken on an expedited basis.

The author would like to thank Mbali Msimang, Associate Designate, for their assistance with this blog.

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