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The Third Annual Competition Commission, Competition Tribunal and Mandela Institute
Conference on Competition Law, Economics and Policy in South Africa and Celebration of
10 years of the Competition Act and Competition Authorities
Who to Call?
Concurrent Competition Jurisdiction in the South African Electronic Communications Sector
Heather Irvine and Lara Granville1
The Competition Amendment Act aims to amend the provisions of the Competition Act governing
the jurisdiction enjoyed by the competition authorities and other regulators, including the
telecommunications and broadcasting regulator, the Independent Communications Authority of
South Africa (“ICASA”).
In this paper, we examine various models for regulation of the sector employed worldwide and
compare the position in terms of the Competition Act, 1998 (“the Act” or “the Competition Act”), the
Telecommunications Act, 1996 and the Electronic Communications Act, 2005 (“the ECA”). We ask
whether the competition authorities and ICASA have been able to effectively exercise jurisdiction to
date in order to foster and enforce competition in the South African electronic communications
sector. We then examine the provisions of the recently enacted Competition Amendment Act and
ask whether these provisions will enhance competition in this vital sector of the economy.
Regulation of the Electronic Communications Sector
The electronic communications sector is characterised by highly complex products and services
and rapid technological advances. It is accordingly essential to have detailed regulations governing
aspects such as technical standards, interconnection, numbering and spectrum allocation. Since
the sector is a vital component of the national infrastructure required for economic growth and
development, there are political as well as practical reasons for regulating aspects like licensing for example, the need to limit foreign ownership, or the desire to facilitate universal access.
At the same time, the industry is subject to the same economic forces as any other sector of the
economy, the most powerful of which is competition. Over the last decade, electronic
communications industries all over the world have become increasingly competitive, as stateowned monopolies have been privatized and joined by a range of new players as technologies
converge. The benefits of the increasing competition in this sector are enormous, given the
pervasive impact of telecommunications on the competitiveness of all firms and sectors. However,
a process of liberalization, new entry and technological innovation may not in themselves prove
strong enough to deliver a competitive market and all of its associated benefits to consumers - like
lower prices, innovation and a wider range of choices.2 Clear rules which both foster competition
1
Deneys Reitz Inc.
Globally, the sector is characterized by former state-owned monopolies, and high barriers to entry due to enormous
infrastructure investments and large network effects. This economic environment lends itself to a distortion of a
competitive market and in particular, is susceptible to abuse by dominant incumbents. In telecommunications sectors
around the world, anticompetitive behaviour such as refusals to deal, denial of access to essential facilities, bundling and
tying of products, exclusive dealing, price discrimination, and excessive pricing is common. In South Africa, the need for
competition regulation over and above sector-specific regulation is well-illustrated by lack of growth in access to
2
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and punish anticompetitive conduct in this sector of the economy are vital. Regulations which
govern licensing and access to new technologies, networks, infrastructure, and facilities are
required to facilitate market entry. In particular, regulations regarding interconnection and facility
leasing regulations are necessary to allow new entrants access to incumbents’ telecommunications
facilities in order to compete. Even rules about the assignment of frequency spectrum and
numbers, as well as universal service obligations and consumer protection, may affect the
competitive landscape. This regulation may either operate ‘ex ante’ – as a precondition for entering
the market – or be enforced ‘ex post’ – which involves detecting, investigating and prosecuting
offenders.
Legislators thus have to decide how – and by whom – these two different forms of regulation are
best enforced:

The first question involves a decision on whether to impose sector specific legislation only,
or whether to also impose rules intended to foster and enforce competition in the sector. If
both forms of regulation are enacted, this decision also involves deciding whether the
competition regulation ‘trumps’ the sector specific rules.

The second question requires the legislature to decide which regulator (the sector regulator
or the competition authority) is responsible for enforcing competition law in the electronic
communications sector.
In a study on the manner in which various countries choose to regulate electronic communications
during and after a transition from government ownership or heavy regulation to much greater
reliance on market forces, the OECD identified the following types of regulation, and asked
member countries to indicate the manner in which these tasks were divided between regulators:

competition protection includes adopting, interpreting and enforcing framework rules designed
to ensure that markets are and remain as effectively self-regulating as possible. In particular
this involves preventing firms making anti-competitive agreements, abusing dominant positions
and carrying out anti-competitive mergers;

economic and access regulation includes ensuring non-discriminatory access to necessary
inputs, especially network infrastructures and adopting cost based measures to control
monopoly pricing, as well as potentially directly controlling or specifying: production
technologies (other than those linked with setting, and technical product standards); eligible
providers (granting and policing licences); and terms of sale (i.e. output prices in terms of
access); and

technical regulation includes setting and monitoring standards so as to ensure compatibility
and to address privacy, safety and environmental protection concerns as well as allocating
publicly owned resources such as spectrum.
While technical regulation will almost always be conferred on a sector-specific regulator, there are
many variations around the world in respect of which body is tasked with the economic and
competition roles. If competition protection is separated from access and economic regulation, cooperation and co-ordination are vital to avoid inconsistent, investment-discouraging application of
telecommunications subsequent to the liberalization of Telkom. At this time, Telkom was granted a protected monopoly
by the regulator, SATRA, in exchange for Telkom’s commitment to extend access nationally. It is widely acknowledged
that Telkom abused this opportunity, took full advantage of its monopoly, and failed to improve or extend access. R
Horowitz & W Currie ‘Another instance where privatization trumped liberalization: The politics of telecommunications
reform in South Africa, a ten-year perspective’ (2007) 31 Telecommunications Policy 445-462
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the two sets of policies. Different countries tend to co-operate in different ways, depending on
questions of comparative advantage as well as the general legal framework and regulatory history.
