Assessing the Merger Control Provisions of the COMESA Competition Regulations of 2004: Time for an Overhaul?

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The COMESA Competition Regulations (the ‘Regulations’) came into existence in December 2004 and was enforced beginning January 2013 with the establishment of the COMESA Competition Commission (the ‘CCC’). Over the last nine years, the CCC have published various Guidelines and Rules in support of the Regulations, to provide clarity and certainty to selected areas of enforcement, as is common practice by competition authorities. Astonishingly, however, the primary legislation has remained unchanged. While certain basic principles of competition enforcement have stood strong in the face of time, there is no dispute that markets have obviously changed since 2004 and the emergence of technologies and creation of digital ecosystems over the last decade has led to revised thinking and approaches to competition assessment framework. This paper canvasses and assesses potential areas of the Regulations which may be in dire need of an overhaul. The paper focusses on two procedural aspects of merger notification, which have direct impact on the effective review of mergers. Firstly, the appropriateness of the merger notification thresholds in relation to digital mergers. Despite the obvious presence of digital giants in most of the Member States, no digital merger feature among the 300+ transactions which have been notified to the CCC since inception. This begs the question of whether there is a legal enforcement gap in terms of the current merger rules. The paper finds that the turnover and asset value thresholds remain fit for purpose, but the lack of enforcement by the CCC in the field of digital mergers can be addressed by increased enforcement powers to support its catch-all provision under the Regulations, and an ‘obligation to inform’ on the large digital companies engaging in acquisitions which may affect COMESA.

The second focus area is the experience of the CCC with the non-suspensory regime. The paper finds that the current system contributes to an inefficient allocation of already limited resources towards investigating procedural breaches with limited beneficial enforcement impact. Having regard to the trend prevailing in other jurisdictions, the paper advocates for a shift to the suspensory regime which would allow the CCC to focus on breaches that have more significant impact on competition, including for instance exchanges of commercially sensitive information during the merger review period that would affect the ability of the target to operate independently in an event the transaction is abandoned or rejected by the CCC.