INTRODUCTION
This note seeks to discuss in brief the new Competition Policy for Zimbabwe (‘’The Policy’’) which was published in 2017 and serves as a ‘’gateway’’ document that will aid in the reviewing of the existing Competition law framework in Zimbabwe (‘’The Act’’) and drafting of the new Competition legislation in Zimbabwe.
The Competition Policy has been formulated as a strategy for enhancing Zimbabwe’s ability to promote free entry in the market place by investors and all firms irrespective of their size; the attraction of both domestic and foreign investment flows; innovation and transfer of technology from intellectual property rights holders and other related objectives that will ensure healthy competition and fair business practices amongst competitors.
Below I shall dissect the important aspects that make this Policy document of such groundbreaking importance in both the legal and business environments.
CHAPTER 4
Although the current Legal framework has managed to bear fruits and address inefficiencies which were obtaining in the business market, there are gaps which need to be filled. Chapter 4 identifies those gaps and highlights the deficiencies that exist and which ought to be remedied by the implementation of the Policy. A few will be discussed below.
Firstly, the issue of the definition of mergers and acquisitions under the current Competition Act leaves a lot to be desired as mergers which are contrary to the public interest are prohibited. The prohibition is not categorical and is scattered in different provisions thus making the interpretation thereof a complicated undertaking. Furthermore, the provision does not clearly provide which among the merging parties (Acquiring or Target firms) is responsible for notifying the CTC (‘’Competitions and Tariffs Commission’’) of the intended merger transaction. Also the Act as it stands only regulates mergers of entities which will result in a change of control whereas in certain circumstances two firms that intend to merge may not necessarily want to change the control of the firms.
Another shortfall of the current Zimbabwean competition legal Framework as highlighted in this Chapter is the lack of a comprehensive definition of dominance and the lack of a clear general prohibition of the abuse of dominance. The act also does not provide for a level of market share that a person must attain to be considered as dominant. Furthermore the framework distinguishes between various forms of objectionable conduct, namely unfair business practices, restrictive agreements and unfair trade practices, but it does not contain a provision for general prohibition of anti-competitive agreements.
Although the framework provides for notification of rule of reason agreements, it does not stipulate neither the timeframe for which the notified agreement will be reviewed nor the period for which the agreement will be exempted from competition law. Another apparent gap is the lack of exploitation of the Channels available in respect of advocating and furthering competition culture in Zimbabwe. This ideally should be done through the media.
It should also be noted that the Competition framework in Zimbabwe does not expressly provide for recognition of the existence of supranational competition bodies such as COMESA. Unequal application of the Competition law with regards to State Owned Enterprises and firms in the Private sector has also fostered disparities to the detriment of the Competition process.
CHAPTER 5
This Chapter forms the crux of this Policy as it sets out the objectives and measures which shall be taken in order to deal with the so called ‘’gaps’’ that exist in the Competition Act and the application and implementation of it thereof. These measures will for the most part be spearheaded by the Competition Authority (‘’The Authority”) In general the Policy is moving in the direction of adopting clearer definitions and use of common competition language for terminologies to avoid mix-ups which may open unnecessary arguments. As well as the development of guidelines on various issues to be adopted by the Authority. Specifically, the Policy will provide for a comprehensive definition of a merger that encompasses all mergers. In addition, appropriate merger notification guidelines and notification threshold values will be formulated to ensure certainty and promotion of SME’s.
The Policy seeks to address the issue of Dominance and Abuse of Market power by providing a comprehensive definition of the concept of dominance that encompasses all types of dominances either unitary or collective. Non- Exhaustive lists of types of abusive conducts by firms and types of abuse of market power will be published. The commensurate sanctions will also be published.
The Policy aims to provide a comprehensive definition of what an essential facility is in order to create legal certainty. Furthermore, the new Competition law will prohibit unjustifiable denial of access to an essential facility. The Authority will also be tasked with the responsibility of publishing an access guideline on matters such as cost, timetable for access to the facility and timeframe for such permitted access to create certainty. The Competition Law will expressly provide for definition of Government and Government bodies in so far as they engage in trade. The Authority will accord equal treatment to both State owned Enterprises and those in the private sector as per the provisions of the competition law. Other objectives and measures can also be gleaned from the Policy document itself.
CHAPTER 7
Three Institutions are given the mandate to implement the policy and these are the Competition Authority, Sector Regulators and the Judiciary. However amongst the three of them the Competition Authority plays a central role. The Authority is tasked with monitoring, controlling and prohibiting acts which are likely to adversely affect competition in Zimbabwe. The Authority will be made accessible countrywide and also will publish it operations for the consumption of the greater populace.
The Judiciary through the court system will also play a role in enhancing the enforcement mandate of the Competition Authority. As per the policy document there will be an institutional coordination mechanism between the Authority and the courts for the purposes of identifying issues that may need the attention of either institution Sector regulators exercising both economic and prudential regulation will play a key role in competition enforcement through institutional linkages and coordination with the Authority
CONCLUSION
The Competition Policy is to be embraced as progressive and very much needed especially given the current socio-political landscape the Country finds itself in at the moment. The Shortfalls of the current Competition Act required such a document which will bridge the gap between where we are now in terms of our Competition law and where we ought to be in the modern era. However, as it stands this policy is merely a set of aspirations of objectives and measures which are colourfully couched. They will remain so until a real effort is made to implement them.
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