Hence the optimal solution varies from country to country.3 In a comparative study, the Canadian
Bureau identified a number of possible models in respect of the allocation of competition and
economic regulation in use worldwide:4
3

Grant exclusive jurisdiction over competition issues to the competition authority - In
Australia, the government undertook an extensive restructuring of its competition and
telecommunications legislation in 1997. Economic regulatory functions which were
previously exercised by the industry specific regulator were redistributed to the
competition authority. However, the competition legislation has been supplemented
with telecommunications-specific laws. The industry specific regulator maintains
regulation over technical matters. There are still some areas of overlap between the
regulators and so there are some mandatory consultation procedures, overlapping
commissioners and provisions for sharing information.5 The decision to allocate
greater authority to the competition regulator in this sector was motivated by the
extent to which the sector specific regulator had been successful in fostering
competition in the market. In Australia, the government wanted to inject more
competition into the domestic market but there was a fear of ‘regulatory capture’ of
the telecommunications regulator. Therefore jurisdiction over all competitive issues
was removed from the telecommunications regulator and conferred on the
competition law authority.6

Allow the competition authority to regulate competition in the sector, unless specific
regulation is justified - This is the model adopted in the European Union, where sector
regulators are permitted to enforce specific regulation where competition law alone
will not adequately address market failure (i.e where there are players with significant
market power). The EU has identified a number of wholesale and retail product
markets it considers to be susceptible to specific regulation.7 New Zealand attempted
to adopt this approach after the liberalisation of its telecommunications sector in
1987. At that time, general competition regulation was favoured over sector specific
regulation and the Commerce Commission was responsible for the regulation of the
telecommunications sector. However, more than ten years after the liberalisation of
the sector, competition had still not developed at the expected rate and it was
concluded that sector specific regulation was essential in the telecommunications
context. However, the sector regulator operates under the auspices of the
competition authority - the office of the Telecommunications Commissioner is located
within the Commerce Commission.8

Confer concurrent powers on competition and telecommunications regulators to
regulate competition in the sector - This the approach adopted in the United Kingdom,
where the sector regulator has the power to enforce competition legislation in relation
to agreements and “activities connected with communication matters”. However, the
competition regulator may exercise jurisdiction even if the complaint concerns a
telecommunications matter, depending on a range of factors.”9 As the Canada
OECD Page 8 OECD: Policy Round Tables: Relationship between Regulators and Competition Authorities, 1998
available at http://www.oecd.org/dataoecd/35/37/1920556.pdf
4 Comparative Study on Interaction between Competition Law Authorities and Telecommunications Regulators in
Australia, The United Kingdom Germany and the United States of America (August 12, 2005), available at:
http://www.telecomreview.ca/eic/site/tprp-gecrt.nsf/vwapj/Competition_Bureau__Appendix_A_(Comparative_Study).pdf/$FILE/Competition_Bureau_-_Appendix_A_(Comparative_Study).pdf
5 Op cit note 4 at 7-8.
6 Op cit note 4 at 46
7 Op cit note 4 at 15
8 L Mokgosi, The Telecommunications Regulator, Thornton et al, Telecommunications Law in South Africa (2006) 100.
9 As s 2.2 of the OFT Concurrency Guidelines note:
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Bureau paper notes, this approach requires regulation to ensure that only one
authority investigates each particular complaint, depending on factors like which is
better placed to do so and whether the case affects more than one regulated sector.10
Since only one of the regulators actually exercises jurisdiction over a particular
matter, there is extensive consultation prior to the exercise of jurisdiction by one or
the other regulator, but very little interaction once the jurisdictional issue has been
resolved. In the US, there is also a measure of concurrency over competition
matters, particularly over merger reviews, where the sector specific regulator is given
authority to evaluate mergers in the communications sector. This overlap has led to
criticism that it results in inefficient expenditure on regulatory resources. The
competition authorities do also have the right to file comments in any FCC proceeding
and there is an obligation on the telecommunications regulator to accord “substantial
weight” to the submissions of the competition authority.11
Regulation in South Africa to date
Before the liberalization of the electronic communications industry in South Africa, Telkom SA Ltd
was state-owned, granted full exclusivity and also acted itself as a regulator in that it issued
licences for value-added service providers (“VANS”). Liberalization of the industry followed the
global privatization wave of the 1980s and began in 1996 with the partial privatization.
The Telecommunications Act of 1996 (“the Telecommunications Act”) set up a telecommunications
regulator, the South African Telecommunications Regulatory Authority (“SATRA”). The
Telecommunications Act was amended in 2001, and with the promulgation of the ICASA Act,
SATRA was replaced by ICASA. This legislation established ICASA and gave it wide powers to
regulate broadcasting and telecommunications in the public interest and in pursuance of the
objects set out in the Telecommunications Act, the Independent Broadcasting Authority Act12 and
the Broadcasting Act.13
Our legislators thus chose to regulate the electronic communication sector in terms of detailed
sector-specific legislation. At this point, both technical and economic regulatory tasks (such as
licensing) were allocated to the sector regulator. In particular, Section 100 of the
Telecommunications Act granted ICASA the power to investigate and adjudicate upon
contraventions by a licensee of its licence obligations. The legislation also conferred certain
powers on ICASA in relation to competition in the sector.14
“factors which may point towards Ofcom undertaking an investigation include: the desirability to ensure
consistency of regulation within the ambit of Ofcom’s regulatory responsibilities; the fact that Ofcom may in some
circumstances be in a better position to appreciate the relationship between CA98 cases and regulation within its
sector; and the specialist experience, and knowledge, of Ofcom staff of the communications sector. Factors
indicating that the OFT may be better placed to undertake an investigation may include whether the conduct
involves potentially criminal, covert, hard core cartel activity or has effects on competition beyond the sectors
covered by Ofcom.”
10 Op cit note 4 at 21-23
11 Op cit note 4 at 14
12 Act 4 of 1999.
13 Act 103 of 1996.
14 Section 36(1)(d) of the Telecommunications Act provided:
“Where it appears to the Authority that Telkom, in the provision of its telecommunications services, is taking or
proposing to take any step which confers or may confer on it an undue advantage over any person who may in
the future be granted a licence in competition with Telkom, the Authority may direct Telkom to cease or refrain
from taking such step, as the case may be.”
Section 53(1) provided:
“If it appears to the Authority that the holder of a telecommunications licence is taking or intends taking any action
which has or is likely to have the effect of giving an undue preference to or causing undue discrimination against
any person or category of persons, the Authority may, after giving the licensee concerned an opportunity to be
heard, direct the licensee by written notice to cease or refrain from taking such action, as the case may be.”
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The Competition Act came into effect in November 1998. It established the competition authorities
and charged them with enforcing competition throughout the economy. However, section 3(1) of
the Competition Act provided that:
“This Act applies to all economic activity within, or having an effect within,
the Republic, except…
(d) acts subject to or authorised by public regulation”
This section was the subject of the Nedcor/ Stanbic case,15 in which the Supreme Court of Appeal
held that a proper (literal) reading of this section excluded acts (conduct) performed under s 37 of
the Banks Act (i.e. bank mergers) from scrutiny by the competition authorities in terms of the
Competition Act. Schutz AJ noted:
“In the case before us there is no doubt that the proposed bank merger is an ‘economic
activity.’ The question is whether it will be an “act” (Afrikaans “handeling”) “subject to or
authorised by public regulation.” Read in the context of the Act the “acts” envisaged form part
of a confined class. That is so because the subject matter of the Act is what may broadly be
described as actually or potentially monopolistic or anti-competitive agreements, practices or
acts, which are grouped under the headings restrictive horizontal practices, restrictive vertical
practices, abuse of dominant position and mergers. Entering into an agreement or abusing
dominance may in themselves be “acts” or “handelinge.” Because of the frequency with
which I will have to refer to the confined construction that I have placed on the word “act”,
and its importance, I shall refer to the word so construed as a “monopolistic act.”
