The Competition Commission‘s move to block the acquisition of Burger King South Africa by private equity fund, ECP Africa, may have shocked some, viewed as an extreme measure. However, the oversight body was merely enforcing the increased scope of its mandate in accordance with the amended Competition Act, which the Minister of Trade, Industry and Competition, Ebrahim Patel, highlighted during the recent Black Business Council’s Conference. Three changes that have been made to South Africa’s Competition Act, with transformation placed at the centre of competition policy include:
- Measures to address price discrimination against smaller businesses and firms owned by black South Africans;
- New curbs on abuse of power by dominant firms; and
- New powers to the regulators to deal with economic concentration that results in exclusion of black South Africans in the economy.
Thus, blocking of the Burger King transaction has demonstrated that the Competition Commission will not compromise on enforcing its mandate when there is proof beyond reasonable doubt of a transgression. Transformation lobby groups believe the Commission‘s action will deter similar offences in future mergers and acquisition transactions.