The Competition Amendment Act of 2009 has been quietly waiting in the wings pending the announcement of a date that it will become effective. On Friday 8 March 2013 provisions published in the Government Gazette confirming that the provisions of Section 6 of the Amendment Act which provides for market inquiries will come into effect on 1 April 2013.
Under the provisions of the Amendment Act a market inquiry means a formal inquiry relating to the general state of competition in a market, without specific reference to the conduct of a particular firm.
The Competition Commission may itself, or in response to a request from the Minister, conduct a market inquiry according to its terms:
- if it has reason to believe that a market for goods or services prevents, distorts or restricts competition within that market; or
- in order to achieve the purposes of the Act.
Although previous inquiries have been held by the Commission, most notably the Banking Inquiry, participation was on a voluntary basis. The new Section 4A of the main Competition Act formalizes the provisions for inquiries and gives the Commission wide powers. The Commission is entitled to issue summons to any person in order to cause them to attend the market inquiry together with books and documents, face interrogation under oath, and there are serious consequences for non-compliance.
The Act makes provision for restrictions on confidential information and how confidential information may be used. It also specifies that the powers of search and entry into premises will not apply.
Once a market inquiry is complete, the Commission must issue a report to be published in the Gazette and submit a copy of their report to the Minister with or without recommendations which could lead to amendment policy, legislation or regulations for the industry concerned. The Commission may also, relying upon the information which has been gathered during a market inquiry, initiate a complaint, reach a settlement agreement with a respondent, or refer a matter directly to the Competition Tribunal for adjudication.
It is widely accepted that the introduction of the provisions for market inquiries have finally been introduced in order to facilitate an inquiry into private healthcare in South Africa.
The Commission recently informed Parliament that following concerns about pricing, costs and the state of competition and innovation in private healthcare, it intends to undertake a market inquiry into that sector with the purpose of promoting the efficiency, adaptability and development of the economy as well as to provide consumers with competitive prices and product choice.
The Commission has been working on provisions for scoping the inquiry which is likely to be announced soon, using these powerful new enabling provisions.