Betweenity - News for the Connected

Happy to have contributed to this study. Betweenity - News for the Connected

Over the past 10 years, the Egyptian Competition Authority has gone from strength to strength and led by example in terms of sheer genius and work ethic. It has been a pleasure engaging with the ECA over many years. For our recent webinar on the ECA's new Vertical Guideline (which is yet another trend-setting guideline for Africa) click here: https://lnkd.in/dHNicTtA. Betweenity - News for the Connected Mahmoud Momtaz, PhD Willard Mwemba Toka Hesham Rana Khoweiled Nadine Abdelhamid Elkheshen Marina Iskander Frederic Jenny Ioannis Lianos

I am not entirely convinced by the The Competition Commission South Africa’s and Competition Tribunal of South Africa’s prohibition of the Sasol/Draslovka merger. The merger was prohibited because: ● pre-merger, Sasol was vertically integrated, so it sourced all NaCN inputs at an internal transfer cost; ● Draslovka’s buying of the plant would result in arm’s length sales between the parties, i.e. increased prices; and ● according to the Tribunal, a prohibition would require Sasol to keep charging transfer costs, as the NaCN plant was not a profit maximiser. Between the Commission’s prohibition and the Tribunal hearing, Sasol changed its pricing methodology (and upped prices). Sasol stated that the purpose of the new pricing method was to restore profitability. The Tribunal believed that the (prohibited) merger effectively “caused” Sasol to change its pricing mechanism. Some observations: ● Par 108.1 of the decision, which is partially blocked out, reveals that, since at least April 2020 (i.e. 18 months before the notification), Sasol's pricing methodology has been identified as a cause of concern by it. This led to Sasol's decision to sell the NaCN plant. ● This confirms that Sasol (i) wanted to sell NaCN at open market prices, and therefore, that it (ii) wanted to sell the plant to a bidder (and not the other way around). This makes commercial sense. ● Despite this recognition by the Tribunal, it proceeded to argue the opposite – that the merger “caused” Sasol to increase prices. ● Ironically, neither the price level, nor the causality, was relevant from a counterfactual perspective. The relevant counterfactual was Sasol’ own ability to employ whatever price methodology it wanted to in the event of a prohibition! ● Of course Sasol did not revert to a cost transfer methodology post prohibition (as anticipated by the authorities), because it wanted to up its profitability in 2020 already. And of course Sasol is a profit-maximising firm (contrary to the authorities’ position on this) – from there its desire to reap open market profits! ● Ironically, neither of the authorities grasped their lack of leverage in the merger – i.e. that not even a prohibition would have stopped Draslovka or Sasol (as the case may be) from upping their prices, post-decision. ● E.g. in the early 2000’s, the authorities had “no choice” but to approve the mergers between the MNOs and their dealerships despite pricing concerns, because a prohibition would have simply led to the MNOs establishing their own dealerships to stop the downstream price competition. The same lack of leverage existed in the Sasol case. Had the merger been conditionally approved, at least the Commission would have maintained jurisdiction over Draslovka's conduct for a certain period of time. Thanks to the prohibition, the Tribunal rubberstamped the exercise of unconstrained pricing power by Sasol going forward. Betweenity - News for the Connected

8 points why I am not entirely in agreement with the way in which the Competition Tribunal of South Africa formulated the interim relief in the Lottoland matter: ● As background, Google decided to terminate Lottoland’s access to the Google Ads platform, because Google believed that Lottoland operated in contravention of the SA Lotteries Act, which is against Google’s T&Cs. ● The Tribunal ruled that it is not appropriate for Google to try to determine, by itself, complex, disputed issues in relation to the legality of Lottoland’s business to the extent of terminating its access to Google Ads – because the legal disputes are substantive. ● So the Tribunal granted interim relief in favour of Lottoland to retain access to Google Ads. ● However, the Tribunal made the interim relief conditional upon Google allowing other similar SA providers to utilise Google Ads. ● The conditional relief means that, should Google decide to terminate the other SA providers too, (i) Lottoland’s interim protection would fall away and (ii) Google would effectively win back the very liberty denounced by the Tribunal to determine the disputed, substantive disputes in relation to the legality of Lottoland’s business - and the businesses of other providers - and to exclude competitors. ● There is good precedent for not allowing market players to make calls on complex legal issues if it will result in the exclusion of competitors from the market – remember the Tribunal’s decision in Wilec/Allbro? ● It appears as if the Tribunal will now allow a repeat offense to invalidate the first offense, despite condemning the first offense on the basis of prima facie anti-competitive effects. ● Why not simply granting the relief on the merits without making it conditional? Tribunal’s media release: https://lnkd.in/dbVgMzMt Betweenity - News for the Connected

The Association of Telecoms Entrepreneurs in Nigeria has raised concerns over the use of USD-denominated contracts by Nigerian telecommunication and credit service providers in contravention of Central Bank regulations, which require that domestic transactions be conducted in Naira. The FCCPC Nigeria may wish to consider the recent Competition Authority of Kenya "Mogo" case (link below) - the CAK established that the charging of interest by the Kenyan bank in USD constituted unconscionable conduct. Arguably, the conduct could also pass for excessive pricing, which is prohibited in terms of section 72(2)(a) of the Federal Competition and Consumer Protection Act, 2018. The Mogo decision is available here: https://lnkd.in/dJveGcF9 The Association's concerns are set out here: https://lnkd.in/dsgjA44X Florence Abebe Chukwuyere Ebere Izuogu Leonard Otuonye Ugbajah Betweenity - News for the Connected

