From gun-jumping mergers to cartel conduct, African competition regulators ramp up enforcement

Competition regulators across Africa are growing in number, with many building up an impressive track record in the scope of their work and enforcement capabilities. This is the case in established national competition authorities, such as those in Egypt, Kenya, Mauritius and South Africa, among others, but also those that have only been in place for a few years.

For example, Mozambique’s competition authority, the CRA, has hit the ground running since becoming operational three years ago. It has handled more than 40 merger transactions, filed between August 2021 and November 2023, issued its first prohibition in the context of a horizontal price-fixing case and imposed penalties regarding breaches of procedural obligations and gun-jumping.

Gun-jumping (or unauthorised implementation of mergers) has also been on the radar of other African regulators, including in Angola, Morocco and Tanzania. Morocco’s Competition Council, which makes 150 merger control decisions a year, issued its first gun-jumping penalty in 2022 when it imposed a USD 1 million penalty on a Swiss chemical company.

Meanwhile, Tanzania’s Fair Competition Commission (FCC) has been vigorously investigating mergers that should have been notified. These have come to light in various sectors, including edible oils and sugars, financial services, hospitality, manufacturing, oil and gas, and plastics and metals. Undisclosed settlement agreements have been reached in two cases.

Anti-competitive conduct

African regulators are also increasingly cracking down on restrictive business practices, particularly cartel conduct and abuse of dominance cases.

No fewer than 16 cartel investigations were on the books of Zambia’s Competition and Consumer Protection Commission (CCPC) in 2021 when it also conducted five dawn raids. In the following year, the CCPC pursued seven cartel cases. Several companies have been fined for engaging in price-fixing cartels, most recently three roofing manufacturers that were fined 8.5 percent of their 2020 turnover.

While it is often local companies that are implicated in restrictive business practices in African jurisdictions, large multinationals have also been in the spotlight.

A large FMCG multinational reached a settlement agreement with the Competition Authority of Kenya in January 2023 over alleged abuse of buyer power. The allegation was that this multinational had unilaterally revised its payment terms with its suppliers, many of whom were small and/or medium-sized businesses.

In Malawi, a multinational company escaped financial and administrative sanctions in July 2023 when the country’s High Court ruled that the Competition and Fair Trading Commission did not have a legislative mandate to impose such sanctions.

That gap in the regulator’s mandate has now been closed. On July 1, Malawi’s Competition and Fair Trading Act 2024 came into effect – specifically empowering the regulator to issue administrative orders, including financial penalties, for competition law and consumer protection contraventions.

Regional regulators show their mettle

While national competition regulators are proving increasingly effective within their own national borders, regional regulators are making their presence felt across borders.

Regional African competition authorities include those for the Common Market for Eastern and Southern Africa (COMESA); the Central African Economic and Monetary Community (CEMAC); the East African Community (EAC); the Economic Community of West African States (ECOWAS); and the West African Economic and Monetary Union (WAEMU).

Further, the Southern African Development Community cooperates on competition matters in the region and the Africa Competition Forum comprises an informal network of African competition authorities with the aim of promoting the implementation of competition polices both regionally and nationally.

The African Continental Free Trade Area (AfCFTA) is also playing an important role in shaping competition law across Africa. The next major milestone in pan-African competition regulation is the establishment of a continental competition regulator under AfCFTA.

The AfCFTA Competition Protocol was adopted in February 2023 and, although it is not yet known when the new continental regulator will be in place, this is expected to further strengthen competition law enforcement capacity and collaboration across Africa.

The protocol aims to create an integrated and unified African continental competition regulation regime that brings together competition policies already in place on a national, regional and continental level.