Draft Guidelines On The Exchange Of Information Between Competitors Under The Competition Act No.89 Of 1998 (As Amended)

    BUSA

    BUSASUBMISSION BY BUSINESS UNITY SOUTH AFRICA

    Background

    BUSA is a confederation of business organisations including chambers of commerce and industry, professional associations, corporate associations and unisectoral organisations. It represents South African business on macro-economic and high-level issues that affect it at the national and international levels. BUSA’s function is to ensure that business plays a constructive role in the country’s economic growth, development and transformation and to create an environment in which businesses of all sizes and in all sectors can thrive, expand and be competitive.

    As the principal representative of business in South Africa, BUSA represents the views of its members in a number of national structures and bodies, both statutory and non-statutory. BUSA also represents businesses’ interests in the National Economic Development and Labour Council (NEDLAC).


    Introduction

    BUSA welcomes the publication by the Competition Commission of the draft Guidelines on the exchange of information between competitors under the Competition Act No.89 of 1998 (as amended) (“the guidelines”). BUSA believes the Guidelines will go a significant way towards not only providing certainty on information and data collection between competitors, but also for trade associations.

    As you are aware, BUSA participated in the Business Consultative Forum hosted by the Competition Commission on 27 March 2017, at which the draft guidelines were presented. Following this, BUSA submitted substantive comments on the initial draft, which we note have in many cases been addressed in the draft guidelines gazetted for public comment on 14 July 2017. The comments that follow are therefore for the most part a repetition of earlier comments and serve to reiterate, where necessary, BUSA’s comments on the earlier draft.


    Detailed Comments

    Sub-heading 6. There is a typographical error in the sub-heading: “assesing” should read “assessing”.

    Paragraph 7.3.1.1. In line 8 of paragraph 7.3.1.1. there is a typographical error, and a suggested correction to the sentence reads as follows: “In addition, once the information has been collated, there need[s] to be steps taken to ensure that the disaggregated information remains confidential.”

    Paragraph 7.3.1.2. It is useful that the Guidelines list some of the categories of information that can be legitimately exchanged without violating the Act. However, it would be beneficial and helpful (particularly for smaller businesses and trade associations with limited capacity) to provide a more comprehensive list of categories of information that can be legitimately exchanged.

    Paragraph 7.3.2. (in its entirety) A frequent challenge that arises for business is when companies are requested to participate together in discussions with Government for the purposes of enterprise development; or at the CCMA for the purposes of a collective bargaining demand. We note the guidelines provide extensive guidance on the enterprise development circumstance, yet businesses are often regarded as resistant when they do not wish to provide such information. In this regard, we believe that it is essential to raise awareness within Government and Business and provide further mechanisms to protect businesses in such circumstances.

    A further challenge arises in the situation where businesses, particularly smaller businesses form a network of support, mentoring and coaching to enable them to leverage their access to market and growth – surely this is to be encouraged, rather than prohibited?

    Paragraph 7.3.3.6. In line 4 of the paragraph, the word “publically” should read “publicly”.

    Paragraph 7.3.7.1 In relation to benchmarking, it appears as if the guidelines are premised on the assumption that this takes place through independent researchers. However, this is not always the case, and in many instances firms and industry associations conduct their own research, particularly with tools such as online surveys, where any party can put a survey together and request others to complete this. Consideration should be given to this in the Guidelines.

    Paragraph 7.3.7.3. The opening sentence of the paragraph should be reworded for clarity as follows: “Information exchanges can also arise through other third parties such as independent consultants, university research centres and other entities not considered to be [a] competitors of firms.

    Paragraph 8.1. BUSA welcomes the fact that, notwithstanding the general approach outlined by the Guidelines, the Competition Commission / Tribunal may consider information exchange on a case-by-case basis, taking into account market circumstances and the nature of the information exchanged.

    Paragraph 8.2. The approachability of the Commission in terms of providing upfront guidance regarding the exchange of information is welcomed.


    Conclusion

    The Guidelines will undoubtedly go a considerable distance towards addressing the current uncertainty within business on what constitutes legitimate exchange of information. Overall therefore, BUSA welcomes the publication of the draft Guidelines and believes the final version of the Guidelines will assist businesses and trade and industry associations determine the parameters within which the exchange of information may legitimately take place.

    Click here to download Draft Guidelines on the Exchange of Information between Competitors under the
    Competition Act

     

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