Category: South Africa

Update on exemptions and block exemptions – Part 2 of the Sugar Master Plan and Ports, Rail and Key Feeder Road Corridors

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By Michael-James Currie, Tyla Lee Coertzen and Astra Christodoulou

The South African Competition Commission (“the Commission”) had a busy year with regard to exemptions and block exemptions. The South African Competition Act 89 of 1998 (as amended) (the “Act”) permits for exemptions to be granted by the Commission in terms of section 10 upon application by a firm. The Commission’s exemption procedure is applicable only to prohibited practices contained in Chapter 2 of the Act in order to permit certain practices that would otherwise be prohibited (such as certain agreements and concerted practices or categories of agreements and practices and rules of trade associations) if it is required to achieve certain identified socio-economic gains.

The Act allows for two ways in which an exemption may be obtained:

  1. Under section 10(3) of the Act, the Commission may exempt an agreement or category of agreements, from Chapter 2 of the Act if the agreement is required for gains in terms of maintaining or promoting exports, the promotion of a small business or firms controlled by historically disadvantaged persons, changing the productive capacity in order to stop a decline in a specific industry, maintaining economic stability in a specific industry and efficiencies that would promote employment or expansion in an industry.
  2. Under section 10(10) of the Act, the Minister of the Department of Trade, Industry and Competition (“DTIC“) (the “Minister”) may, after consultation with the Commission, issue regulations exempting a specific category of agreements or practices, upon issuance of regulations.

Block exemptions regulated by section 10(10) are increasingly being used by firms as a means of effectively responding to economic and industrial challenges on the one hand while ensuring compliance with what is permitted by the Act on the other.

Block exemptions commonly utilise an ‘in scope confirmation’ measure which ensures that any conduct sought to be engaged in with reference to the block exemption is specifically confirmed by the Commission to fall within the bounds of the exemption, in order to ensure legal certainty as well as to ensure that the conduct will not have a negative effect on consumer welfare and the object of the Act.

Two recent notable block exemptions are elaborated on below.

Ports, Rail and Key Feeder Road Corridors

The Ports, Rail and Key Feeder Road Corridors block exemption came into effect by publication in the Government Gazette on 8 May 2025. The focus of this exemption was to allow key players in the logistics sector to collaborate in a manner that is prohibited by the Act. The exemption was set to allow conduct ordinarily prohibited by section 4(1)(a), 4(1)(b)(i) and (ii) as well as 5(1) of the Act.

The exemption is aimed at assisting the logistics industry through the following envisaged outcomes:

  • reduce the costs associated with infrastructural development and improving services for the benefit of consumers;
  • minimise operational losses and increase infrastructural capacity
  • prevent and mitigate the bottleneck effect that is currently faced in the supply chain, caused by inefficiencies in the sector; and
  • support the security of the movement of goods through South Africa.

Importantly, however, while the block exemption allows for collaboration in terms of section 4(1)(b) of the Act (which places per se prohibitions on price fixing, market division and collusive tendering). The regulations expressly prohibits any arrangements between industry players that would result in price fixing, market division and collusive tendering in respect of selling prices of goods and services to customers and consumers. The block exemption also excludes any discussion which would result in the foreclosure of third-party new entrants, small and medium enterprises and firms owned by historically disadvantaged persons, agreements or practices that are in conflict with sectoral legislation or policy, any conduct that would result in resale price maintenance and any merger transaction.

The exemption has been set to operate for the next 15 years (until year 2040). This period can only be extended by the Minister by way of notice in the Government Gazette.

As is prevalent in many block exemptions, prior to engaging in any such arrangement, any relevant firm must first apply to the Commission in writing, confirming that the specific conduct or agreement is covered by the exemption. Following the Commission’s ‘in scope confirmation’ the firm will be in the clear to engage in the agreement or practice.

Sugar Master Plan

On 13 August 2025, Phase 2 of the Sugar Master Plan (the “Plan”) was finalised and published in the Government Gazette by the Minister, which follows from the implementation of Phase 1 of the Plan on [available here], which laid the foundations for stability and growth in the sugar sector.

The creation of the Plan had stemmed from a number of challenges faced in the sugar industry in South Africa. Specifically, the Sugar Master Plan was developed to promote employment in the South African sugar industry, restructure and balance industry capacity and reduce industrial inefficiencies, enhance transformation of the industry by promotion of broad-based participation in the value chain for workers, and historically disadvantaged persons and prevent further players from exiting the market. The Plan had come into fruition through an exemption granted to the South African Sugar Association by the Commission to enable its members to collaborate. Through this exemption, the Plan was born.

The Plan was scheduled to operate on a phased approach, with Phase 1 being focussed on restructuring and establishing a foundation for diversification. Phase 1 commenced in 2020 concluded in March 2023.

Following the conclusion of Phase 1, industry players subsequently approached the Minister to request a block exemption in terms of section 10(10) of the Act to engage in agreements and practices essential for implementing Phase 2.

The block exemption allows for sugar cane farmers and millers to negotiate, within defined parameters, with commercial food and beverage producers, resulting in prioritising local procurement of sugar over imports. It further allows local farmers and millers to negotiate amongst themselves in order to promote growth through diversified products. Similar to the example mentioned above, the block exemption specifically excludes the fixing of selling prices, market allocation, and collusive tendering in respect of goods and services sold to end consumers (prohibited per se by section 4(1)(b) of the Act) as well as resale price maintenance of goods and services sold to end consumers (prohibited by section 5(2) of the Act).

