1. THE ROLE OF COMPETITION ADVOCACY IN SHAPING 20 YEARS OF
COMPETITION LAW IN SOUTH AFRICA.
Azania Yokwana and Daniela Bove
The authors write in their personal capacity and their views should not be attributed to those of
the Competition Commission.
Abstract
The paper illustrates the significant role of competition advocacy in the work of the
Commission over the past 20 years of effective competition enforcement. Competition
advocacy is an important tool recognised in parallel to enforcement measures. The paper
selected a number of cases in which competition advocacy played a crucial role in realising the
success of the Commission’s enforcement. We show how competition advocacy played a
significant role in cases in the ARVs market, in the construction sector, and in markets that
employ procurement or bidding processes in their operations. In each case the positive impact
of competition advocacy is illustrated accordingly. Therefore, section 1 gives a background to
the role of competition advocacy in competition law; section 2 illustrates the impact of
competition advocacy on notable cases in the market ARVs; section 3 then explores
competition advocacy in the construction sector mainly through the cartel cases that were
uncovered by the Commission, also highlighting how the advocacy programme spread through
to government public procurement (in section 4); section 5 shows the role of competition
advocacy in market inquiries, reflecting on the outcomes of the LPG Market Inquiry; and finally,
section 6 illustrates a case for the effective use of competition advocacy in the case of the
procurement of school uniforms. The paper further highlights, briefly, some of the strategic
alliances formed through the competition advocacy initiatives of the Commission.

2. 1
Contents
1. Introduction and background.................................................................................................2
2. Cases in the market for Antiretroviral (ARVs)....................................................................4
3. Advocacy in the construction industry................................................................................7
4. Advocacy in Government Public Procurement................................................................10
5. Market Inquiries as an important advocacy tool .............................................................11
6. Advocacy in the Procurement of School Uniforms ........................................................13
7. Highlights of Competition Advocacy Initiatives undertaken by the Commission..15
8. Conclusions and recommendations...................................................................................16

3. 2
1. Introduction and background
When South Africa’s modern competition regime came into effect, South Africa did not
have much of a competition culture to draw from. The economy was recovering under the
legacy of highly concentrated markets, international isolation and the exclusion of the
majority of the population from meaningful participation. The passage of the Competition
Act 89 of 1998 (the Act) and the launch of the competition authorities in 1999 marked a
new era.1
This year the competition authorities, the Competition Commission
(Commission), Competition Tribunal and Competition Appeal Court celebrate 20 years of
investigations and advocacy. Advocacy and outreach initiatives have played an important
role in the development of a culture of competition compliance amongst business
professionals, public officials and the public at large in South Africa.2
This paper reflects
on the role of competition advocacy in the work of the Commission in the last 20 years.
Advocacy in the Competition Act, 1998
Competition advocacy is one of the main features of modern competition law which aims
to promote and strengthen competition compliance in economies. The main beneficiaries
of competition policy and law are consumers, whose welfare is the objective of the Act.
Advocacy plays a vital role in securing the willingness and acceptability of competition
policy and law. Raising the level of awareness among the public is an important step
towards creating a competition culture within the country.3
In South Africa, competition advocacy is recognised as an important function of the
Commission.4
Section 21 of the Act mandates the Commission to undertake advocacy for
promoting compliance with the Act through non-enforcement means. Section 21 of the Act
outlines the Commission’s advocacy-related functions. These include raising public
awareness of competition law, collaborating with other regulators on competition-related
matters to ensure the consistent application of the Act, reviewing public regulations and
legislation and alerting the executive of any anti-competitive provisions contained therein.
The role of Competition Advocacy
It is especially important for competition agencies in developing countries to engage in
competition advocacy. This is because economic policies in developing countries undergo
1 Trudi Makhaya “Towards a Competition Culture – Advocacy and Outreach in the South African
Competition Regime” August 2012 CPI Antitrust Chronicle at page 2.
2
Ibid.
3 Prof. Pallavi Gupta, JIMS School of Law, Greater Noida “Concept of Competition Advocacy and
Role of CCI in India: A Practical Approach” 25 January 2017 jimsgnblog.blogspot.com.
4
Trudi Makhaya “Towards a Competition Culture – Advocacy and Outreach in the South African
Competition Regime” August 2012 CPI Antitrust Chronicle at page 2.

