Lilongwe, Malawi

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Frequently Asked Questions

1. What is the relevant Competition Legislation for enforcing competition in the Common Market?

The COMESA competition law is contained in Chapter VI, Article 55(1) of the Treaty establishing the Common Market for Eastern and Southern Africa (the “COMESA Treaty”) which reads: “The Member States agree that any practice which negates the objective of free and liberalised trade shall be prohibited. To this end, the Member States agree to prohibit any agreement between undertakings or concerted practice which has as its objective or effect the prevention, restriction or distortion of competition within the Common Market.” Article 55(3) of the Treaty mandates the COMESA Council of Ministers to make Regulations to regulate competition within the Member States. As a result, Council made and adapted the COMESA Competition Regulations of 2004 (the “Regulations”) which entered into force in December 2004 upon their publication in the COMESA Official Gazette. The purpose of the Regulations is to promote and encourage competition by preventing restrictive business practices and other restrictions that deter the efficient operation of markets thereby enhancing the welfare of consumers in the Common Market. Apart from limited exclusions, the Regulations have a wide scope of application as they apply to all economic activities whether conducted by private or public persons within, or having an effect within, the Common Market.

2. Which institution has been given the mandate to enforce the regulations?

The enforcer of the legislation is the COMESA Competition Commission (the “Commission”) established under Article 6 of the Regulations. The Commission was launched in December 2008 and is based in Lilongwe, Malawi. The Commission officially commenced operations on 14th January 2013. The Commission is composed of the Secretariat headed by a Director which is responsible for investigation; a Board of Commissioners mandated with adjudicative functions; and the Committee of Initial Determination is part of the Board and it also performs adjudicative functions.

3. What are the investigative Powers of the Commission?

In conducting its investigations, the Commission may in accordance with the applicable provisions of the Regulations and in keeping with the principles of natural justice:

  •  order any person to appear before it to give evidence
  • require the discovery or production of any document or part thereof
  • take any other reasonable action which may be necessary for furtherance of the investigation.

Further, in carrying out the duties assigned to it by the Regulations, the Commission may undertake all necessary investigations into undertakings and association of undertakings. The Commission officials are, to this effect, empowered to:

  • examine the books and other business records;
  • take copies or extracts from books and business records;
  • ask for oral explanations on the spot;
  • enter any premises, land and means of transport of undertakings.
4. What are the investigative powers of the Commission?

In conducting its investigations, the Commission may in accordance with the applicable provisions of the Regulations and in keeping with the principles of natural justice:

  •  order any person to appear before it to give evidence
  • require the discovery or production of any document or part thereof
  • take any other reasonable action which may be necessary in furtherance of the investigation.

Further, in carrying out the duties assigned to it by the Regulations, the Commission may undertake all necessary investigations into undertakings and association of undertakings. The Commission officials are, to this effect, empowered to:

  • examine the books and other business records;
  • take copies or extracts from books and business records;
  • ask for oral explanations on the spot;
  • enter any premises, land and means of transport of undertakings.
5. What Objectives does the Commission pursue in its enforcement activities?

In enforcing the provisions of the Regulations, the Commission pursues the objectives of promoting competition by preventing restrictive business practices and other restrictions that deter the efficient operation of markets, enhancing the welfare of the consumers in the Common Market and protecting consumers against offensive conduct by market actors.

6. With the introduction of the Regulations, how do they interact with the National Competition Laws?

With the commencement of the enforcement of the COMESA Competition Regulations on 14th January 2013 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: these are the national legal orders comprising the respective bodies of legal rules within each of the COMESA Member States.
  2. The Regional Legal Framework: these comprise the body of legal rules created at the COMESA levels such as the COMESA Competition Regulations and Rules.

Given the two legal orders, the national order applies to the enforcement of anti-competitive practices emanating at the national level hence, enforced by the national competition authorities in their respective Member States, whereas the regional framework is invoked generally where there is cross-border impact. The impact of cross-border trade is an 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 the Member States. The Regulations do not apply unless the agreement or conduct has an appreciable effect on trade between the Member States and restricts competition in the Common Market.

7. What is the working relationship between the Commission and the National Competition Authorities of the COMESA member states

The effective enforcement of the Regulations largely depends on an effective working relationship between the Commission and the national competition authorities of the Member States. One of the functions of the Commission under Article 7(d) of the Regulations is to cooperate with competition authorities in Member States. Rule 40 of the COMESA Competition Rules (“the Rules”) outlines the liaison process between the Commission and the competent authorities of the Member States in establishing existence of infringements on applications and notifications and in reaching decisions. The same Rule further stipulates that the competent authorities of the Member States shall have the right to express their views upon the procedure taken by the Commission.

Rule 43 of the Rules also stipulates that the competent authorities of the Member States shall undertake investigations at the request of the Commission and the officials of the Commission may assist the officials of a national competition authority in carrying out their duties. Conversely, under Rule 44 of the Rules, officials of the competent authority of a Member State in whose territory the Commission staff are conducting investigations may at the request of the competent authority or the Commission, assist the officials of the Commission in carrying out their duties.

8. What areas of Competition Law are addressed by the Regulations?

The Regulations apply to all economic activities conducted by private or public persons within, or having an effect within, the Common Market and which have an appreciable effect on trade between the Member States and restrict competition in the Common Market.

The Regulations cover the following major areas:

  • Mergers and other forms of acquisitions where both the acquiring firm and target firm, or either the acquiring firm or target firm, operate in two or more COMESA Member States.
  • Anti-competitive Business Practices include horizontal and vertical agreements, concerted practices and abuse of dominance which have a cross-boarder effect.
  • Consumer protection violations include false or misleading representation and product service standards among others having cross border effects.

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