Background

In 2004, the COMESA Council of Ministers ( “Council”) invoked Article 55(3) of the COMESA Treaty and promulgated the COMESA Competition Regulations of 2004 (“the Regulations”), as a legal framework for the regulation of competition in the Common Market. The Regulations were promulgated in realization that an efficient and integrated Common Market cannot thrive in an environment where firms engage in restrictive business practices which deter the efficient operation of the Common Market. The primary purpose of the Regulations is, therefore, to ensure the efficient operation of the markets with the view to enhancing free and liberalized trade as a prerequisite to safeguarding the welfare of consumers.

The COMESA Competition Commission (“the Commission”) is a regional body established under Article 6 of the Regulations. The Commission’s core mandate is to enforce the provisions of the Regulations with regard to trade between Member States and promote competition within the Common Market through monitoring and investigating anti-competitive practices of undertakings within the Common Market and mediating disputes between Member States concerning anti-competitive conduct.

The Commission became operational on 14th January, 2013 and is based in Lilongwe, Malawi. The Commission enjoys the status of international legal personality and has in the territory of each Member State, the legal capacity required for the performance of its functions under the Treaty. Since the Regulations are now operational, it is the requirement that all cross-boarder transactions be notified for the necessary approval of the Commission.

The Commission is made up of two institutions namely the Board of Commissioners and the Secretariat. The Board of Commissioners is the supreme policy and adjudicating body while the Secretariat is the investigative arm of the Commission responsible for the day to day operations of the Commission.

With the commencement of the enforcement of the Regulations, there are now two separate legal regimes which govern the enforcement of competition law and policy in the COMESA Member States, namely;

  1. The National Competition laws which are the national legal orders comprising the respective bodies of legal rules within each of the COMESA Member States.
  2. The Regional Legal Framework which comprises of the body of legal rules created at COMESA level such as the COMESA Competition Regulations and Rules.

Given the two legal orders, the national order shall apply to the enforcement of anti-competitive practices emanating at national level hence, enforced by the national competition authorities in their respective Member States. In contrast, the regional framework shall be invoked generally where there is a cross border impact. The impact of cross-border trade is implicit prerequisite in light of the wording of Article 3(1) of the Regulations. Consequently, the Commission essentially can only intervene when there is an effect on trade between Member States. The Regulations, more especially Articles 16 and 18, and to some greater extent the Merger Control Regulation, do not apply unless the agreement or conduct has an appreciable effect on trade between Member States and restricts competition in the Common Market.

Contrary to the views expressed by some quarters that the Regulations presents just an additional layer of regulation that companies doing business in the Common Market have to deal with, the scope of application of the Regulations is quite clear that they only apply to cross border transactions which are beyond the jurisdictional scope of national competition laws. For instance, with respect to mergers, it is only those that have a regional dimension and exceed the prescribed threshold that should be notified to the Commission. With regard to restrictive business practices, the Regulations deals with only those agreements and practices which have an appreciable effect on trade between Member States i.e. the Regulations are only triggered where the transaction has cross boarder effect and that effect is appreciable.

One of the notable benefits of the regional competition law regime is that it introduces a “one stop shop” for cross border transactions thereby easing the cost of doing business in the Common Market as such transactions no longer need to be notified in two or more jurisdictions. Unlike the national competition authorities whose jurisdiction is limited by national boundaries, the Commission, in terms of Article 6 of the Regulations has extra-territorial jurisdiction within the Common Market and has the power to investigate cases located in any Member State jurisdiction provided the jurisdictional dimension has been satisfied.