4. 3
fundamental changes as markets open to new entrants, new government and regulatory
agencies are formed, trade is initiated and state-owned enterprises are privatised. It thus
has a significant role in the transition process of developing countries such as South
Africa.5
The role of the Commission is not merely to enforce competition law.6
As mentioned
earlier, it is mandated to build relationships with stakeholders and participate in the
formulation of economic policy in South Africa, which may affect the structure of markets
and business conduct. In this regard, the Act makes provision for the signing of
memoranda of understanding between the Commission and sector regulators in various
markets such as financial services, consumer affairs, telecommunications and energy.
This is intended to outline the respective jurisdiction of the competition authorities and the
sector-specific regulators and to ensure consistent application of competition law across
the various sectors of the economy.7
In addition, the Commission plays the important role of a competition advocate to influence
Government policies that lower barriers to entry and promote competition in markets.
Therefore, there is a direct relationship between competition advocacy and the
enforcement of competition law. The aim of competition is to instil a competitive market
structure without the direct intervention of the Commission.8
Competition advocacy is therefore an important tool for fostering competition in regulated
sectors.9
Effective tools of competition advocacy include, among others, creating
awareness through seminars and workshops, market inquiries, published guidelines,
articles, brochures and opinions on proposed legislation. Through the use of these tools,
the Commission is able to communicate a message of competition compliance and provide
greater clarity about the ambit of competition law and enforcement. The next section of
5
J Clark OECD “Competition Advocacy: Challenges for Developing Countries” (2005) at page 1.
6 The World Bank, OECD “A Framework for the Design and Implementation of Competition Law and
Policy”(1998), Chapter 6, at page 93.
7
Trudi Makhaya “Towards a Competition Culture – Advocacy and Outreach in the South African
Competition Regime” August 2012 CPI Antitrust Chronicle at page 3.
8 Ibid.
9 Ibid.

5. 4
this paper will explore the tools of competition advocacy in selected cases of the
Commission in the last 20 years of enforcement and advocacy.
2. Cases in the market for Antiretroviral (ARVs)
There is a link between Competition Law and Intellectual Property Rights (IPRs). On one
hand, the IPRs stimulate innovation and creation and incentivise investment in Research
and Development (R&D). However, IRPs have the ability to restrict competition if the IP
holder has control over the use, supply and price of the products which can lead to market
power. On the other hand, fair and effective competition also encourages the development
of new and/or improved products. However, the primary objectives of competition law are
to enhance consumer welfare by providing consumers with product choices and
competitive prices; and to promote the interest of having cheaper generic products, which
may enhance competition in the market.
Below is an illustration of a case that had a huge impact in terms of the role of advocacy
in competition law enforcement. The case also sparked discussion around IPRs and
competition law, showing the need to develop IP policies in ways that do not restrict
competition.
Hazel Tau/ GSK and BI
The case 10
In 2002 Hazel Tau, a person living with HIV, and others filed a complaint alleging that
GlaxoSmithKline South Africa (Pty) Ltd (GSK) and Boehringer Ingelheim (BI) had
contravened the Act by charging excessive prices for their patented ARV medicines used
to treat HIV/AIDS. GSK was an originator pharmaceutical company having the sole right
to market and sell ARVs in South Africa. GSK held patents in South Africa on AZT
(branded as Retrovir), Lamivudine (branded as 3TC) and AZT/Lamivudine (branded as
Combivir). BI held patents in South Africa on Nevirapine (NVP) (branded as Viramune).
At that time both GSK and BI had refused to grant voluntary licences to generic
manufacturers, despite numerous applications. The complainants sought to compel the
respondents to license these ARV medicines to generic manufacturers.
The complainants had alleged that: GSK abused its dominant position in the market for
ARVs by charging excessive price on the product whereby there was a dramatic difference
in prices of ARVs sold in South Africa and generic alternatives sold outside South Africa
10 CCSA case no.: 2002Sep226.

