“We need to focus more on cartels, the ultimate supreme evil of competition law”

“Anti-competitive business practices are just as old as commerce and trade themselves and shall continue to occur as long as businesses exist to make profits. What is important is for competition authorities to be more alert on possible anti-competitive practices taking place, so that they are detected, prohibited and punished immediately before the damage on the market is substantial,” Dr Willard Mwemba says. This week, for its interview, BIZweek welcomes the Director and Chief Executive Officer of the COMESA Competition Commission.

R.V. – H.B. 

Despite authorities and regulators like the COMESA Competition Commission, companies still indulge in practices contrary to the competition rules. Why do you think this is so? Should there be more severe penalties to deter others from doing so? 

Businesses, by their nature, are driven by the profit motive, and left unchecked, will do anything to increase the profit prospects. This is the reason why there are various regulations to regulate the conduct of businesses. Competition Regulation is just one of them. Our observation, at the CCC, is that anti-competitive business practices are just as old as commerce and trade themselves and shall continue to occur as long as businesses exist to make profits. What is important is for competition authorities to be more alert on possible anti-competitive practices taking place, so that they are detected, prohibited and punished immediately before the damage on the market is substantial. You are also right that there should be hefty sanctions for those who violate the law intentionally and are engaged in hard core cartels such price fixing, market allocation, collusive tendering/bid rigging, and sales and production quotas among other violations. It should however be made clear that not all competition infringements are hard-core. Others are committed unintentionally by companies engaging in conduct without an anti-competitive intention, but the effect on the market is anti-competitive. In such situations, the CCC prefers remediation rather than penalisation. The focus of competition authorities should not be to punish businesses, but to address the anti-competitive effects on the market. Significant and hefty fines should be considered mostly for hard-core anti-competitive conduct.

Freight rates have slowly started to fall. How far have you reached with the investigation into potential violations of the COMESA Competition Regulations by various shipping companies? 

The COMESA Competition Commission (CCC) is glad to learn that the freight rates have begun to fall slowly. This is very important as freight is an important aspect of commerce. We have observed that recently, the cost of food and other items have risen in most of our member states. Most of our member states import fertiliser and other agricultural inputs and these enter the Common Market through shipping transport. The reduction will therefore assist in lowering the cost of living in the Common Market.

With regard to our investigations, we have reached an advanced stage and the parties are cooperating very well with the CCC. Once the investigations are completed, a public announcement will be made with regard to the findings of the investigation. Suffice to mention that the commencement of an investigation does not mean that the parties have already been found culpable. It only means that the CCC thinks there is a prima facie case worth investigating to establish whether or not the COMESA Competition Regulations have been violated.

The African Continental Free Trade Area (AfCFTA) has been operational for more than one year now. Has its coming into operation brought any change for the CCC? If yes, in what ways? 

Indeed, the AfCFTA has been operational for over a year. However, the competition protocol under the AfCFTA is not yet operational. It was recently approved by the heads of state in February 2023. Once it becomes operational, the CCC will work closely with the AfCFTA to ensure that anti-competitive practices are detected and prohibited. The objectives of the AfCFTA Competition Protocol and the COMESA Competition Regulations are similar, and we, at the CCC, look forward to working closely with the AfCFTA to achieve these objectives.

How integrated is the CCC within the AfCFTA? 

The CCC is one of the institutions of the Common Market for Eastern and Southern Africa (COMESA). The main objective of the COMESA is to strengthen and achieve convergence of the economies of its 21 member states through the attainment of full market integration. The COMESA Competition Regulations are one of the tools COMESA uses to achieve this objective. The AfCFTA has a similar objective for the 55 African Countries, 21 of which are in COMESA. Further, a number of instruments, including the Abuja Treaty, have recognised the Regional Economic Blocks such as COMESA as the building blocks to integration at the continental level. Therefore, the CCC is well integrated in the AfCFTA and its aims and objectives are not in conflict with those of the AfCFTA.

After more than ten years, what factors would you say still represent major challenges for the CCC? 

The major challenge that remains is the lack of understanding of the benefits of cross-border competition enforcement by various stakeholders and the lack of effective competition laws and institutions in some member states. The CCC has however been working round the clock to raise awareness on the importance of cross-border competition enforcement to all the stakeholders in the member states and also to ensure that all the member states have effective competition laws and institutions.

