Cosatu deputy parliamentary office co-ordinator Tony Ehrenreich. Picture: THE TIMES
Cosatu deputy parliamentary office co-ordinator Tony Ehrenreich. Picture: THE TIMES

Union federation Cosatu on Wednesday welcomed the imminent signing into law, by President Cyril Ramaphosa, of the Competition Amendment Bill saying it will, among other things, promote investment and lead to a reduction in prices in the SA economy.

The aim of the bill, which was adopted by parliament late in 2018, includes giving the competition authorities and the government more power to tackle high levels of economic concentration. It is also meant to tackle the limited transformation of the economy and the abuse of market power by dominant firms.

“Cosatu strongly supports this progressive, anti-monopoly legislation as it will help open up the economy, ensure greater competition, lower prices and spur badly needed economic growth. Workers are tired of being exploited by monopolies and seeing their meagre wages being squeezed dry by ridiculous prices,” said Tony Ehrenreich, Cosatu’s deputy parliamentary office co-ordinator.

He said the union is not surprised that business was not very forthcoming in the negotiations, “as it would like to see the old regime continuing”.

“The government must act more decisively to end the collusive and concentration practices in the SA economy as many foreign investors are complaining about these practices. We trust that the implementation of the act will transform the economy and fast-track the opening up to fair competition by emerging players. This will significantly contribute to growing the economy and creating jobs, which will make our society more equitable and fair,” said Ehrenreich.

Opposition parties objected to various proposals in the bill, with criticism including that it gives too much power to the economic development minister. Various analysts have also raised concern about the clause on mergers involving foreign companies, saying it would give the government the right to block foreign investment.

According to Rosalind Lake, a director at global law firm Norton Rose Fulbright, the bill is specific about not only small and medium business owned by historically disadvantaged persons  needing protection. 

Said Lake, “It is, however, important to exclude big corporations that are controlled or owned by historically disadvantaged persons in appropriate circumstances to avoid abuse of the provisions. The draft regulations propose that the ‘buyer power’ rules should not apply to suppliers controlled and owned by historically disadvantaged persons that sell a material and significant share of the input to the dominant buyer, which provides them with countervailing power. The possibility of setting a percentage threshold of total sales to the dominant buyer is also being considered.”