Competition Commission’s draft guidelines on small merger notification

10 June 2021
South African Accounting Academy

The guideline enables the Commission to evaluate whether a small merger requires notification on its own merits, within the guidance provided by section 13(3) of the Competition Act.

The guidelines have been introduced to address the Commission’s concerns regarding the increasing acquisitions of new innovative companies by established players, particularly in the digital markets. Due to the general timing of the acquisitions, which often occur at the early stages of a small business’s entry into the market, these acquisitions tend to escape regulatory scrutiny. The concern is that potentially anti-competitive transactions often slip through the cracks in this way as the target firms have not yet generated sufficient turnover to trigger merger notification in terms of the relevant thresholds.

In order to avoid contraventions of the Act and the consequences that follow, parties to small transactions meeting the above criteria need to make submissions to the Commission prior to entering into such transactions.

The deadline for public comments is 21 June 2021.

Click here to download the Guideline:

http://www.compcom.co.za/wp-content/uploads/2021/05/Draft-Guideline-on-small-merger-notification.pdf

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