The application of this precedent in the electronic communications sector would clearly have meant
that the telecommunications legislation would exclude the application of the Competition Act in the
sector, and as a result, ICASA would enjoy exclusive jurisdiction to regulate competition matters in
the sector.16
The Nedcor/Stanbic case prompted Parliament to amend section 3 of the Act to make it clear that
the Competition Act was intended to apply to sectors of the economy regulated by other legislation
- save for mergers in terms of the Banks Act, which were specifically carved out by provisions
which allowed the Minister of Finance to remove bank mergers from scrutiny by the competition
authorities).17 The Second Amendment Act, 2000 deleted paragraph (d) and inserted a new
section 3(1A) into the current Act:
“(a) In so far as this Act applies to an industry, or sector of an industry, that is subject to
the jurisdiction of another regulatory authority, which authority has jurisdiction in
15
Standard Bank Investment Corporation and The Competition Commission 2000 2 SA 797 (SCA).
Willington Ngwepe ‘Serving two masters: concurrent jurisdiction between the Competition Commission and the
Independent Communications Authority of South Africa’ (2003) 120 SALJ 243.
17 Section 18(2) and (3) provide that:
“(2)
Despite anything to the contrary in this Act, the Competition Commission may not make a decision in terms of
section 13(5)(b) or 14(1)(b), and the Competition Tribunal may not make an order in terms of section 16(2), if the (a) merger constitutes—
(i) an acquisition of shares for which permission is required in terms of section 37 of the Banks Act, 1990
(Act No. 94 of 1990); or
(ii) a transaction for which consent is required in terms of section 54 of the Banks Act, 1990 (Act No. 94 of
1990); and
(b) the Minister of Finance has, in the prescribed manner, issued a notice to the Commissioner specifying the
names of the parties to the merger and certifying that—
(i) the merger is a merger contemplated in paragraph (a)(i) or (ii); and
(ii) it is in the public interest that the merger is subject to the jurisdiction of the Banks Act, 1990 (Act No. 94
of 1990) only.
(3)
Sections 13(6) and 14(2) do not apply to a merger in respect of which the Minister of Finance has issued a
certificate contemplated in subsection (2).”
16
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respect of conduct regulated in terms of Chapter 2 or 3 of this Act, this Act must be
construed as establishing concurrent jurisdiction in respect of that conduct.
(b)The manner in which the concurrent jurisdiction is exercised in terms of this Act and
any other public regulation, must be managed, to the extent possible, in accordance
with any applicable agreement concluded in terms of section 21(1)(h) and 82(1) and
(2).”
In addition, section 21(1)(h) of the amended Act provided that “The Competition Commission is
responsible to:
“… negotiate agreements with any regulatory authority to co-ordinate and harmonise the
exercise of jurisdiction over competition matters within the relevant industry or sector, and to
ensure the consistent application of the principles of this Act;”
whilst section 82(3) provided that:
“In addition to the matters contemplated in section 21(1)(h), an agreement in terms of
subsection (1) must –
(a)
(b)
(c)
(d)
identify and establish procedures for the management of areas of concurrent
jurisdiction;
promote co-operation between the regulatory authority and the Competition
Commission;
provide for the exchange of information and the protection of confidential
information; and
be published in the Gazette.”
The Competition Commission entered into a number of agreements with regulatory authorities,
including a Memorandum of Agreement with ICASA18 pursuant to section 82 of the Act, which
came into effect from 16 September 2002 (“the MOA”). The MOA provided for co-operation
between the Competition Commission and ICASA in relation to both merger reviews and complaint
investigations and dealt with aspects such as the exchange of confidential information, the sharing
of resources, the establishment of a joint working committees, the manner of consultation, as well
as the participation by one regulator in the proceedings of another.19
The Telkom Case
The nature and scope of section 3(1A), its relationship to the Telecommunications Act and the
application of the MOA was considered – though unfortunately, not decided – in a recent case
before the High Court (“the Telkom case”).20
In May 2002, the South African VANS Association (“SAVA”), the Internet Service Providers
Association (“ISPA”) and 18 VANS providers lodged a complaint in terms of the Act in relation to
18
GG 23857; GN 1747 of 2002. memorandum of agreement entered into between the Competition Commission and
ICASA, available at www.icasa.org.za or www.compcom.co.za
19 In respect of mergers, the MOA provides that where a transaction requires the approval of both regulators, the public
shall submit separate and concurrent applications to the Commission and to ICASA for respective consideration. Both
regulators shall make independent determinations but may, in arriving at those decisions consult with each other
(clauses 1.2, 2.1 and 2.2). In the case of mergers the MOA provides that where the two regulators arrive at different
determinations they may discuss the matter between themselves in order to identify the reasons for the difference. If the
difference cannot be resolved, each shall make its own decision and if either of the regulators does not approve the
transaction, the transaction shall not be approved.
20 Telkom SA Limited v The Competition Commission of South Africa and The Competition Tribunal of South Africa
(case:11239/04).
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alleged anticompetitive conduct by Telkom. In August that year, Omnilink and Internet Solutions
lodged a further complaint, which the Commission consolidated into a single investigation with the
SAVA complaint.21 In February 2004, the Commission referred various aspects of these complaints
to the Tribunal for adjudication. In summary, the Commission’s referral alleged that Telkom’s
refusal to provide telecommunications facilities to VANS, to ‘peer’ with VANS and/or to lease
access facilities directly to VANS, constituted an exclusionary act in terms of section 8(c) of the
Act, and/or a refusal to provide access to an essential facility in terms of section 8(b) of the Act,
and/ or price discrimination in terms of section 9 of the Act.
