ASCOLA Competition Law series
Edited by Josef Drexl, Laurence Idot and Joël Monéger
Chapter 5: The Treatment of Efficiencies in South African Merger Consideration
5. The treatment of eﬃciencies in South African merger consideration Geoﬀ Parr* The South African Competition Act has explicit public-interest objectives, including the promotion of employment, which sometimes conﬂict with other objectives such as eﬃciency and competitive prices. This chapter discusses the treatment of eﬃciencies in the Act, and the interaction of eﬃciency considerations with the public-interest consideration of employment. The chapter also discusses the deﬁnitive decision by the Competition Tribunal on eﬃciencies, the Trident/Dorbyl merger. In that decision, the Tribunal held that job savings cannot be counted as eﬃciencies in an eﬃciency defence of an anti-competitive merger, because the promotion of employment is in the public interest. 1 INTRODUCTION This chapter will consider some of the issues about eﬃciencies as they apply to South Africa, particularly in respect of merger consideration. The South African Competition Act, Act No 89 of 1998, is a well-drafted piece of legislation that has been successfully applied since 1999 by the three competition agencies established in terms of the Act. These institutions are the Competition Commission, which investigates mergers and complaints, decides on ‘intermediate’ mergers and refers all ‘large’ mergers and selected complaints to the Competition Tribunal. The Tribunal is a world-class adjudicative body that hears large mergers and complaints referred to it by the Commission. It also hears appeals on intermediate mergers ruled on by the Commission. In turn, the decisions of the Tribunal are subject to appeal to the Competition Appeal Court,...
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