6. 5
thereby making the product inaccessible to the general public. Moreover, the complainants
alleged that GSK was refusing to supply a competitor access to an essential facility. The
argument by the complainants was that patent protection did not entitle a firm to abuse its
dominance to the detriment of consumers and charge excessive prices.
Following an investigation, the Commission developed a case that both GSK and BI had
contravened the Act by (1) charging excessive prices; (2) refusing to grant a competitor
access to an essential facility; and (3) engaging in exclusionary conduct. Before the
Commission could refer the case to the Competition Tribunal for prosecution, GSK and BI
decided to settle the case and agreed to: grant licences to generic manufacturers; permit
the licensee’s to export the relevant ARV medicines to sub-Saharan African countries;
where the licensee did not have manufacturing capability in South Africa, permit the
importation of the ARV medicines for distribution in South Africa only, provided all the
regulatory approvals were obtained; permit licensees to combine the relevant ARV’s with
other ARV medicines; and not require royalties in excess of 5% of the net sales of the
relevant ARV’s. This was a consequence of an intense advocacy initiative through the
media whereby the respondents could not evade the negative publicity. Thus, the case
showed the importance of advocacy in the competition law enforcement space.
As a consequence of the settlement, GSK concluded eight (8) licence agreements of which
six (6) directly related to the South African market and BI concluded three (3) licence
agreements in total.
The role of the media in the case
The complainant together with other organisations for HIV launched a huge media
campaign to a point where the respondents could not cower under the negative publicity
as they were depicted as greedy and taking advantage of people living with HIV. This case
is a reflection of the collaborative efforts of the competition authorities, government and
civil society. It also illustrates the power of the media as a tool of advocacy. It was the first
time that anti-competitive conduct had a human face.11
It personalised the issues for
consumers in a way that they could relate to and how anti-competitive conduct could affect
11 Interview with Mziwodumo Rubushe, Principal Analyst of the Advocacy Division of the Commission
on 4 September 2018.

7. 6
them as consumers. This case also established the connection between competition policy
and health care. If competition would give consumers access to ARVs, it would increase
the chance of survival of consumers. If consumers were denied access to ARVs, it would
undoubtedly result in the death of HIV-infected consumers. The message received was
that competition benefits South Africans at a personal level.12
The after-effects
The case sparked a debate which acknowledged that although the IPR holder has
legitimate interests which need to be protected, policy measures (in this case competition
policy) are needed to curb or deter abuses that may unjustifiably distort competition. In
addition, the role of the civil society/organisations was in IPRs and Competition Law was
reflected in the case. Moreover, the Commission acknowledged that incentives for
innovation can be reflected in higher rates and prices but the prices need to be reasonable.
Also, during these discussions it was stressed that it is not reasonable to put premiums on
incentives to innovate which may restrict general access to a product such as an essential
treatment.
Furthermore, the licences granted to other pharmaceuticals to produce the generic of the
cocktail ARVs resulted to a significant drop in the price of the ARVS, from approximately
R4000 in the early 2000s to approximately R400 and less recently. More licenses were
granted in the market for ARV medicine as can be seen in a TAC/MSD & Merck case in
2007.13
The complainant, Treatment Action Campaign (TAC), alleged that MSD (Pty) Ltd
(MSD) and Merck & Co. Inc. (Merck) contravened section 8 (c) of the Competition Act by
refusing to license companies in South Africa (except for Aspen and Adcock) to import,
manufacture or use EFV products, and also to manufacture co-packaged and/or co-
formulated generic products containing EFV. However, the Commission found that the co-
formulated product was still undergoing a registration process with the Medical Control
Council (MCC). The Commission also found that Merck had already granted licenses to
four generic drug companies and therefore a sufficient number of competitors selling EFV
and contributing to consumer welfare. Therefore, the case was non-referred.
12 Ibid.
13 CCSA case no.: 2007Nov3328