How is the relationship between the CCC and the Competition Commission of Mauritius? 

We have an excellent relationship not only dictated by the COMESA Treaty and the COMESA Competition Regulations, but also by a cooperation framework arrangement signed between the Competition Commission of Mauritius and the CCC. For example, the Competition Commission of Mauritius and the CCC have worked together on over 228 mergers and acquisitions and over 13 restrictive business practice cases. Additionally, the CCC has handled over 15 consumer welfare cases that affected Mauritius. We have also cooperated and collaborated on matters of capacity building and technical assistance both for Mauritius and for other member states.

Would you say there are fewer cases of anti-competitive practices in Mauritius as compared to the African continent? 

Difficult question to answer with absolute certainty. I would however surmise that this is the case for two obvious reasons. The first one is that the Competition Commission of Mauritius is very effective and robust in the enforcement of the Mauritian competition law. Therefore, it should be the case that most anti-competitive practices would easily be detected and prohibited. Secondly, the Mauritian economy is relatively smaller compared to other countries on the continent. More business activity and therefore anti-competitive conduct would be more prevalent and difficult to detect in a bigger economy than a smaller economy.

What are your views in regard to online commerce and how far is the COMESA Competition Commission prepared to keep track of the progress in online business?

Online commerce is on the rise and becoming a permanent way of doing business. It has changed the way we conduct commerce and is here to stay. It has also brought significant advantages such as convenience and efficiency. However, just like any new invention, it has come with its own disadvantages, inter alia fraud, misleading conduct and misrepresentation, supply of defective goods, lack of an efficient redress mechanism in case of grievance, and lack of knowledge by consumers. We, at the CCC, are alive to these facts and have put the issue of online commerce as a priority in our strategic plan. Further, we have a team dedicated to identifying infringements in this new area. A number of cases have already been identified and addressed. Consumers have already been assisted and we will continue to do so. The CCC is also undertaking various studies to identify anti-competitive concerns and consumer violations in this sector and to better understand how to deal with these matters. We have also prioritised raising consumer awareness of the possible violations of their rights emanating from this sector.

What are the main areas where we need to walk the talk in terms of competition structures?

We should focus more on cooperation as competition authorities in Africa to achieve a more optimal outcome. We also need to focus more on cartels, which are the ultimate supreme evil of all competition law violations and cause more damage to markets and economies at large. Cartels gravely erode the welfare of consumers and rob our governments of millions of dollars every year. I think this is where we should build more structures of cooperation as competition authorities in COMESA and Africa in general.

Biography of Dr Willard Mwemba

Dr Willard Mwemba is the Director and Chief Executive Officer of the COMESA Competition Commission. The COMESA Competition Commission is responsible for both Competition regulation and consumer protection in the Common Market.

Prior to that, Dr Mwemba was Head of the Mergers and Acquisitions Division at the same institution for seven years. He previously worked for the Competition and Consumer Protection Commission in Zambia for seven years, where he rose through the ranks to become Director of Mergers and Monopolies, until he left in 2013. During his employment at the Competition and Consumer Protection Commission in Zambia, he also worked in the Consumer Division, where he handled a number of cases that had a direct impact on consumers, especially the poor.

With more than 17 years’ experience in competition and consumer law enforcement, Dr Mwemba has been key in the enforcement of the COMESA Competition Regulations in the Common Market, as well as in the development of competition and consumer protection laws in some member states. He drove the process of drafting, inter alia, the COMESA Competition Mergers Operations Manual, Merger Investigation Procedures, COMESA Merger Assessment Guidelines and amendments to the COMESA Merger Notification Form 12. Further, Dr Mwemba was instrumental and led the team that amended the Rules on the COMESA Merger Notification Thresholds and Merger Filing Fees. Dr Mwemba continues to play a key role in the development of competition and consumer protection laws, guidelines and operational manuals in the member states and providing support to other Regional Economic Communities in the development of such enforcement tools. He is a member of the Advisory Board of the United Nations Conference on Trade and Development Competition Training Centre for Middle East and Africa.

Dr Mwemba, who has written extensively on the subject of competition law and has spoken at several high profile forums, holds several qualifications, among which two Bachelor’s degrees with specialisation in Law and Economics from the University of Zambia, a Master’s degree in European Union Competition Law from King’s College London, and a PhD in Competition Law from the University of Cape Town.