Increasing African antitrust enforcement places focus on due process
Competition authorities across Africa are increasingly taking enforcement action, such as against cartels and abuses of dominance, where significant financial and sometimes individual criminal sanctions can be imposed. These enforcement practices are placing more focus on the institutional design of competition regimes, where authorities often play investigative, prosecutorial and adjudicative roles, and the availability of effective judicial scrutiny is questionable. Whereas many African competition authorities have actively sought to rely on substantive aspects of competition law from leading international competition regimes (such as the European Union (EU)), there is a strong case that the procedural aspects from these jurisdictions should also now be followed in order to afford businesses due process during competition investigations.
African competition authorities have primarily focussed on mergers in the first years after becoming operational. Increasingly authorities across the continent are now also actively enforcing other areas of their regulatory framework including cartels and abuses of dominance. These offences often give rise to financial sanctions, such as fines of up to 10% of turnover, and, in some cases, criminal sanctions on directors and managers.
As part of this enforcement action, authorities are seeking to advance complex theories of harm that are reliant on material economic evidence. For example, the COMESA Competition Commission is investigating potential market foreclosure in broadcasting markets; the Competition and Consumer Protection Commission, the Zambian competition authority, has been pursuing excessive and discriminatory pricing cases; and the Competition Authority of Kenya has pursued an “essential facilities” competition case.
In terms of institutional design, many African competition authorities are based on the ‘integrated’ model, where they simultaneously play investigative, prosecutorial and adjudicative roles. Some of these authorities may contest this classification on the basis that the powers of adjudication are often reserved to a governing board that is notionally independent from the authority’s secretariat. While the practical impact of this independent board is questionable, it is common cause that the model employed in many jurisdictions sharply contrasts with the ‘bifurcated’ model where an authority must argue its case before a separate and often quasi-judicial body for adjudication.
These due process concerns arising from the implementation of the integrated model must be seen in the context of the contentious theories of harm being advanced in some enforcement cases, as well as the lack of procedural rights for respondents in some jurisdictions. In the latter regard, it is not unusual for respondents to only receive a formal and comprehensive notification of the allegations upon the conclusion of an investigation. Further, in many cases, there is no hearing on matters and respondents do not necessarily have a right to appear before the relevant decision-making forum. Moreover, due to the novelty of competition law in these jurisdictions, the availability of effective and timely judicial scrutiny of competition authorities is questionable.
Concerns relating to due process within integrated competition authorities are not a new phenomenon in the global competition landscape. For example, concerns regarding the role of European Commission, a similarly integrated authority, have been raised for decades, and have led to a number of procedural reforms, such as the establishment of the post of the Hearing Officer, an independent official, to enhance the impartiality and objectivity in competition proceedings. As part of this role, the Hearing Officer convenes an oral hearing where respondents can present their views in antitrust and merger matters to a wider audience.
Whereas many African competition authorities often place heavy (and sometimes almost exclusive) reliance on leading international cases (primarily EU cases) as part of their own enforcement actions, there is a strong case that the procedural aspects from international regimes (such as the use of an independent Hearing Officer) should also now be followed in order to afford businesses due process during competition investigations. Due process concerns are already driving regulatory reforms in some jurisdictions. For example, the competition regime in Botswana was amended last year to introduce a bifurcated model, similar to the South African regime where the Competition and Consumer Protection Authority must now plead its cases before the Competition and Consumer Tribunal.
While the introduction of a bifurcated model is one way to address due process concerns, procedural reforms present an alternative way while still retaining an integrated competition authority. In this regard, the procedures of such authorities must be reviewed in order to give respondents a meaningful participation in competition proceedings. In this regard, the regularisation of procedural rights is a priority area given the evolution of African competition authorities from primarily acting as merger control bodies to becoming broader antitrust enforcement authorities.