Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Wednesday, October 5, 2011

The Consistency of Merger Decisions in a Developing Country: The South African Competition Commission

Posted by D. Daniel Sokol

Richard J. Grimbeek (Department of Economics, University of Pretoria) Sunel Grimbeek (Department of Economics, University of Pretoria) and Steven F. Koch (Department of Economics, University of Pretoria) have posted The Consistency of Merger Decisions in a Developing Country: The South African Competition Commission.

ABSTRACT: Merger decisions made by the South African Competition Commission from April 2002 to March 2010 are analyzed to empirically identify the factors, which have historically in uenced prohibition, conditional approval and unconditional approval. The key explanatory variables are linked to provisions of the 1998 Competition Act, as well as the timing of merger notications, such that the analysis provides insight into the consistency of merger decisions with respect to the legal requirements specied in the Act. Although the legislation includes standard economic concerns, it also includes a provision for advancing public interests and development concerns. Initial results point to diering behaviour over the time period, which suggests that the Commission is inconsistent; however, the majority of those inconsistencies are removed, once additional measures of market contestibility are included in the analysis. The final results suggest that the Commission is less likely to approve mergers that they link to markets that are less contestable. Furthermore, in addition to protecting competition, the Commission is simultaneously protecting other public interests. Therefore, our research supports the hypothesis that the Commission consistantly applies its legislative remit.

http://lawprofessors.typepad.com/antitrustprof_blog/2011/10/the-consistency-of-merger-decisions-in-a-developing-country-the-south-african-competition-commission.html

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