Telkom applied to review and set aside the Commission’s decision to refer these complaints and
the referral itself Telkom also sought an order declaring that the Commission did not have the
power to refer the matters forming the subject matter of the referral to the Tribunal for adjudication,
and that the Tribunal similarly lacked any power in law to adjudicate on this conduct. This, Telkom
argued, was because the conduct which formed the subject of the complaint fell within the
exclusive jurisdiction of ICASA and outside of the jurisdiction of the competition authorities,
because it was either authorised22 in terms of the Telecommunications Act,23 and/or by the sectoral
regulator in terms of Telkom’s licences; or related to the scope of Telkom’s licences and Telkom’s
powers and obligations to VANs providers in terms of the Telecommunications Act. Since these
matters were by their nature disputes between different kinds of licensees, they fell within the
exclusive purview of ICASA, the sectoral regulator entrusted with the task of determining such
dispute and interpreting the Telecommunications Act. The legislature had clearly created a
regulatory regime to deal with the dispute which was the subject of the complaint referral, and had
appointed ICASA as the regulatory body to resolve this dispute.24 Since the conduct complained of
is contemplated by the relevant telecommunications legislation and/or the licences, the legislature
could never have contemplated that the competition authorities would have the authority to
condemn this conduct as anticompetitive. Accordingly, Telkom argued, the Competition Act did not
apply to this conduct at all. Section 3(1A) only established concurrent jurisdiction “in so far as” the
Competition Act applies – if it does not apply, then section 3(1A) finds no purchase, and no
concurrent jurisdiction is established. Whether the Competition Act applies is a question of law,
which has to be answered independently of section 3(1A).25
Telkom also argued that the referral was invalid on a number of other grounds, including that the
Commission’s reliance on a report supplied by an external service provider had created a
reasonable apprehension of bias, and that even if concurrent jurisdiction did exist, the Commission
had failed to adhere to peremptory provisions prescribed by the MOA between it and ICASA.
The Commission opposed this review application on the basis that the alleged contraventions of
the Competition Act by Telkom were not authorised by the Telecommunications Act, ICASA or
Telkom’s PSTS or VANS licence. However, the Commission raised two points in limine, which it
claimed disposed of the application: firstly, it argued that the Commission’s discharge of its
investigative functions, culminating in a referral, did not constitute an administrative action which is
reviewable under the wide grounds of review in the Promotion of Administrative Justice Act.
Secondly, since the Tribunal and the Commission are specialist bodies, and these complaints
raised complex issues, the High Court should not deprive the Tribunal of the authority to determine
whether these complaints involved possible contraventions of Chapter 2 of the Competition Act.
The Commission also denied that it was required to follow the procedures set out in the MOA,
21
In terms of Rule 17(2) of the Rules
The distinction between conduct which is a party is ‘obliged’ to perform and that which is ‘authorised’ by other
legislation, is raised by the Commission in its Heads of Argument filed in the Supreme Court of Appeal – it acknowledges
that the competition authorities have no competence to condemn conduct which a party is obliged to perform or refrain
from performing (and that an attempt by the competition authorities to exercise such jurisdictional competence would be
unlawful and reviewable), but denies that the conduct which forms the subject of the complaint falls within this class.
23 Act 103 of 1996
24 Telkom noted that the issues raised in the complaint referral had been referred to ICASA on a number of occasions.
25 This is in line with the interpretation of the repealed section 3(1)(d) in the Standard Bank case, in which Schutz AJ
noted that concurrency only arises where another statute regulated what he termed “monopolistic acts”.
22
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noting that section 3(1A)(b) of the Competition Act required the exercise of concurrent jurisdiction
to be managed “to the extent possible” in terms of an agreement concluded in terms of section
21(1)(h) and 82(1) and (2) of the Competition Act and that it was therefore not completely
mandatory.
The High Court handed down its decision on 18 June 2008. Claasen J ruled that the discharge of
the Commission’s investigative functions did not constitute an administrative action which is
reviewable under PAJA, because the Commission’s decision to refer the complaint did not affect
any of Telkom’s rights, but simply gave Telkom an opportunity to defend its rights in a hearing
before the Tribunal.26 However, he held that the High Court does have jurisdiction to determine
whether a complaint referral is invalid on other grounds, including whether there was a reasonable
perception of bias on the part of the Commission. He decided that the referral was invalid on this
basis, as well as because the referral had been brought outside of the one year time period
specified in the Competition Act without the consent of all of the respondents. In addition, the High
Court held that the Commission had failed to comply with the MOU, which required that the
Commission hold consultations with ICASA (although the High Court did not decide whether the
proper procedure would not rather have been to compel ICASA to set those proceedings in
motion.) The High Court accordingly set the Commission’s decision to refer the matter aside and
ordered the Commission to pay Telkom’s costs.
As a result, the High Court did not decide on the whether the conduct forming the subject of these
complaints fell within the exclusive jurisdiction of ICASA and outside of the jurisdiction of the
competition authorities.
Both parties applied for and were granted leave to appeal the decision. The Commission appealed
on the basis that the High Court had erred in granting the review relief, whilst Telkom crossappealed on the basis that the High Court ought to have granted not only the review relief, but
should have declared that the competition authorities had no power to investigate (in the case of
the Commission) and adjudicate (in the case of the Tribunal) on the conduct forming the subject
matter of the complaint. Rather intriguingly, this raises the possibility that the Supreme Court of
Appeal will consider and decide on whether the Tribunal has the power to hear and adjudicate on a
complaint of this nature in terms of the current legislation – namely, the ECA – since it is this
legislation which now determines the limits of the application of the Competition Act, and hence,
the scope of the powers of the Tribunal. These appeals are expected to be heard later this year.
The ECA
In the meanwhile, however, Parliament began drafting legislation to replace the
Telecommunications Act (and to some extent, also the Broadcasting Act), mainly to cater for
technological convergence and trigger the managed liberalisation of the sector.
However, the Convergence Bill (the Bill that preceded the ECA) also proposed to expand the
powers of ICASA in relation to competition matters in the electronic communications sector. In
particular, the Bill proposed that ICASA would be empowered to direct a licensee to refrain from
engaging in acts likely to substantially prevent or lessen competition, and to prescribe regulations
defining relevant markets and market segments, so that pro-competitive conditions could be
imposed upon licensees having “significant market power”.
In their submissions on the Bill, the Tribunal and the Commission argued that the jurisdiction over
competition matters granted to ICASA in terms of these provisions in the Convergence Bill should
be removed. They argued that the exercise of concurrent jurisdiction over competition by the
26
The Competition Commission and Telkom SA Limited 11/CR/Feb04, paragraph 12.
