Competition policy is a key instrument to economic development. By successfully implementing competition policy, developed nations have significantly reduced past inefficiencies in their economies. An important aspect of South Africa's transformation over the last decade has been the establishment of a modern competition policy to deal with the country's well-resourced economy.
Consequently, the Competition Act, No. 89 of 1998, governs competition law in South Africa. Subject to a few exceptions, the Competition Act applies to all economic activity within or having an effect within South Africa. The Competition Act regulates mergers, prohibits restrictive vertical practices, restrictive horizontal practices and abuse of dominance. Competition policy in regulated sectors will require confirmation with the sectoral regulators.
The Competition Act seeks to maintain and promote competition in the South African market in order to:
Promote economic efficiency, adaptability and development.
Promote employment and general socio-economic welfare.
Promote a greater spread of ownership within the economy.
Provide consumers with competitive prices and product choices.
Ensure that small businesses have an equitable opportunity to participate in the economy.
Expand opportunities for South African participation in world markets, while recognising the role of foreign competition within South Africa.