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

26 September 2012
Publication Type: Working Paper
JEL Code: D78, K21, L40

The South African Competition Commission’s merger decisions for FY2002 through FY2009 are analyzed to empirically identify the factors historically influencing prohibition, conditional approval and unconditional approval. The key explanatory variables are linked to provisions of the 1998 Competition Act, such that the analysis provides insight into the consistency of merger decisions with respect to the legal requirements specified 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 differing behaviour over the time period, which suggests that the Commission is inconsistent; however, 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. In addition to protecting competition, the Commission is simultaneously protecting other public interests. Therefore, our research supports the hypothesis that the Commission consistently applies its legislative remit.

Working Paper 286
1 May 2012
Journal: South African Journal of Economics
20 June 2013
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