Buyer beware – new competition laws restricting dominant firm purchases

  • South Africa
  • 02/15/2019
  • Financial Institutions Legal Snapshot

The Competition Amendment Act was signed into law on 13 February 2019. The Act’s aim is to ‘open up new opportunities for many South Africans to enter various sectors of the economy and compete on an equal footing’. This sentiment is the spirit throughout the Act and the draft regulations that are undergoing an extensive comment process.

The Act requires that the Minister make regulations in relation to the new provisions that restrict purchases by firms considered dominant in designated sectors (the Buyer Power provisions). The draft regulations have yet to be signed into law.

The Buyer Power provisions prohibit a dominant firm in a designated sector to directly or indirectly, require from or impose on a supplier that is a small and medium business or a firm controlled or owned by historically disadvantaged persons (the ‘designated class’), unfair prices or other trading conditions. Furthermore, the dominant firm has to be in a position to demonstrate, if it did not purchase from a small and medium business or a firm controlled or owned by historically disadvantaged persons, that it did not avoid such a purchase to avoid the Buyer Power provisions (continue)

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