Competition and regulation

Independent Opinion – Market Definition: Infringement and passing-off of the IMPALA trade marks in the name of Impala Platinum Holdings Limited by Impala Warehousing and Logistics Africa (Pty) Limited and Impala Warehousing and Logistics (Spoor & Fisher, 2013): Spoor & Fisher Consulting (Pty) Ltd, representing Impala Warehousing and Logistics Africa (Pty) Ltd at the time, was preparing an Answering Affidavit in response to a Notice of Motion by Impala Platinum Holdings Limited. This matter involved a trademark infringment case brought against Impala Warehousing by Impala Platinum. One leg ot the legal test involved determining the extent to which the product/service offering overlapped. The DNA affidavit found that there was no overlap.

Impact of foreign ownership restrictions in the private security industry: The study was done to estimate the likely costs associated with the implementation of Clause 20(d) of the Private Security Industry Regulation Amendment Bill, 2012, which imposes restrictions on the ownership of private security firms in South Africa by international investors. This research was commissioned by the Security Industry Alliance

Advisory note on a proposed merger: Advisory note on a proposed merger

Construction cartel analysis: In the context of the construction cartel that was uncovered by the Competition Commission of South Africa, DNA Economics was requested to write a report which describes the various options for sanction and the potential methods to quantify the harm to consumers of the contravention.

An assessment of the regulatory burden of the Financial Intelligence Centre Act: In relation to FICA, the National Treasury has called for an independent review of those financial regulations which are most likely to lead to inappropriate costs and unnecessary inefficiencies, which are not justified by associated benefits.

Update of SA-SADC remittance channel: An update of an estimation of the value of remittance flows from South Africa to each of the countries in the Southern African Development Community, which was first undertaken in 2012.

Fresh produce markets (Confidential, South Africa, 2017): A review of competition compliance conditions in fresh produce markets.

Agricultural sector review (Confidential, South Africa, 2017): Conducted a review of the agricultural investment case in South Africa, across the value chain.

Consumer protection, SADC regional automated clearing house (FinMark Trust, SADC, 2017): In order to facilitate regional financial integration and improve cross border payments within the Southern African Development Community (SADC) region, discussions began in 1999 as regards the establishment of a single-currency, cross-border electronic payments system to serve all 15 SADC member states. Under the current setup for intra-SADC cross-border financial transfers, financial service providers move high-value payments across-borders under a Service Level Agreement between the sending and receiving FSPs using the messaging and settlement infrastructure of SIRESS.
The rapid increase in low value cross border credit push transactions in the SADC region requires a more efficient process to decrease per-transaction costs to affordable levels. The SADC Banking Association and SADC Financial Community is now developing suitable payment schemes for retail intra-SADC, which will replace individual FSP agreements with a variety of clearing and settlement operators, with a system where most FSPs hold agreements with the payment scheme, and can thus transact freely with all other FSPs joined to the scheme.
This new financial innovation has great potential to extend access to financial transfer products to consumers in the region, by reducing the costs and increasing the efficiency of cross border transactions. However, care must be taken to ensure that the consumer protection framework for this scheme is appropriate, robust, and implemented timeously, to ensure that consumer interests are safeguarded while not affecting the low per-transaction costs that are the heart of the rationale for the new system. The research provided a recommended consumer protection framework for the scheme, and formed part of the larger design and implementation process.

CCM investigation into private healthcare insurance (APHPA, Mauritius, 2017): A joint DNA-Oxera team undertook economic analysis in support of the Association of Private Health Plans and Administrators (“APHPA”) of Mauritius, as regards the investigation by the Competition Commission of Mauritius (“CCM”) into its “Scale of Costs” practice.

Impact of remittances in Lesotho, Malawi and Zimbabwe (Finmark,South Africa, 2017): A review of the impact of remittances at macro and household level in three SADC economies, namely Malawi, Zimbabwe and Lesotho. The available literature was interrogated to understand the channels by which remittances could affect poverty outcomes. The research included focus groups with remittance senders, interviews with remittance recipients, and statistical analysis of household survey data to determine remittance impact on education in particular.

Consumer protection in SADC(FinMark Trust , South Africa , 2017): Within the Southern African Development Community (SADC), several financial inclusion initiatives have been implemented with the aim of increasing both access to finance, and consumer protection in financial markets. The study developed a consumer protection framework, against which SADC countries are able to measure and compare the effectiveness of their consumer protection policies and regulations. The study provides countries with an independent view of their existing regulatory frameworks; and helps to identify areas of weakness, and actions to be taken to rectify or strengthen them.

State Attorneys/DTI (MFSA - DTI, South Africa, 2017): Undertook economic analysis of the MicroFinance South Africa case on behalf of the Department of Trade and Industry, and provided an expert report.

ABI/SAB Merger (Werksmans/EDD, South Africa, 2017): Provided economic advisory service to the Minister on the ABI/SAB merger, concentrating on identifying possible areas of competitive concern and any mitigating actions.