8. 7
Moreover, there is evidence of entry in the market since the Commission’s intervention as
observed in the 2009 Aspen//GlaxoSmithKline14
merger decision. During the merger
investigation, it was found that post-merger Aspen and GSK would hold a dominant
position in the markets for zidovudine (est. 95.7%), lamivudine (est. 88.5%) and the
lamivudine/ zidovudine cocktail (85.3%). However, as an effect of GSK issuing voluntary
licenses for these patented products, several generic companies had entered the market,
namely Adcock Ingram, Ranbaxy (Sonke), BioTech, Cipla and Feza.
3. Advocacy in the construction industry
The fast track settlements
The construction sector came under the radar of the Commission due to collusion
uncovered in projects involving some of the top tier construction firms, the corporate
leniency applications filed and international trends for investigating bid rigging.15
The
Commission first initiated an investigation into the construction sector in February 2009
with regard to tenders for the construction of 2010 FIFA World Cup stadia. The second
investigation was initiated in September 2009 and covered all tenders for construction
projects.
During the investigation into these projects, the Commission received approximately 150
marker applications and 65 corporate leniency applications that implicated several firms
involved in bid rigging conduct. After considering approaches used in other jurisdictions,
firms involved in collusive conduct were invited in 2010 to come forward voluntarily to settle
the contraventions. This “invitation to settle” led the Commission to develop and launch a
fast track settlement procedure on 1 February 2011.16
This encouraged implicated firms to
disclose all the projects in which they were involved and that were subject to bid rigging
conduct. The advantages were that legal costs would be minimised, and the industry would
become more competitive. The fast track settlement process was part of the advocacy
work undertaken by the Commission in this sector.
14 CCSA case no.: 2009Jun4474
15 In accordance with the Commission’s Corporate Leniency Policy, the first firm to come forward
would be granted immunity and other firms that were willing to disclose their participation in cartel
conduct were invited to settle in terms of the Fast Track Settlement. Hardin Ratshisusu “The Roles of
the Competition Commission and the Construction Industry Development Board in promoting
competition and limiting construction industry cartels: a review of the Fast Track Construction
Settlement Project (2013) at page 7.
16 Ibid at 7.

9. 8
The construction fast track settlement programme led to construction firms admitting to
bid-rigging on 57 projects for a combined administrative penalty of R1.46 billion.17
The
confirmation by the Competition Tribunal in 2013 of the consent agreement with 15
construction firms completed the fast track settlement.18
There were more settlements
following this further investigative work in phase two of the construction investigation. The
Commission settled with 9 firms for a combined settlement penalty of R78 571 397.85.19
The finalisation of the fast track settlement process forged a new path for the Commission,
where an invitation to settle was the first of its kind in South African competition law
enforcement.20
Following the finalisation of the fast track settlement process, in October 2016 the South
African government, the South African Federation of Civil Engineering Contractors
(SAFCEC) and 7 major construction and engineering companies concluded the
Construction Voluntary Rebuilding Programme (VRP) agreement. WBHO, Aveng, Group
Five, Basil Read, Raubex, Stefanutti Stocks and Murray & Roberts collectively agreed to
pay R1.5 Billion into the Tirisano Construction Fund over a period of 12 years in settlement
of their respective fines relating to anti-competitive conduct, collusion and bid rigging on
projects linked to the 2010 Soccer World Cup.21
The VRP seeks to create opportunities for emerging black contractors. The transformation
obligations require companies to mentor emerging contractors through development
partnerships and/or to fast-track empowerment by selling assets and/or shareholdings to
emerging entities. Funding is used for enterprise development programmes, bursaries for
engineers from previously disadvantaged backgrounds, the training of emerging artisans
and educational and social upliftment programmes.22
On 15 February 2017 Cabinet welcomed the settlement reached through the VRP noting
that it was the most far-reaching sector agreement on transformation reached with
17 Hardin Ratshisusu “The Roles of the Competition Commission and the Construction Industry
Development Board in promoting competition and limiting construction industry cartels: a review of the
Fast Track Construction Settlement Project (2013) at page 1.
18
Khomotso Hlongoane and Mehluli Nxumalo “The Finalisation of the Construction Fast Track
Settlement Process” Competition News (2013) at page 16.
19 Ibid.
20 Ibid at page 17.
21 Who Owns Whom “The South African Construction Industry” April 2018 at page 32.
22
Who Owns Whom “The South African Construction Industry” April 2018 at page 38.