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Commission and the regulator “was meant as a temporary measure and [was] not ideal”.27 They
pointed out when the Telecommunications Act was enacted, it was only necessary for the regulator
to have the power to tackle anticompetitive behaviour because the Competition Act had not yet
been enacted. Given that the Competition Act had now come into force, they argued, there was no
longer a need for ICASA to regulate competition at all. Therefore they submitted that while the
Commission and sector regulators should evaluate prohibited practices issues together, the final
decision should be made by the Commission. 28 They therefore suggested that the words “Subject
to the provisions of this Act” in section 74(a) of the Convergence Bill be substituted with the words
“Notwithstanding the provisions of this Act”.
Unfortunately, the approach advocated by the competition authorities did not prevail. When it came
into effect in July 200, the ECA substantially expanded the powers of ICASA in relation to
competition matters in the electronic communications sector. In particular, section 67(1) and (2)
allow ICASA to direct a licensee to cease or refrain from engaging in an act that is likely to
substantially prevent or lessen competition by giving undue preference to or causing undue
discrimination against any other licensee or a person providing a service pursuant to a licence
exemption. ICASA is required to prescribe regulations to describe what would be considered as
giving undue preference or causing undue discrimination in this case. Regulations detailing
procedures for complaints and the monitoring and investigation of such complaints, as well as
prescribing penalties for failure to comply with written notice are also to be promulgated by ICASA.
These provisions were retained despite the competition authorities’ submission that these are
issues over which the competition authorities should have exclusive authority.29
Section 67 also requires ICASA to prescribe regulations defining relevant markets and market
segments, so that pro-competitive conditions may be imposed upon licensees having “significant
market power”, in circumstances where ICASA determines such markets or market segments have
ineffective competition.30 Subsection 7 sets out examples of such pro-competitive terms and
conditions.
Section 67(10) recognises that “the authority is, for the purposes of the Competition Act, a
regulatory authority defined in section 1 of that Act”, and subsections 10 and 11 provided that
ICASA and the Commission could ask for and receive assistance or advice from each other in
relation to their proceedings.
However, section 67(9) went a step further than simply endowing ICASA with concurrent
jurisdiction in relation to competition in the sector. It provided that:
“subject to the provisions of this Act, the Competition Act applies to competition matters
in the electronic communications industry.”
In effect, this provision excludes the application of the Competition Act where conduct is
specifically authorised or addressed by the ECA.31
Competition Commission and Competition Tribunal ‘Submission of the Competition Commission and the Competition
Tribunal on the Convergence Bill (B9-2005) for consideration by the Portfolio Commission on Communications’ available
at http://www.compcom.co.za/policyresearch/Comments%20on%20the%20Convergence%20Bill%20April%202005.doc
28 Op cit note 27 at paragraph 3.1.1.
29 Op cit note 27 at paragraph 32.
30 It defines what “significant market power” is, and subsection 6 provides the methodology for determining the
effectiveness of competition in market segments.
31 Sibanda asserts that the ECA is intended to grant ICASA the power to regulate the electronic communications
industry ex ante (i.e. – to adopt ‘before the fact’ rules and regulation which are aimed at creating conditions in the sector
that enable it to facilitate competitive outcomes) and to grant the competition authorities the power to regulate the sector
ex post (to evaluate (allegedly anticompetitive) conduct ‘after the fact’), except in so far as competition authorities
maintain ex ante regulation in respect of merger evaluation. He argues that nothing prevents the competition authorities
from regulating anti-competitive behaviour in the industry, and it is only “perhaps the fear of legal challenge that may
keep the competition authorities from fully getting their teeth into the sector, more than anything else” Fungai Sibanda ‘Of
27
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The Competition Amendment Act
In February 2008, the Minister of Trade and Industry indicated that it he intended to implement
changes to the competition law during the course of the year “to enable the State to proactively
address anti-competitive outcomes.”32
In May 2008, the DTI made presentations to the Portfolio Committee on Trade and Industry33 and
NEDLAC34, in which it noted that:
“there exist inconsistencies in the Electronic Communications Act (EC Act) and the
Competition Act in the exercise of authority on competition matters in the
telecommunications sector”
because
“section 67(9) of the EC Act removes concurrency by stating that the Act is subject to EC
Act; this raises legal uncertainty on the jurisdiction of the Competition Authorities in dealing
with anti-competitive behaviour in the telecoms sector; this effectively changed the general
policy stance on concurrent exercise of authority over competition matters in regulated
industries; in addition the Act is silent as to which legislation should prevail in instances of
conflict or inconsistencies.”
It thus recommended that the Competition Act should be amended. The proposed amendment
Bill35 was published in May 2008, together with an explanatory summary.36 The summary dealt
with the issue of concurrent jurisdiction over competition matters, noting that:
“Although the scheme established by section 3 has generally worked well, uncertainty
continues to exist in some cases, most notably following the enactment of the Electronic
Communications Act, (Act 36 of 2005) (“EC Act”), section 67(9) of which states that the
Competition Act is subject to the EC Act. With the enactment of that section, there are now
two inconsistent provisions touching on the question of over-lapping regulatory authority. In
order to remove any uncertainty, it is desirable to propose amendments that will rationalise
the provisions, clarify the general competition policy and more clearly delineate the authority
of the relevant regulators.”
Accordingly, the Bill proposed that:
“(a)
the Competition Act should be the central governing statement of competition policy in
the Republic, with recognition that other, industry-specific legislation will often play an
important role in fine-tuning the general policy for specific application to particular
industries; and
(b)
the Competition Act should continue to provide for a flexible mechanism for
establishing the details by which over-lapping jurisdiction on competition matters is to
be managed.”
concurrent and exclusive jurisdiction in the ICT sector’ Mail and Guardian 21 July 2009, available at:
http://www.mg.co.za/article/2009-07-21-of-concurrent-and-exclusive-jurisdiction-in-the-ict-sector.
32 Interestingly, the Minister did not mention the telecommunications sector directly – the only comment in this regard
appeared earlier in the document, where he noted that “work will be undertaken to benchmark telecommunication costs
with comparator countries to enable us to evaluate the impact of our efforts to bring down costs” Presentation to
Portfolio Committee on Trade & Industry, 10 June 2008. available at www.thedti.gov.za/parlimentary/compaBill.pdf.
