Competition authorities are unfairly targeted by various free market fundamentalists - Cosatu

The Competition authorities have been mistakenly and unfairly targeted recently by various free market fundamentalists

These self-appointed critics, masquerading as economic experts, miss the necessity of having properly empowered authorities to regulate and where needed, tackle monopolies and anti-competitive behaviour. 

To simply leave such important matters for the economy, its growth and inclusivity, to the vagaries of the market, is naïve at best and in reality, a dangerous failure to address society’s faultlines. It flies in the face of international experience, where even the most ‘pro-market’ economies, such as the US, have powerful competition authorities.

These critics are mysteriously silent when it comes to the Commission’s many important interventions benefiting millions of workers and consumers, thousands of start-ups and SMMEs, contributing to economic growth and reducing our painful levels of poverty and inequality.  Perhaps these don’t concern the opponents of tackling monopolies and other anti-competitive behaviour. Perhaps they are blind to the abuses and cartel behaviour perpetuated by dominant firms.

The competition authorities have secured impressive victories protecting consumers from price gouging and collusion by shameless service providers.

In 2006 the Commission acted to stop price collusion for bread, a staple food for millions of working and middle-class families.

In 2019 the Data Service Market Inquiry led to data prices being slashed by 50%, 1100 government and public sites being made accessible for free, saving consumers R4 billion in the first year alone.

The Commission intervened during Covid-19 to stop collusion between companies colluding to inflate prices for hand sanitisers, testing kits and other essential PPEs at the criminal risk to millions of lives and livelihoods.

It has intervened to tackle collusion and cartel-like behaviour in the construction industry and among cement producers.  A growing economy cannot afford to have construction and cement subjected to extortion.

Its decisions on school uniforms gave parents greater choices and more affordable options, enabling more businesses to enter this space.

Car owners can now decide where to service their cars and whether to use original parts without voiding their car guarantees.  This has lowered often incredibly exorbitant costs for consumers and opened the sector to small and emerging businesses who were essentially blocked out by the overwhelming dominance and legally imposed franchise monopolies.

A key component of the Competition Commission’s work is approving major mergers.  Its decisions on Coca-Cola as well as Walmart and Massmart scored important victories for their employees with commitments to protect their jobs and enabling them to become shareholders. 

The latter provided an invaluable boost to DTIC’s Employee Shareholder Ownership Programme or worker ownership (ESOPs) which has helped more than 500 000 workers become shareholders in the companies they work for.  This puts money through dividends in workers’ pockets and boosts company morale and productivity.

These merger conditions included firm commitments to support locally produced goods, businesses and value chains.  If this had not been done, we would have missed the opportunity to grow sustainable local production for both domestic and international value chains.

Recently the Commission approved the entry of Canal + with firm commitments to support local languages and locally produced sports, music, shows and movies and thus nurturing our budding entertainment industry.

The critics in their dogmatic hysteria fail to appreciate that the Competition Act provides exemptions when needed to promote economic development or the public interest.

This was used strategically during Covid-19 when government allowed the necessary collaboration by banks, hotels and most critically the healthcare sector as the nation sought to navigate uncharted territories with little time or resources to spare as we sought to save lives and livelihoods.  Extensive work was done through Nedlac between government, business and labour to localise and rapidly produce a wide range of PPEs and medical goods. 

The Competition Act’s 2022 amendments broadened the public interest criteria to be assessed in a merger to more explicitly include transformation including the impact upon SMMEs and those owned by previously disadvantaged persons, and worker ownership,

Whilst no one would say the competition authorities are perfect or could not have done better, no sober person can deny that they have won major victories for workers, consumers, SMMEs and the economy.

In an economy battling deep structural unemployment, the Commission has saved thousands of jobs through agreements to retain and expand employment,  support new and more investment, and commitments to support local products and businesses.

Its support for ESOPs, helped put money in the pockets of half a million workers, Black and White, building a sense of inclusion in those workplaces and providing a path to a better future for their families.  These are critical as we stride to overcome our legacies of systemic discrimination under colonial and apartheid rule.  We cannot leave such matters to naïvely hope the market will take care of that which it never has.

The apartheid regime actively built and supported monopolies as part of buttressing its reign.  The resultant high levels of economic concentration have stifled competition, innovation, consumer choice and the ability of start-ups and SMMEs to enter markets and grow.   It provided a powerful disincentive to attracting investment in an economy badly needing stimulus.

The case for tackling high levels of economic concentration, undynamic markets, monopolies and anti-competitive behaviour is clear as is capacitating the state to nurture local and emerging businesses and sectors and protecting and empowering workers.

All industrialised economies have long grasped this most elementa

ry economic concept.  The African National Congress led government has put in place important foundations and won major victories in this journey.

What is not clear are the motives of these shrill critics.  Is it simply economic illiteracy combined with a dangerously naive belief that let things be and all shall be ok?  Or are some of these critics paid by these very same monopolies intent on intimidating the Commission from fulfilling its constitutional mandate and legal obligations?

We have won important gains for workers and local businesses and value chains; boosting economic growth.  The Commission must be defended and strengthened to do more.

Cosatu President Zingiswa Losi

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

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