10. 9
government at that time that would help to give effect to government’s vision of
transformation and would serve as a model that could be drawn on for transformation in
other sectors.23
This is because the VRP Agreement set company level targets for
transformation, either through the sale of a minimum 40% of shares to black South Africans
or through partnerships with smaller black-owned construction companies, to help
increase their turnover to 25% of the listed company turnover, over a seven-year period.
In May 2017, the disposal of Murray & Roberts’ Infrastructure and Buildings businesses
for the sum of R314m was unconditionally concluded and transferred to a consortium led
by the wholly black-owned and managed South African holding company, Southern Palace
Group. The deal is in line with the transformation obligations contained in the VRP
agreement.24
In June 2017 WBHO reduced its interest in Edwin Construction from 57% to 49%. In
fulfilment of the requirements of the VRP agreement, WBHO has also entered into a
development partnership with Edwin construction, as well as with two other emerging
contractors, Fikile Construction and Motheo Construction. Stefannuti Stocks has entered
into development partnerships with TN Molefe Construction (Pty) Ltd and Axsys Projects.
Raubex has entered into development partnerships with Enza Construction and Umso
Construction. It is reported that Group Five is yet to meet its VRP commitments. The
company has confirmed that it intends to dispose of at least 40% of its construction
business to a suitable buyer.25
The outcomes of the Commission’s post-cartel advocacy programme, has achieved
positive changes in the construction industry, through the implementation of the VRP
whereby assets and skills are transferred to small, medium and micro enterprises
(SMMEs) and black-owned enterprises. The VRP is a ground-breaking model of effective
transformation. The agreement embodies the role of advocacy as an important tool to
further transformation objectives. It illustrates a coordinated inter-governmental approach
involving all the various departments.
23
Statement on the Cabinet meeting of 15 February 2017 accessible at
https://www.gcis.gov.za/newsroom/media-releases/statement-cabinet-meeting-15-february-2017 .
24 Ibid.
25 Ibid.

