By: Anna Majavu
More and more small and medium enterprises are complaining that big companies are excluding them from involvement in the market and are approaching the Competition Tribunal for help says Competition Commission chairperson Mondo Mazwai. Mazwai spoke at the commission’s Competition Law, Economics and Policy Conference recently, saying that SMEs and black-owned businesses had already brought nine cases to the commission about being excluded from the market since the Competition Act was amended in 2019.
The amendment was made to ensure that the Competition Commission took into account “the promotion of a greater spread of ownership”, especially by historically disadvantaged people, whenever it was asked to decide if companies could merge. The aim of this was “to open up the economy to greater investment in new businesses, with a focus on opening up markets for SMEs and Black-owned business”, said Mazwai.
Since it was amended, the Competition Act not only prevented companies from blocking a business’ entry into a market, or expanding but also said that companies may not practice conduct that prevented a business from “participating” in a market or finding an opportunity to do business. However, it is not a simple process for an SME to argue successfully that it was being kept out of the market by bigger companies because there were often disputes about “relevant markets, dominance, exclusionary conduct and anti-competitive effects”, said Mazwai.
The debate now is whether a firm can say I am a small firm or a black-owned firm that is being excluded and, therefore, I require interim relief for a short period of time, because a dominant firm is refusing to deal with me,” she added. If SMEs could only get the Competition Tribunal to rule against an anti-competitive bigger company if that business had completely closed off the markets to them or caused actual harm to consumers by not allowing the SMEs to do business, this might be very difficult for SMEs to prove, Mazwai said.
She also appeared to concede that deconcentrating the market or making it more inclusive for SMEs to sell their goods and services was happening at a snail’s pace. The Competition Commission’s “work in the pursuit of competitive and inclusive markets would not result in overnight changes to transforming the economy and levels of participation by SMEs and companies owned by historically disadvantaged people”, said Mazwai. Instead, the commission aimed to be persistent and bring about incremental changes that might “create economic possibilities for our grandchildren” by contributing to the transformation of the economy “one case at a time”.