“This is going to be the challenge of our generation – not only as it relates to antitrust – but also as it relates to law: culpability and accountability when you have non-human actors."   This is according to Richard Boulware, U.S. District Court Judge for the District of Nevada in Las Vegas, during the ‘Antitrust Across Africa’ Conference presented by the American Bar Association Antitrust Law Section in Cape Town in September 2024.   Judge Richard discussed the antitrust challenges associated with the use of AI models by competitors to collude.   “How do you hold people responsible when they are merely feeding information into a computational model and then charge the recommended price? “If I as an actor can avoid liability by simply turning my decision-making over to an AI model, is there not going to be a race to the black box? That is where we are heading. “Another challenge is the specialised knowledge as it relates to AI models – one of the things that I have learnt about these models over the course of many months is that no one really knows how they work, and how they give an answer. “The entire process of figuring out and determining liability is based upon the fundamental premise that we can know what we know – that we at least have some idea of how decisions are made. “Without some understanding of putting it in a framework of laws that deals with this, we will not, in a decade or two, be able to hold anyone responsible, because everyone can delegate decision-making to big computational models. “This is where we are heading, unless we – those of us who are in this space – think of new ways about monitoring conduct recommended to us by models that we don’t understand.   “We must prepare. We must be diligent. We must think about our roles in new ways so that markets can be both competitive, and responsible, and accountable." Photo: Betweenity   Steve Cernak Lynda Marshall Maria Coppola Molly Askin Steven Couper Amanda Wait Leslie Overton Anne Catherine Faye Fiona Schaeffer John Oxenham Michael-James Currie Vani Chetty Hardin Ratshisusu Vellah Kigwiru Mahmoud Momtaz, PhD Willard Mwemba Florence Abebe Kemei David Siboni Simelane Maseko Eugénia Pereira Deshmuk Kowlessur Betweenity - News for the Connected www.betweenity.online

“While the US antitrust laws have been on the books for a little longer – since 1890 – you [in Africa] have shown us how competition law enforcement is dynamically evolving to meet the needs of communities in newer and emerging economies.” This is according to Fiona Schaeffer, Partner at Milbank and the International Officer of the American Bar Association Section of Antitrust Law, during the American Bar Association Antitrust Law Section Conference in Cape Town in September 2024. “You have focused on the importance of promoting a sustainable economy for future generations. These are topics that we are currently navigating in the US. The lessons that we are learning here will inspire and inform our work in the US and beyond. “Together, we can build a global framework of competition that champions opportunity for all. “In the words of the great Nelson Mandela, ‘Our struggle is not merely for ourselves, but for future generations that will inherit the world that we shape today’. “Let’s remember that the true measure of a person’s life is not in the accolades that they collect, but in the impact they leave on others. Photo: Betweenity Steve Cernak Lynda Marshall Maria Coppola Amanda Wait Leslie Overton Anne Catherine Faye John Oxenham Michael-James Currie Vani Chetty Hardin Ratshisusu Mahmoud Momtaz, PhD Willard Mwemba Florence Abebe Kemei David Siboni Simelane Maseko Eugénia Pereira Deshmuk Kowlessur Betweenity - News for the Connected www.betweenity.online

Join us for a webinar on the New ECOWAS Merger Regime with: ● Dr Simeon Koffi, the Executive Director of the ECOWAS Regulatory Competition Authority (ERCA); and ● Odie Strydom, Managing Director of Betweenity Date: This Friday, 8 November 2024 at 14:00 GMT Register here: https://lnkd.in/d9geWecp Email your questions to Dr Koffi here: [email protected] Welcome welcome! ECOWAS consists of 15 member states, which are Benin, Burkina Faso, Cabo Verde, The Gambia, Ghana, Guinea, Guinea Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. Three member states, i.e. Burkina Faso, Mali and Niger announced their withdrawal from the region in January 2024 and is currently serving their 1-year notice period. Betweenity - News for the Connected

“The Tribunal’s granting of interim relief to GovChat shows how far the competition authorities in South Africa will go to question the internal rules of large digital companies if they affect competitive conduct in the country.”   This is according to Jerome Wilson, South African SC during the ‘Antitrust Across Africa’ Conference presented by the American Bar Association Antitrust Law Section in Cape Town in September 2024.   WhatsApp threatened to offboard GovChat because GovChat tried to list different government departments under its own business account, which was against WhatsApp’s internal rules.   “The Tribunal decided that the offboarding attempt was prima facie anti-competitive because GovChat provided a very important service in South Africa during the Covid-19 pandemic.   Regarding mergers, Jerome says that the We Buy Cars prohibition years ago was based on conglomerate effects, and the impact of data on the entrenchment of such effects.   “At that time, it came as quite a surprise that the authorities were so aggressive to protect competition in these kind of markets – historically, the authorities were hesitant to involve themselves in these cases unless there was a very good basis for it.   “Today however, the bar to intervention in digital markets reduced significantly. The competition authorities are watching this space very carefully and one can't move as freely as perhaps one could historically.”   Regarding the value of a separate law governing digital firms, Jerome says that this debate ought to be had. The Digital Markets Act, and the Digital Markets, Competition and Consumers Act of the UK, set consistent standards and obligations for digital markets players, which is good for consistency and transparency.   The dilemma with South Africa’s approach to market studies is that the Commission assumes the role of investigator and adjudicator.   “The division of powers is largely done away with.” This creates a problem from a private practitioner perspective. Photo: Betweenity Steve Cernak Lynda Marshall Maria Coppola Amanda Wait Leslie Overton Anne Catherine Faye Fiona Schaeffer John Oxenham Michael-James Currie Hardin Ratshisusu Mahmoud Momtaz, PhD Willard Mwemba Florence Abebe Kemei David Siboni Simelane Maseko Eugénia Pereira Deshmuk Kowlessur Betweenity - News for the Connected www.betweenity.online