11. 10
4. Advocacy in Government Public Procurement
In the procurement space, the Commission has conducted advocacy and training
initiatives with the state’s funding regulator, the National Treasury and various government
departments in the public sector to ensure that amendments to procurement processes
are made where they are needed. Advocacy has been pursued in the construction sector
through various means, including in the enactment of laws, regulations and research and
a review of rating systems, policy intervention (e.g. implementing a Certificate of
Independent Bid Determination (CIBD) and the training of officials in procurement
processes. The training equips government officials with the necessary skills to spot rigged
bids in various sectors (e.g. procurement of government vehicles and health-related
tenders) and report them to the Commission for investigation and prosecution.
Through advocacy, the Commission uncovered various issues with the rating system of
the Construction Industry Development Board (CIDB). It was found to have aided and
abated the collusive conduct in the construction sector. It appeared that all the construction
firms that were found to have cartelised the sector were Grade 9 listed in terms of the
CIDB rating system but most black-owned firms did not qualify for this rating. Another issue
uncovered by the Commission was that the CIDB board that was mandated to monitor the
conduct of players in the sector and issue fines comprised of competitors. Thus, the body
appeared to play dual roles that of a player and referee.
The Commission considered its options to increase the level of competition in the sector.
It decided to conduct two programmes simultaneously, through enforcement and
prosecutions of cartelists and advocacy. As part of its advocacy programme, the
Commission lobbied the Department of Public Works to change the composition of the
CIDB board and its rating system.
The Commission was also instrumental in the development of the Certificate of
Independent Determination, which is now a prerequisite document for filing bids in the
construction industry. The objective of the certificate is for bidders to declare upfront that
they have not communicated with each other on price and the tender requirements prior
to submitting a bid. If bidders refuse to sign the certificate it may alert the Commission to
investigate the implicated firms. It also introduces a means to prosecute firms. Bidders

12. 11
who file the certificate could be liable for perjury if found to have been involved in collusive
conduct. Bidders now have a responsibility of bidding competitively and not to engage in
collusive bid rigging.
The purpose of the certificate was therefore a deterrence tool or preventative measure to
use before the conduct had transpired. In advancing its advocacy role, the Commission
lobbied National Treasury to make use of the certificate. Following the advocacy, National
Treasury issued a proclamation to codify the certificate as a binding legal document in July
2010. This is a significant example of an ex-ante intervention by the Commission through
advocacy. According to Mziwodumo Rubushe, Principal Analyst of the Advocacy Division
of the Commission, following the inclusion of the requirement for bidders to sign the
certificate prices in the bids received by National Treasury dropped by 26%.26
This
demonstrates how the certificate became a preventative measure.
The CIDB can play an active role in limiting cartels in the construction sector, particularly
if it enforces sanctions on implicated firms to be complementary to the mandate of the
Commission.27
In 2016, the Commission entered into a Memorandum of Understanding
with the CIDB to regulate their respective mandates over competition matters within the
construction industry.28
There is scope for further intervention through advocacy at the
regulatory, procurement and firm level to ensure that the sector is less susceptible to
collusive practices.
5. Market Inquiries as an important advocacy tool
Market inquiries are a relatively new tool in the South African competition landscape.29
It
aims to assess the state of competition in a specific market and identify obstacles to
improve efficiency and competition rather than focusing on the actions of specific
companies.30
Market inquiries also present a platform for the public and stakeholders to
26 Interview with Mziwodumo Rubushe, Principal Analyst of the Advocacy Division of the Commission
on 4 September 2018.
27
Hardin Ratshisusu “The Roles of the Competition Commission and the Construction Industry
Development Board in promoting competition and limiting construction industry cartels: a review of the
Fast Track Construction Settlement Project (2013) at page 19.
28 The MOU is accessible at http://www.compcom.co.za/wp-content/uploads/2016/05/MOU-CC-CIDB-
Signed.pdf.
29Tembinkosi Bonakele and Tamara Paremoer “Market Inquiries an Important Advocacy Tool”
accessed at http://www.compcom.co.za/wp-content/uploads/2014/09/Market-inquiries-an-important-
advocacy-tool.pdf
30 Ibid.

