Law 10/2013 was published on April 11, setting forth the competition legal framework applicable to the development of economic activities in Mozambique (“Competition Act”).
We highlight the following:
- Creation of a Competition Regulatory Authority – a regulatory entity with financial and administrative autonomy will be responsible for the supervision, regulation and sanctioning, as required by the Competition Act and by its own rules to be approved by the Council of Ministers.
- Scope – as a rule, the Competition Act applies to all economic activities carried out within Mozambican borders by both the public and private sectors. Nevertheless, there are four exceptions to this rule: i) certain collective agreements entered into with workers’ organizations; ii) practices aimed at achieving non-commercial purposes; iii) specific agreements arising from international obligations; and iv) economic segments subject to special protection, in the national and consumer interest.
Antitrust Practices – The following practices are deemed anticompetitive:
- Horizontal agreements restrictive of competition
- Vertical agreements restrictive of competition
- Abuse of dominant position
- Abuse of economic dependence
Some of these practices may be deemed justified provided that certain conditions are met. It is also possible to previously apply for an exemption before the Competition Regulatory Authority, including for exercise of intellectual property rights and the rules of professional associations.
Merger Control – the Competition Act provides that certain mergers (including acquisition of shareholdings, ownership or right to use over assets, rights or execution of agreements granting a decisive influence on the composition or on resolutions by corporate bodies) involving certain annual turnover thresholds, invoicing or market shares are subject to prior notification to the Competition Regulatory Authority.
However, the exact market shares, annual turnovers and invoicing subject to prior notification are unknown and must still be established by the Council of Ministers.
It should also be emphasized that mergers must be notified within seven working days after the agreement, and cannot be implemented until a tacit or express non-opposition decision is made thereon.
In addition to the above, the Competition Act establishes specific procedural provisions and sanctions, and sets out that it will enter into force 90 days after its publication, i.e., on 11 July 2013.