Competition Commission signs accord with fellow BRICS nations

A hallmark of the current global competition law environment is the extent to which national authorities seek to cooperate and share knowledge, experience and best practice. Bodies such as the International Competition Network (ICN) where regulators interact at conferences around the world have allowed fledging regulators to rapidly develop the skills needed to become meaningful enforcers in their jurisdiction – that should sound as a warning to those who might ignore new regulations in the hope that teeth will only be bared in years to come.

30 May 2016 2 min read Competition Alert Article

While increased cooperation among regulators means there is less room to hide from competition regulation, there are also advantages to be gained. In particular, the lack of harmony between regulatory approaches across jurisdictions remains a challenge that sharing of best practice can help to alleviate. In multi-jurisdictional notifications, cooperation between regulators can be a double-edged sword: if done sensibly, time tables can be better managed and key issues addressed consistently; but if managed badly, issues or peculiar policies in one jurisdiction can contaminate the process in another.

Either way, the world of competition regulation is getting smaller by the day and the latest development for South Africa (already a well-regarded voice on the ICN stage) is the conclusion of a Memorandum of Understanding (MOU) between the competition regulators in Brazil, Russia, India, China and South Africa (BRICS). Although South Africa is in some ways the poor cousin, from a competition perspective the country is arguably a cut above the other BRICS regulators and will no doubt contribute meaningfully to the alliance.

Some key provisions of the BRICS MOU are the following:

  • The MOU aims to promote and strengthen cooperation in law and policy through the exchange of information and best practice, as well as through capacity-building. This will likely mean secondments between the relevant authorities, so one might expect to find the Commission’s investigatory teams to be more cosmopolitan with Chinese, Russians, Indians and Brazilians in the line-up.
  • Joint studies into competition issues common across the respective markets might be organised. Although the economies of the respective countries are different, it will be interesting to see what is identified as a worthy joint study.
  • Some cooperation in investigations that straddle the relevant jurisdictions is envisaged. It is not clear whether this extends to merger investigations or only competition law violations. Either way, the MOU is at pains to record that any confidentiality regime will need to be respected, so merging parties, or respondents to investigations, in South Africa should not be concerned that their confidential submissions will be shared without their knowledge and consent. More generally, learnings from investigations by one regulator into an industry could be shared with the others – so that, for instance, a cartel uncovered in India among companies also active in South Africa, Russia or China could expect some scrutiny in those jurisdictions, and vice versa.

The MOU envisages a BRICS International Competition Conference every two years. The first was held in Durban in 2015.

It remains to be seen how simpatico the BRICS regulators will ultimately be, given the geographic disparity and differing development imperatives, but the conclusion of the MOU does provide opportunities for the development of policy and best practice across all five jurisdictions involved. This may also have ramifications among Southern African regulators, where the South African Commission has a strong voice.

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