Consumer protection in SADC: FinMark Trust, SADC, 2016: Within the Southern African Development Community (SADC), several financial inclusion initiatives have been implemented with the aim of increasing both access to finance, and consumer protection in financial markets. Consumer protection legislation and institutional arrangements differ across countries and there is no single or superior arrangement. In the financial services sector, it is generally accepted that general consumer protection measures and consumer education are not sufficient, and that dedicated measures and regulatory institutions are required to address the complexity of the sector. In most SADC Member States, the minimum legislative and institutional requirements for consumer protection are in place. Specifically, all countries have enacted some form of legislation to protect consumers in the financial services sector and ten of the fifteen SADC countries now have a stand-alone consumer protection law.
To enable countries, regulators and financial service providers to assess the adequacy of their existing consumer protection legislation and controls, an excel-based framework was developed as an output of this study. The proposed framework is informed by the G20 high level principles on financial consumer protection and the CGAP Guidelines for Consumer Protection in Low Access Environments; however it has been specifically adapted to account for the findings of this study, and the structure of the financial sector in SADC member states.
The study undertook a situational analysis and country consultation exercise, then developed a consumer protection framework, against which SADC countries are able to measure and compare the effectiveness of their consumer protection policies and regulations. The study provides countries with an independent view of their existing regulatory frameworks; and helps to identify areas of weakness, and actions to be taken to rectify or strengthen them.

Regulatory Impact Assessment: Control of Marketing of Alcoholic Beverages Bill: National Department of Health, South Africa, 2014: An independent regulatory impact assessment of the Control of Marketing of Alcoholic Beverages Bill 2013 for the NDOH, including formulation of policy options and consultation with stakeholders, and a Cochrane-methodology review of the available evidence base.

Health Inquiry: The Health Inquiry, as undertaken by the Competition Commission of South Africa, is a wide-ranging analysis of the competitive standing of the healthcare sector. It includes examination of the interrelationships of various markets in the private healthcare sector, including the contractual relationships and interactions between and within healthcare service providers, the contribution of these dynamics to total private expenditure on healthcare, the nature of competition within and between these markets, and ways in which competition can be promoted. DNA provided extensive analytical support to the Health Inquiry during its research process, on a number of distinct deliverables and topics.

Foskor pricing practices advisory work (Foskor, South Africa, 2014): Advised the client on the competition compliance aspects of pricing practices, and advised a way forward.

Review of Supermarket Investigation Into Exclusive Lease Agreements (Competition Commission, 2013): The Competition Commission requested DNA Economics to review their investigation exclusive lease agreements between shopping centre landlords and supermarkets prior to their referral to the Competition Tribunal. The aim was to test the veracity of their case to see whether it would have stood up in court. The team assessed which section of the Competition Act should apply to specific case studies and the role of risk in efficiency arguments for the development of shopping centres.

Assessment of merger between Pioneer and Pannar (Syngenta, 2012): The assessment involved an understanding of the maize seed market in South Africa, including the technology dynamics behind cross breeding maize seed lines for superior resilience and introgressing artificial biotech traits to boost seed resilience even further. Agricultural dynamics including how this transaction might affect small emerging farmers were considered, and competitive dynamics involving how the merger stifles competition in the maize market in South Africa were analysed.

CBRTA Regulatory Impact Assessment: The Southern Africa Trade Hub (SATH) seeks to increase international competitiveness, intra-regional trade and food security in the Southern Africa Development Community (SADC) region. SATH will realize this through supporting progress on the SADC regional integration agenda and increasing the trade capacity of regional value chains in selected sectors.

Single Transport Economic Regulator (Department of Transport, South Africa, 2012-2015): DNA has been appointed by the Department of Transport to provide a wide range of technical and policy advice in support of the establishment of a new economic regulator to oversee the South African transport sector.

Single Transport Economic Regulator (Department of Transport, South Africa, 2012-)2016): DNA Economics was appointed by the Department of Transport to undertake all of the necessary background research and provide all of the required technical, institutional and legal advice required to scope and implement a new transport economic regulator (and set of regulations).

Regulatory Impact Assessment on Aspects of Namibia’s Road Transport Legislation, Namibia: The Southern Africa Trade Hub (SATH) seeks to increase international competitiveness, intra-regional trade and food security in the Southern Africa Development Community (SADC) region. SATH will realize this through supporting progress on the SADC regional integration agenda and increasing the trade capacity of regional value chains in selected sectors.

Senmin - Cellulose Derivatives merger: Competition Commission, South Africa, 2012: Provided economic analysis and expert witness support to the Competition Commission as regards the Tribunal hearing of the Senmin-Cellulose Derivatives merger.

Actom-Savcio merger: Provided economic expertise to Transnet Rail Engineering in contesting the merger of two of its suppliers, namely Actom and Savcio.

Regulatory impact assessment: Co-operative Amendment Bills (Department of Trade and Industry, 2011): The project comprised an assessment of the likely impact of the Co-operative Amendment Bills 2011, conducted for the Department of Trade and Industry. Analysis concentrated on the proportionality and cost effectiveness of the intended measures.

