Sakeliga prevails in CompCom information request 

Despite sustained opposition by the Competition Commission, Sakeliga has obtained unprecedented access to the complete records of 20 Commission investigations into corporate transactions.

We will use these records – obtained under PAIA – to assess the extent of the Competition Commission’s arbitrary use of so-called “public interest grounds” to block or impose conditions on corporate transactions. The records form part of Sakeliga’s efforts to curtail and ultimately end the Commission’s political interference in business decisions.

Since problematic amendments to the Competition Act in 2018, the Commission has regularly invoked “public interest grounds” to force harmful concessions in respect of BEE, employment, local content, and other government policy preferences on companies and their owners. In this, the Commission has now moved far beyond the conventional mandate of competition regulators worldwide to establish itself as a super-regulator operating by its own rules and interfering in matters that have nothing to do with competition.

Today, deals before the Competition Commission have a greater chance of being obstructed based on racial considerations and other government objectives than on competition considerations. This conduct by the Competition Commission is now a major impediment to corporate action for even medium-sized companies in South Africa, obstructing, delaying, and deterring billions of rands worth of economic activity.

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Since first sending PAIA requests to the Competition Commission in 2022 and obtaining information from some affected companies, we began to develop a picture of how the Commission operated. We started compiling evidence of how the Commission appeared to be making up demands as they go on a case-by-case basis, as if to extract as many political compromises as possible from companies during crucial deal stages as a type of regulatory extortion for deal approval.

At some stage during our efforts at pinning the Commission down to a version of its public interest policy, it appeared to realise that its preferred approach of flying under the radar was not tenable. In March 2024 the Commission published its new Public Interest Guidelines. This document is, however, also highly problematic. In effect, the Commission is insisting that socio-economic objectives of the government are binding on private companies, thereby rupturing a vital and long-recognised public-private distinction, disregarding private property, and effectively part-nationalising many business transactions. We believe this activity of the Commission has been and continues to be economically devastating.

Sakeliga and our legal team are currently analysing the 20 transaction records now received. We will then consider the merits of litigation and/or further investigations, but more information is likely required. We have therefore already launched further PAIA applications. Since the Commission has now had to concede that Sakeliga may access the transaction reports, we expect it to comply more readily with subsequent PAIAs.

We also invite parties harmfully affected by the Competition Commission’s arbitrary interference in corporate transactions to contact Sakeliga. Sharing information confidentially will help us develop our approach and may be beneficial to companies considering how to handle unfounded demands from the Competition Commission during their deals.

For Sakeliga’s comments on the 2024 Public Interest Guidelines, click here.