The Competition Amendment Bill 2018 is the new Black Economic Empowerment (BEE). This is the conclusion of business organisation Sakeliga after attending and making a presentation at the hearing of the Portfolio Committee on Economic Development at Parliament yesterday.
Attending the hearing, Piet le Roux, CEO of Sakeliga, noted the organisation’s key concern: “The Competition Amendment Bill of 2018 injects race into every corner of the economy. It proposes that commercial conduct be judged differently depending on the race of the economic actor. Under the Bill, competition authorities become mandated to approve, reject, penalise or circumscribe prices, mergers, acquisitions, procurement and other economic behaviour differently for white and black persons.”
While the Bill uses the term “historically-disadvantaged person”, the relevant criterium is essentially one of race. The Bill contains multiple provisions of this nature, compared to four appearances in the current Competition Act.
By way of example, Le Roux pointed to two clauses of the Bill: “Clause 5 prohibits firms deemed to be dominant from requiring firms controlled by black persons to sell products to them at ‘a price which impedes the ability of the supplier to participate effectively’. Stated differently, firms procuring from black-owned firms will face the threat of litigation should they engage in bargaining for lower prices. Not only will this ironically serve as a disincentive to deal with black-owned firms, but it will also incentivise black-owned firms to increase prices at the eventual expense of consumers of all race groups.”
Clause 7 of the Bill stipulates that entry, participation and expansion of firms owned or controlled by black persons should be an important consideration in the process of determining exemptions from prohibited conduct under the Competition Act. Under this clause, something deemed to be anti-competitive if a white person does it could be regarded acceptable if a black person does it. It is hard to see how this kind of race-selective legislating is compatible with the constitutional requirement for laws of general application. Perhaps even more importantly, it would also, when potential business partners are deemed to be of different races, prejudice the trust and respect required between them, disrupting organic economic normalisation.
Le Roux emphasised that, while the Competition Act has since its inception contained some limited scope for discrimination on racial grounds, the Bill now puts these considerations at the heart of competition policy. “It is clear to me that the Bill has been purposefully crafted to turn competition law into a vehicle for BEE. Of course, the result will not be real black economic empowerment, but the empowerment of bureaucrats and greater state control of the economy at the cost of consumers, employees and investors of all race groups.”
Click here to read Sakeliga’s written submission to the portfolio committee.