33 Op cit note 32.
34 Dated 8 May 2008.
35 B31-2008
36 GG 31101 of 29 May 2008
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FOR DISCUSSION PURPOSES ONLY
To give effect to this aim, the Bill proposed to substitute the following for section 3 of the Act:
“(a)
jurisdiction is concurrent in any case in which legislation assigns responsibility for
competition matters within an industry to a sector regulator;
(b)
the concurrent jurisdiction is to be managed in terms of a Memorandum of Agreement
between the Competition Commission and the relevant sector regulator;
(c)
if there are any conflicts between the sector specific legislation and the Competition Act
which a Memorandum of Agreement does not resolve, the Competition Act will prevail,
but only to the extent of the unresolved conflict.”
The Bill also effected a consequent amendment to section 67(9) of the EC Act, amending it to
read:
“Despite the provisions of this Act, the Competition Act applies to competition matters in the
electronic communications industry”.37
Although less prominent than the other proposed amendments relating to criminal liability and
complex monopolies, the amendment to section 3 attracted widespread criticism from the
profession.38 In its submissions on the Bill, for example, the Law Society of South Africa39 indicated
that whilst it agreed in principle that concurrent jurisdiction over competition was appropriate
(particularly in the electronic communications sector) the drafting of the Bill gave rise to unintended
consequences because the words “despite anything to the contrary in any other legislation” and
“this Act prevails” suggested that the Competition legislation would prevail over other legislation
(not simply that the competition authorities would have the last word on competition matters even if
sector specific regulation bestowed jurisdiction over competition matters on another regulator).
Section 3(a) of the Bill provided that in so far as the Competition Act and another statute both
regulated particular “conduct”, it established concurrent jurisdiction in respect of that conduct.
Subsection (b) then sought to provide a mechanism for the exercise of that concurrent jurisdiction
– an agreement between the Commission and the other authority – and subsection (c) stated that
only if the conflict were not resulted would the Competition Act prevail. This, the Law Society
argued, would result in firms subject to sector specific legislation being placed in a position where
they were faced with conflicting obligations.40
The Law Society accordingly proposed that the Bill should only deal with jurisdictional conflicts –
that is, the situation where both the competition authorities and another regulator both have the
jurisdiction to determine competition issues, or to promote competition. This would leave the way
open for sector specific legislation to completely exclude the operation of the Competition Act. In
addition, the Law Society pointed out that where another regulator enjoys jurisdiction over
competition in a particular sector, the “mechanism for the harmonization of the concurrent
jurisdiction needs to be transparent” and in particular, that it should be open to public comment.
Very limited consultations were conducted prior to ICASA and the Commission signing the current
MOA.
The word “despite” replaced the words “subject to”.
Interestingly, the submission prepared by the competition authorities did not deal with the amendment to section 3 at
al, but rather focused on the criminal, market inquiry and complex monopoly provisions and some technical
amendments.
39 Submissions by the Law Society of South Africa on the Competition Amendment Bill [B31 – 2008] (“the Bill”) Proposing
Changes to the Competition Act, No 89 of 1998 (28 June 2008).
37
38
This is not a problem which only arises in the electronic communications sector, of course – there are a
range of other sectors subject to regulation by other regulators which were potentially affected. This is
beyond the scope of this paper.
40
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FOR DISCUSSION PURPOSES ONLY
These concerns appear to have formed the basis for the amendments proposed to section 3 in
B31B-2008,41 in which the proposed amendment was changed to read:
“In so far as this Act applies to any conduct arising within an industry or a sector of an industry
which is subject to the jurisdiction of another regulatory authority in terms of any other
legislation:
(a) this Act, and that other legislation, must be construed as establishing concurrent
jurisdiction in respect of any conduct that is regulated in terms of both of these Acts,
subject to paragraph (b) such that:
(i) any other regulatory authority contemplated in this subsection will exercise primary
authority to establish conditions within the industry that it regulates as required to give
effect to the relevant legislation in terms of which that regulatory authority functions,
and this Act;
(ii) the Competition Commission will exercise primary authority to detect and
investigate alleged prohibited practices within any industry of sector, and to review
mergers within any industry or sector, in terms of this Act; and
(b) details of the administrative manner in which any concurrent jurisdiction contemplated in
paragraph (a) is to be exercised, must be determined by an agreement between the
Competition Commission and that other regulatory authority, as provided for in sections
21(1)(h) and 82(1)”
In its presentation to the Select Committee on Foreign and Economic Affairs in August 2008, the
DTI explained that this amendment to the wording of the section had been necessitated by the fact
that “the Act is silent as to which institution has final authority on competition considerations” and
explained that the revised version of the amendment was intended to make it clear that sector
regulatory authorities should “exercise primary authority necessary to establish conditions within an
industry (ex ante regulation)” whilst the Commission should have “authority to detect and
investigate prohibited practices within any sector and the power to review mergers (ex post
regulation)”.
A further minor amendment to section 3 was agreed by the Portfolio Committee,42 which resulted
and amendment of section 3(a), so that it read:
“In so far as this Act applies to any conduct arising within an industry or a sector of an industry
which is subject to the jurisdiction of another regulatory authority in terms of any other
legislation:
(a) this Act, and that other legislation, must be construed as establishing concurrent jurisdiction
in respect of any conduct that is regulated in terms of both this Act, and that other national
legislation…”
(where previously, the underlined portion had read “both of these Acts”).
Unfortunately, stakeholders had no further opportunity to comment on the second revised bill and it
was passed by the NCOP in September 2008 and the National Assembly on 21 October 2008.43
At the time this paper was published, it had not yet been signed into law by the President.44
41
Which incorporated the amendments agreed by the Portfolio Committee on Trade and Industry and set out in B31A2008.
42 B31C-2008.
43 Indeed, as a submission by one senior counsel noted, the lack of real public participation in the process of enactment
might in itself constitute a ground for constitutional invalidity.
WORKING DRAFT
FOR DISCUSSION PURPOSES ONLY
Section 3 of the Amendment Bill45 accordingly reads:
3.
(1) Despite anything to the contrary in any other legislation, public regulation or
agreement, this Act applies to all economic activity within, or having an effect within,
the Republic, subject to subsections (2) and (3).
(2)
This Act does not apply to –
(a) collective bargaining within the meaning of section 23 of the Constitution
and the Labour Relations Act 1995 (Act No. 66 of 1995);
(b) a collective agreement as defined in section 213 of the Labour Relations
Act, 1995; or
(c) concerted conduct designed to achieve a non-commercial socio-economic
objective or similar purpose.