13. 12
articulate their positions, views and concerns regarding the functioning of markets in the
economy.
LPG market inquiry
The Commission conducted a market inquiry into the supply and distribution of liquefied
petroleum gas (LPG) in South Africa. The inquiry was completed on 28 April 2017.
Amongst others, the LPG Market Inquiry found several features or combination of features
that prevent, restrict and distort competition in the LPG market.
The key findings of the inquiry include high concentration whereby only five refineries
operate, (price and non-price) regulatory framework issues, limited domestic supply, long-
term supply agreements, distortions to competition in the sale of LPG through cylinders,
and the high cost of switching within the bulk LPG segment.
Recommendations
With regards to the limited domestic supply of LPG, the Commission recommended a
review of the regulatory frameworks applicable to the construction of LPG import and
storage facilities at ports. Further, in terms of long-term supply agreements, the
Commission recommended that contracts between refineries and wholesalers be capped
to a maximum of ten years and that all automatic renewal clauses be removed from all
supply agreements. In addition, to improve access to small wholesalers, the Commission
recommended that refineries must allocate a minimum of ten percent LPG production to
small wholesalers on at least two-year supply agreements.
The recommendations from the LPG inquiry were to be implemented through the advocacy
tool of competition policy. The advocacy engagements on the recommendations were
carried out with all the identified relevant stakeholders, including the large refineries and
wholesalers, the regulatory bodies such as the Transnet National Ports Authority (TNPA),
Department of Energy (DoE), and the National Energy Regulator (NERSA).

14. 13
Outcomes of the advocacy programme
One of the outcomes of the advocacy programme has been a withdrawal of a complaint
by Puregas (Pty) Ltd (Puregas) against Shell Downstream (Pty) Ltd (Shell) for unfair
business practices, after Puregas was able to secure a supply agreement on favourable
terms. 31
During the Commission’s investigation of the complaint case, it was found that
Shell had divested its LPG business to Easigas a few years back. In terms of this
divestiture, Shell was to exclusively supply LPG to Easigas. However, in an effort to comply
with the Commission’s recommendations in the LPG market Inquiry, Shell decided to
renegotiate its supply contract with Easigas and the new contract was effective from
February 2018. In terms of the new contract, Shell will supply 90% of its LPG total
production to Easigas and allocate the remainder to small wholesalers in line with the
Commission’s recommendation in the LPG Market Inquiry.
Moreover, the new supply contract meant that Puregas would no longer be able to
purchase from Shell as it does not fall within the definition of a small wholesaler as per the
LPG Market Inquiry. This meant that Puregas was to purchase from Easigas and was
concerned that the price it would pay for propane and butane would be slightly higher.
However, Puregas withdrew the complaint, citing that it was able to secure a supply
agreement with Easigas on favourable terms. Since the advocacy engagement, the
Commission has also received complaints regarding exclusive agreements in the LPG
sector. These cases are still under investigation.
6. Advocacy in the Procurement of School Uniforms
After receiving multiple complaints since 2010 about the high prices of school uniforms,
the Commission embarked on an advocacy program under the guidance of Mziwodumo
Rubushe, Principal Analyst of the Advocacy Division of the Commission, to create
awareness about the anti-competitive nature of exclusive supplier agreements. The
Commission received complaints that uniform suppliers had lifelong contracts with schools
and other suppliers were not given the opportunity to bid for contracts.
The provisions of the Act prohibit firms from engaging in conduct that may prevent
competition and lead to high prices and a lack of consumer choice. In particular, the Act
31 CCSA media statement published on 12 April 2018.

