The CRC Series on Competition, Regulation and Development
Edited by Paul Cook, Raul Fabella and Cassey Lee
Chapter 12: The Role of South African Competition Law in Supporting SMEs
Kim Kampel INTRODUCTION The South African Competition Act No. 89 of 1998 reﬂects the government’s aims to incorporate particular public interest policies that reﬂect the changing socioeconomic and political context within which the Act was promulgated. One of the Act’s explicit purposes is to ‘ensure that small and medium-sized enterprises have an equitable opportunity to participate in the economy’. Such policy considerations are embodied in certain provisions of the Act, which is interesting from the perspective of a developing country with a ﬂedgling competition regime. Nearly ﬁve years on, it is useful to examine how the Act has fared. The ultimate goal of any competition policy is to enhance consumer welfare. The premise is that markets are not competitive where it can be shown that prices increase or the choice of product or service available to the consumer is limited as a result of monopolistic conduct. However, the South African Act speciﬁcally mandates attention to small and mediumsized enterprises’ (SME) interests. Therefore, South African competition law is in theory SME-friendly, insofar as it proclaims to protect SME interests by promoting access to markets as well as acknowledging their rights to participate in the economy. However, the enforcement of competition law may in reality sometimes be incompatible with SME interests. The diﬃculty is precisely that frequently the larger, integrated ﬁrm is more eﬃcient than its SME counterpart. Large ﬁrms are able to leverage their relative strength in the market to source at lower cost and to...
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