(3)
In so far as this Act applies to any conduct arising within an industry or sector of
an industry that is subject to the jurisdiction of another regulatory authority in
terms of any other legislation –
(a)
this Act, and that other legislation, must be construed as establishing
concurrent jurisdiction in respect of any such conduct that is regulated in
terms of both this Act, and that other national legislation, subject to
paragraph (b), such that –
(i)
(ii)
(b)
any other regulatory authority contemplated in this subsection will
exercise primary authority to establish conditions within the industry
that it regulates as required to give effect to the relevant legislation in
terms of which that authority functions, and this Act; and
the Competition Commission will exercise primary authority to detect
and investigate alleged prohibited practices within any industry or
sector, and to review mergers within any industry or sector, in terms
of this Act; and
details of the administrative manner in which any concurrent jurisdiction
contemplated in paragraph (a) is to be exercised, must be determined by
an agreement between the Competition Commission and that other
regulatory authority, as provided for in sections 21(1)(h) and 82(1).”
This amendment clearly constitutes a radical shift away from endowing ICASA with the final word
in relation to conduct in the electronic communications sector. By replacing the words ‘subject to’ in
section 67(9) of the ECA with the word ‘despite’ the amendment attempts to make it clear that the
provisions of other legislation (such as the ECA) do not exclude the application of the Act. Section
3(3) similarly provides that the Competition Act – and the other legislation - “must be construed as
establishing concurrent jurisdiction in respect of any such conduct that is regulated in terms of both
this Act, and that other national legislation”.
These provisions make it significantly harder to argue that the fact that a licensee is required - or
even permitted - to do something in terms of the ECA or other sector specific regulation excludes
the application of the Act entirely. There is, of course, still some uncertainty because of section
3(3), which uses the phrase “in so far as this Act applies” (despite the fact that presumably, section
3(1) is meant to make it clear that it always does). It may therefore be arguable, for example, that if
44
Apparently because of concerns about the constitutionality of the criminal provisions, and potentially also the complex
monopoly provisions.
45 B31D-2008
WORKING DRAFT
FOR DISCUSSION PURPOSES ONLY
the ECA grants the sector regulator ex ante jurisdiction over, for instance, determining terms of
access, or approving interconnection rates, then the Competition Act is excluded from regulating
such conduct ex post. Therefore, if a complaint asserts that a firm is abusing its dominance by
charging excessive termination rates, or not adhering to terms of access, then the Competition Act
has no application in the first instance. 46
Unfortunately, the amendment does not clearly demarcate the roles of the competition authorities
and another regulator in situations when both are required to regulate competition (either in terms
of the Competition Act, or indeed in terms of other legislation). Section 3(3) attempts to clarify
these roles by distinguishing between ‘ex ante’ and ‘ex post’ regulation – whilst the other regulatory
authority “will exercise primary authority to establish conditions within the industry that it regulates
as required to give effect to the relevant legislation in terms of which that authority functions, and
this Act”, the Commission will “exercise primary authority to detect and investigate alleged
prohibited practices within any industry or sector, and to review mergers within any industry or
sector, in terms of this Act”. It is, however, not clear what “primary authority” means.
The problem, of course, is that the ECA currently vests ICASA with some capacity to regulate ‘ex
post’ (section 67(1), (2) and (3) of the ECA), in addition to its powers to regulate ‘ex ante’ in
Chapter 10. As ICASA noted in its submissions on the Bill, this ex ante regulatory competence
granted to ICASA is consistent with the achievement of policy goals such as managed
liberalisation and the introduction of new and innovative services. However, its ex post regulatory
competence concerns itself with the extent to which particular market conduct serves to subvert
the promotion of effective competition, but in markets which are characterised by durable market
failure, the structural disposition of such markets is usually the source of the market failure. As a
result, ICASA was of the view that whist exclusive ex ante regulatory jurisdiction ought to vest with
ICASA, it was unnecessary for it to have ex post jurisdictional competence. As a result, ICASA
proposed that sections 67(1), (2) and (3) of the ECA should be repealed. Unfortunately, the
amendment does not do this.
This difficulty may be compounded when the Amendment introduces the market inquiry and
complex monopoly provisions. The new market study powers will enable the Commission to study
the industry as a whole, and make recommendations to the Minister regarding legislative or
regulatory changes needed to bolster competition. The complex monopoly provisions enable the
Competition Commission, if it concludes that firms are engaged in complex monopoly conduct, to
apply to the Tribunal for an order “reasonably requiring, prohibiting or setting conditions upon any
particular conduct by the firm, to the extent justifiable to mitigate or ameliorate the effect of the
complex monopoly conduct on the market”. These new provisions involve the competition
authorities either setting conditions for proposed behaviour in a market, or making
recommendations on policy or legislation. These are ex ante roles which are currently assigned to
ICASA, and which the Competition Amendment Act proposes ICASA has primary authority over.
Conclusion
The amendments to the Competition Act over the last ten years are symptomatic of a political tug
of war over which form of regulation should govern the electronic communications sector, and
which regulator should be responsible for enforcing it.
Prior to amendment pursuant to the Nedcor/Stanbic case, it was clear that the Competition Act did
not apply at all to conduct regulated by other sector specific legislation. Section 3(1A) of the Act
introduced concurrent jurisdiction over competition matters, and the scope of this concurrency was
ICASA’s submissions on the Bill conceded that the transgression or failure to adhere to determinations prescribed by
ICASA within an ex ante regime may result in market conduct that is prohibited by the Competition Act. In these
circumstances, ICASA suggests that a principle of ‘administrative deference’ should be followed, and the authorities
should reach agreement on which institution is best placed to resolve the matter.
46
WORKING DRAFT
FOR DISCUSSION PURPOSES ONLY
considerably widened by the enactment of the ECA, which empowered ICASA not only to deal with
conduct by licensees which is likely to substantially prevent or lessen competition, but also to
engage in ex ante regulation designed to foster competition in the sector. However, as the Telkom
case demonstrates, it is by no means clear whether or not the sector specific regulation excludes
the operation of the Competition Act entirely. The Amendment Act attempts to make it clear that
the Competition Act applies to conduct in the electronic communications industry, and that the
competition authorities should play an active role in promoting and policing this sector.
