An Evaluation of the Influence of BEE on the Application of Competition Policy in South Africa

The links between BEE and competition policy are outlined in the Competition Act of 1998. It is recognised in the preamble to the Act that competition law has to specifically address the excessive concentration of ownership and control of the economy and the unjust restrictions on the full participation of black people in the economy that arose from the various Apartheid laws. Thus, the Act allows for exemptions from the provisions on anti-competitive practices where such practices promote the ability of black-owned and controlled enterprises to become competitive. Furthermore, decisions on mergers on public interest grounds made by the Competition Commission and Tribunal take into account the effect that the merger will have on the ability of black small businesses or firms to become competitive.

Although the objectives of competition policy seem very clear in theory, it is unclear what has been happening in practice. The paper aims firstly to look at the effect accepted BEE policies have had on the application of competition legislation. A critique of the relationship between the two will be undertaken and finally recommendations will be made on how practice can be modified to match more closely with theory. The methodology that will be used will include a literature review as well as an analysis of relevant cases that have been brought before the competition authorities.