COMPETITION AND TARIFF COMMISSION v IWAY AFRICA ZIMBABWE (PVT) LTD 2016 (2) ZLR 813 (H)

Flynote

Competition and mergers: " legislation aimed against mergers " purpose of " prevention of monopolies " what must be shown before merger becomes notifiable to Competition Commission

Headnote

Merger control is not only about pre-emptively preventing a merged entity from abusing its dominant provision in the future; it is also about maintaining a market structure that is capable of producing the kind of outcome that follows from competition. The purpose of the Competition Act [Chapter 14:28] is to prevent the stifling of competition by the creation of monopolies. There must be evidence of a merger, of the acquisition E of a controlling interest in another business (which need not necessarily be majority shareholding in a company), and of a negative effect on the market in which the defendant operates. Where a merger takes place, the two entities concerned begin to behave as one economically. They join economically, even if one or both continue to exist or a new entity is formed.

The definition of a merger transaction which is to be subjected to the scrutiny of competition authorities seeks to identify those transactions which are suitable for merger review. "Suitable" means that the transaction in question could lead to consequences that are in competition with the chosen policy goals of the competition law regime. The focus is on whether the transaction may lead to structural changes in the relevant market and, accordingly, whether there is a reasonable likelihood that the transaction could interfere detrimentally with a competitive market outcome.

There must be evidence that a monopoly was created, that competition was stifled. There must be evidence of a "controlling interest", in the sense of one entity having the upper hand, or the wherewithal to dictate to the other, or manipulate the market through or together with the other, orat least to have the potential to manipulate the market by one firm over the other or by both in conjunction.