The experience over the last 10 years suggests that this is undoubtedly the right choice. The
competition authorities have presided over a number of mergers in the sector and have
investigated a number of complaints about anticompetitive conduct.Despite uncertainty about their
jurisdiction in terms of the current legislation, particularly in the light of the Telkom case – and even
though the Tribunal has not yet decided any of these cases - there is no doubt that the threat of
enforcement action by the competition authorities has had a significant impact on the conduct of
players in the sector. Just the prospect of dawn raids and potential administrative penalties - not to
mention the legal and other associated costs and the negative publicity such proceedings
inevitably involve – may have deterred dominant firms from abusing their dominance where they
otherwise would have done so with impunity. The competitive landscape may have looked very
different indeed if only ICASA had been charged with fostering and enforcing competition in the
sector. ICASA has been largely ineffective so far in dealing with complaints by mobile and fixed
line operators and others like ISPs and VANS, while the recent Vodacom/ Vodaphone merger 47
caused some commentators to question ICASA’s independence48 and to note that ICASA does not
apply clear and rigorous regulatory procedures.49 ICASA has similarly been slow in finalising
regulations relating to its competition jurisdiction in terms of Chapter 10 of the ECA and its
economic regulatory roles in terms of Chapter 7 of the ECA. In the three years since the ECA
came into force, ICASA has not managed to finalise any regulations relating to interconnection,50
facilities leasing,51 carrier pre selection;52 or to prescribe a list of essential facilities.53 In particular,
there are only draft regulations defining relevant markets and market segments, which ICASA is
directed to do in terms of section 67(4) of the ECA so that pro-competitive measures may be
imposed upon licensees having significant market power where the Authority determines such
markets or market segments have ineffective competition,54 and there are no draft regulations
explaining the conceptual framework employed by the Authority to define the relevant markets or
market segments in the draft regulations. ICASA has apparently struggled to build capacity to deal
with these competition issues, possibly because it is faced with resource restraints, but also
because it has been consumed with the technical aspects of a highly complex conversion process.
47
In this transaction, the Tribunal unconditionally approved a merger between Vodacom and Vodafone, in terms of which
Vodafone acquired a further 15% of the issued share capital in Vodacom from Telkom, and Telkom unbundled its
remaining 35% shares in Vodacom to its own shareholders. ICASA initially decided that its approval of the merger was
not required, and in an attempt to halt the transaction, the Congress of South African Trade Unions (COSATU) filed an
application in the North Gauteng High Court, challenging this decision by ICASA. In a sudden turnaround, ICASA
subsequently flipped sides and joined COSATU’s bid as an applicant, arguing that the transaction should be stopped.
The application was dismissed, but ICASA’s indecision was heavily criticized as lacking independence and having the
potential to deter foreign investment in the future.
48 C Van Der Merwe, ‘ICASA wont oppose Vodacom ruling, independence questioned’ Engineering News, 18 May 2009,
available at : http://www.engineeringnews.co.za/article/icasa-wont-oppose-vodacom-ruling-independence-questioned2009-05-18
49 In a recent speech, the retired Competition Tribunal chairperson, David Lewis, noted that “there is much that needs to
be done to strengthen ICASA” and that:
“the Vodacom/Vodaphone fiasco… could simply not happen with [the competition authorities]… Our procedures
and practices for deciding a merger are clear, as are the procedures and practices for appealing our decisions.
No panel or member of the panel could have reopened the matter after it was decided or reversed the decision.”
50GG, Notice 941 of 2009, 10 July 2005, no 32370.
51 GG Notice 1794 of 2007, 24 December 2007 no. 30605: Electronic communications facilities leasing regulations
pursuant to chapter 8 of the ECA.
52 GG Notice 1581: Intention to make carrier pre-selection regulations and GG General notice: erratum: corrections and
additions to the draft carrier pre-selection regulations
53 GG Notice 1800 of 2007 ,24 December 2007 no. 30612: Regulations prescribing a list of essential facilities and
matters related thereto, pursuant to section 43(8) of the ECA.
54 GG Notice 1809 of 2007, 21 December 2007 no. 30622: Regulations pursuant to section 67(4) of the ECA.
WORKING DRAFT
FOR DISCUSSION PURPOSES ONLY
The real question is thus whether ICASA should be entrusted with responsibility to regulate
competition in the sector at all. The recently retired Competition Tribunal chairperson, David Lewis,
made reference to these points in a speech lamenting the lack of competition in the
telecommunications industry, and indicated that the competition authorities should be able to
exercise clear jurisdiction over competition matters in the sector. He noted that jurisdictional
confusion is caused not only by the legislation, but is also a function of ‘turf battles, official
ineptitude and the obvious interest that the large telcos have in ensuring that this problem is not
sorted out’. He concluded that while ICASA may be better placed to deal with matters relating to
policy in the communications sector, it is not well equipped to deal with the overall economic and
competition implications for the economy. Interestingly, ICASA’s Chairperson, Paris Mashile seems
to agree – he recently called Chapter 10 “a labyrinth” and suggested that there should be a review
of the ECA “or a complete rewrite”.55 Although it is clearly undesirable to select a system of
regulation based on the present deficiencies in a regulatory agency, it is surely equally unwise to
choose to continue to entrust a regulator with vital regulatory powers when it has proven largely
unwilling – or unable - to exercise these powers.
However, the amendment leaves ICASA’s ‘ex ante’ powers in Chapter 10 intact and does not
allocate ex post regulatory powers exclusively to the competition authorities. Rather, it contents
itself with identifying which regulator has ‘primary’ authority in relation to ex ante and ex post
regulation, leaving it up to the regulators themselves to determine how they exercise their powers
by agreement. As ICASA noted in its submissions on the Bill, where concurrent jurisdiction over
competition matters exists, this can be managed, for example in an MOA. This is supported by he
international experience, which suggests a number of highly effective ways to enhance coordination between competition and communications regulators. However, the current MOA is
deficient in a number of respects and could benefit from amendments to better manage effective
co-ordination between the authorities; eliminate time consuming and costly duplication of
processes and ensure consistent and fair enforcement. There should be a stronger focus on
cooperation and information exchange, and each body should be obliged to consult with the other
on regulation in the sector to ensure that it chooses regulation which enhances, rather than harms
competition. It should be amended, but only after proper consultation with stakeholders.
Perhaps most unfortunately, the amendment does not completely resolve the issue of whether the
Competition Act applies where other regulation requires or permits particular conduct. This, of
course, is something which cannot be determined by an MOA - it can only set out procedures for
regulators to handle the exercise of their jurisdiction – not determine its scope.
Parliament has lost a golden opportunity to clarify once and for all which legislation applies to
conduct by firms in the electronic communications sector, and to spell out what the roles of the
regulators are. As a result, the courts may yet be left to decide who wins the tug of war – and if
parliament dislikes the decision, further amendments to the Competition Act and/or the ECA may
be required in due course.
55
Candice Jones ‘ICASA calls for ECA overhaul’ ITWeb, 28 July 2009.