15. 14
prohibits firms from entering into vertical agreements that prevent or restrict competition.
The Act also prohibits dominant firms from abusing their dominance by charging excessive
prices and excluding their non-dominant rivals from participating in the market. The
concern was that long-term exclusive agreements could result in the creation of a
dominant supplier who may charge higher prices. In some cases, the Commission found
that the school Principal was also the supplier of school uniforms. It was difficult for the
schools to cancel the supply contracts since they received sponsorships for sport events
and maintenance.
Due to the repetition of these complaints, the Commission resolved to take a holistic
approach to the school uniform advocacy with an objective to address the matter
nationally. Engagements were held with various education stakeholders, including
Governing Bodies and Principals’ forums. The Department of Basic Education (DBE) sent
out a national circular in May 2015, drafted by the Commission, to all schools, in support
of the Commission’s work urging schools to be as generic as possible in terms of their
requirements for school uniforms, to make sure it is obtainable from many suppliers and
also to ensure that the contracts they conclude with suppliers were of limited duration. The
Commission also drafted an “Education Leaflet” which was circulated to school governing
bodies nationally with the purpose of encouraging them to participate in the advocacy
initiative. The expectation of the Commission was a price reduction (competitive prices of
school uniforms), more competition in the procurement process and more suppliers having
an opportunity to compete and increased access by competitors of school uniform
contracts. This targeted intervention by the Commission was very important because it
would entrench a constitutional right to education. Through its advocacy intervention, the
Commission expected that more students would frequent school as they would be able to
access school uniforms at affordable prices.
The Commission also embarked on a media campaign creating awareness through print,
radio and TV, with the aim of encouraging competition compliance. Following from this,
the Commission conducted a survey to determine if schools were aware of the uniform
guidelines issued by the DBE. A total of 1 595 interviews were conducted with school
governing bodies, principals and deputy principals from different schools.

16. 15
Among the findings was that a very significant proportion of the schools in each province
were not aware of the uniform guidelines. Other findings showed that the majority of
schools did not have exclusive agreements with school uniform suppliers. Only a third of
private schools (32%) and former Model C schools (33%) indicated having exclusive
agreements with school uniform suppliers. Of these schools, 87% of private schools and
53% of former Model C schools had just one exclusive agreement. Most of the evergreen
agreements were established a number of years ago, with one extending as far back as
1974. The survey found that most schools that had entered into exclusive agreements for
the supply of school uniforms had not done so through open tenders.
After having done some advocacy and talking to various schools and governing bodies‚
the Commission received more complaints from parents and various stakeholders‚ that the
anticompetitive behaviour was continuing. In January 2017, it launched an investigation
into the issues of anticompetitive behaviour. The Commission has since initiated a case
against various schools and uniform suppliers for excessive pricing. The Commission is at
an advanced stage of its investigation and will approach the Competition Tribunal to
impose penalties if a contravention of the Act is established. However, the Commission
has yet to conduct an impact assessment post its advocacy programme. This intervention
highlights the value addition of competition advocacy.
7. Highlights of Competition Advocacy Initiatives undertaken by the Commission
The Commission has undertaken various initiatives for promoting and creating awareness
of competition law in the last 20 years. Competition advocacy has played an important role
in screening cases and investigations undertaken by the Commission. Important advocacy
cases which will be continued in 2019 include Automotive Aftermarkets and School
Uniforms. Engagements with Labour, Big Business and Government took place through
the annual consultative forums. The Commission conducted several stakeholder
education and awareness sessions, targeting Government officials, small businesses and
the youth. The Commission also strengthened relations with its counterparts in the Brazil,
Russia, India, China, South Africa (BRICS) community. The Commission concluded
bilateral and multilateral Memoranda of Understanding (MOUs) with SADC, international
counterparts (such as the European Commission, the Federal Antimonopoly Service in the
United States, BRICs countries, Namibia, Kenya, Swaziland, Mauritius) and regulatory
agencies (such as the National Consumer Commission, South African Bureau of
Standards, Construction Industry Development Board, Department of Agriculture, Forestry

17. 16
and Fisheries and the International Trade Administration Commission, among others). It
also supported Nigeria in the development of their competition legislation and continued
to chair the African Competition Forum.
8. Conclusions and recommendations
Advocacy and outreach efforts have sought to extend this record of boosting a sustainable
competition culture supported by government policy and regulations. The Commission
must continue to play a central advocacy role in delivering the Act to South Africans
including the SMMEs.32
There is still more work to be done in sectors ranging from
telecommunications, healthcare, grocery retail, and agriculture. More competitive
outcomes through advocating for systemic change can be expected in years to come.
32
Kim Kampel, “The Role of South African Competition Law in Supporting SMEs – Can David really
take on Goliath?” (2003).