Review of Regulatory Impact Assessments in South Africa (National Treasury/Chemonics, 2011): As part of a commitment to improving policy and regulatory formation processes, in 2007 the Cabinet decided that regulatory impact assessments (RIAs) should be conducted on South African legislation. The report reviewed success to date in implementing RIA in South Africa, by examining the experience of four case study RIAs, and made suggestions as to the road ahead in continuing to implement RIA.

Consumer protection in financial services in low access environments (FinMark Trust, 2011): Although poorer consumers are often particularly vulnerable to financial abuses, providing protection for such poor consumers can potentially be costly enough to price them out of the market. The research provided a review of theory and practice in balancing these competing objectives in the area of consumer protection in low access financial services environments, such as SADC.

Introduction of Regulatory Impact Assessment techniques in SADC (Southern African Trade Hub, 2011): DNA provided support to the USAID-funded Southern African Trade Hub, in assessing the potential for introducing RIA in the SADC region, including liaising with stakeholders, and identifying targets for pilot RIAs. The project included two specific interventions: training on RIA concepts and methodologies; and the completion of two pilot RIAs in the transport sector, one in Namibia and one in South Africa for the CBRTA.

Regulatory Impact Assessment in SADC: Improving Regional Regulatory Outcomes: The Southern Africa Trade Hub (SATH) seeks to increase international competitiveness, intra-regional trade and food security in the Southern Africa Development Community (SADC) region. SATH will realize this through supporting progress on the SADC regional integration agenda and increasing the trade capacity of regional value chains in selected sectors.

Impact of the Gauteng Freeway Improvement Program (Road Freight Association, 2011): Provided analysis of the likely economic impact of the imposition of proposed toll levels on the roads of the Gauteng Freeway Improvement Program. The analysis included an international comparison of the costs of similar freeway upgrades, and a call for regulatory impact assessment of the total impact of the tolls before proceeding with toll implementation.

Liquor market review (National Liquor Authority, South Africa, 2011): Provided a wide-ranging review of the status of the domestic liquor market, including analysis of competitive conditions; a review of socio-economic drinking patterns; international regulatory comparisons; estimates of the economic benefits of the industry and it socio-economic costs; and a review of the effectiveness of industry alcohol anti-abuse programs. The research was conducted with assistance from the University of Cape Town.

Economic impact of special pricing agreements in electricity for aluminium (Inter-ministerial Committee on Energy, 2010): Eskom provides South African aluminium smelters with special pricing agreements for electricity. The smelters are among Eskom's largest clients, and thus the provision of a large, discounted supply of electricity to them is prima facie of concern from both a security of supply perspective, and an economic efficiency perspective. The study assessed the cost and benefits of the SPAs to the wider economy.

JSE listed chemicals company (South Africa, 2010): Analysis in respect of an allegation of abuse of dominance in chemicals inputs markets

Abuse of dominance complaint (Listed South African telecommunications firm, ongoing): Providing economic analysis in support of a complaint of abuse of dominance in the South African telecommunications sector.

Regulatory impact assessment - Intellectual Property Laws Amendment Bill (Presidency and the STI, 2009): Under subcontract to SBP, provided economic analysis in support of a regulatory impact assessment on the IP Laws Amendment Bill, as requested by Cabinet and commissioned by Presidency.

Economic analysis related to a Competition Commission investigation (Agricultural service firm, 2009): Provided analysis of the economic rationale of certain pricing practices under investigation by the Competition Commission.

Sunset review of an anti-dumping duty (BlueScope steel Australia, 2008): Provided economic analysis in support of Australian steel producer, Blue Scope, during a sunset review of anti-dumping duties imposed on it by the International Trade Administration Commission (ITAC). ITAC has recommended that duties be terminated.

Implementing Benchmarking Better Regulation Framework for NERSA (Allen Consulting Group, 2008 - 2009): Subcontracted to the Allen Consulting Group (Australia) to implement a benchmarking better regulation framework (BBR) for the National Energy Regulator of South Africa.

Economic damages case - paper, pulp & packaging sector (Mondi, 2010): We provided economic analysis to Mondi in a commercial damages case in the packaging sector, which has since been settled. Analysis focused on examining evidence of pricing power and the feasibility of market hypotheses used in claims and counter-claims.

Economic aspects - commercial damages in paper and packaging industry (Large South African listed company, 2008): Advised on the economic aspects of damages litigation, in the South African paper and packaging industry.

Economic analysis - allegation of anti-competition motivation for acquisition (Listed South African ICT firm, 2008): Economic analysis of the prospects for merger intervention on grounds of damage to competition.

Sun International Relocation Application: Gauteng Gambling Board, South Africa, 2014: The Gauteng Gambling Board (“GGB”) requested DNA Economics to review a number of economic reports regarding the Sun International South Africa (“SISA”) relocation application.