Economic Theory and Competition Law
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Economic Theory and Competition Law

Edited by Josef Drexl, Laurence Idot and Joël Monéger

The context for this book is the increasingly complex relationship between economic theory and competition law which gives rise to lively political and academic debate on the direction competition law should take in a more global and innovation-oriented market place.
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Chapter 5: The Treatment of Efficiencies in South African Merger Consideration

Geoff Parr


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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