The block exemption, which will operate for a period of 5 years, also includes a mechanism for in scope confirmation by the Commission, ensuring that all arrangements being entered into by industry players is effectively scrutinised by the Commission and confirmed to fall within the parameters of the block exemption.

The block exemption will allow for joint planning, inclusive decision-making, and stability in the sector, protecting thousands of local jobs in KwaZulu-Natal and Mpumalanga. The exemption will help combat imported sugar flooding the market and ease the strain caused by the Health Promotion Levy (“sugar tax”) on the farmers. The Master Plan aims to reduce the total annual losses caused to the industry of roughly R2 billion.

Conclusion

The use of block exemptions granted by the Minister and monitored by the Commission is becoming increasingly prevalent in South Africa and underscores South Africa’s competition law objectives being applied in a manner which allows flexibility to support industrial policy, economic growth and South Africa’s transformation objectives, while ensuring that no practices fall foul of the Act and well-established competition policy.

Michael-James Currie, director at Primerio says, “Block exemptions are likely to remain an important regulatory tool in South Africa and where exemptions are properly utilised, they provide industry players a pragmatic mechanism and legal certainty with regards to engagements with competitors in the pursuance of broader socio-economic objectives.”

To intervene or not to intervene: a twisted tale in Pepkor’s proposed acquisition of Shoprite’s furniture business

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By Michael-James Currie and Joshua Eveleigh

Participation by third parties in merger control proceedings has long been a fundamental aspect of South Africa’s merger control regime. In this regard, section 53(c)(v) of the Competition Act, 89 of 1998 (“Act”) broadly permits that that any person whom the Tribunal has recognized as a “participant” in a merger hearing, may “participate” in that hearing.

The scope of section 53(c)(v), however, has recently been ventilated before the Tribunal, Competition Appeal Court (“CAC”) and the Constitutional Court (i.e., South Africa’s top court) in respect of Lewis Stores (Pty) Ltd’s (“Lewis”) application to intervene in the proposed merger between Pepkor Holdings Limited (“Pepkor”) and Shoprite Holdings Limited (“Shoprite”) (collectively, the “Merging Parties”)(“Proposed Transaction”).

Background

In brief, the Proposed Transaction relates to Pepkor’s acquisition of the furniture business of Shoprite, consisting of OK Furniture and House & Home retail brands, which will subsequently be incorporated into Pepkor’s existing furniture, bedding and plugged goods retail business.

As part of its investigations, the South African Competition Commission (“SACC”) found that the Proposed Transaction would give rise to horizontal overlaps in the supply of:

  • Furniture products; and
  • Bed sets and mattresses.

The SACC also received concerns about the potential effects of the Proposed Transaction from different market participants, including Lewis. Nevertheless, the SACC found that there would continue to be several alternatives within the product markets which would serve as a competitive constraint against the merged entity post-implementation. It was on this basis that the SACC concluded that the Proposed Transaction would not give rise to a substantial lessening or prevention of competition (“SLC”) and recommended that the Proposed Transaction be approved, subject to public interest commitments.

Lewis’s basis for intervening

During the Tribunal’s consideration of the Proposed Transaction, Lewis brought its application to intervene in the Proposed Transaction on the basis that:

  • Shoprite will be removed as a key competitive constraint on Pepkor and, therefore, resulting in a 3-to-2 merger at the national level in relation to the retail of household furniture; and
  • that the Proposed Transaction will likely result in increased provided for low-to-middle-income consumers.

Lewis also submitted that the SACC did not properly consider the effects that the Proposed Transaction would have on different local geographic markets and, concomitantly, whether any SLC would arise within those specific catchment areas.

Accordingly, Lewis argued that in its capacity as the only national furniture retail chain that competes with both Pepkor and Shoprite on a national basis, it has important knowledge and insights into the furniture retail industry which would assist the Tribunal in assessing the Proposed Transaction.

Tribunal’s reasons for permitting Lewis’s intervention

Lewis’s application to intervene was brought in terms of section 53(c)(v) of the Act, read with rule 46 of the Rules for the Conduct of Proceedings in the Competition Tribunal (“Tribunal Rules”).

Tribunal Rule 46(1) provides that any person who has a “material interest” in the relevant matter may apply to intervene in the Tribunal proceedings.

Importantly, the Tribunal nevertheless stated that an intervening party is not entitled to rights that would “displace or supplant” the role of the SACC. Rather, the Tribunal must assess whether the intervening party would be able to assist it in understanding whether the Proposed Transaction gives rise to an SLC or adverse public interest effects.

In this regard, the Tribunal summarized the three-fold test required for a successful intervention application. In this regard, the Tribunal must consider whether the information to be provided by the proposed intervenor:

  • relates to matters within the Tribunal’s jurisdiction;
  • is not already available to the Tribunal; and
  • whether the potential benefits of such assistance outweigh any adverse effects the intervention might have on the speed and resolution of the proceedings.

The Tribunal must also inquire as to whether the intervenor will provide the Tribunal with meaningful assistance for its purposes of assessing the competition and public interest effects of the particular transaction.

In assessing Lewis’s application, the Tribunal found that there are significant and material disputes of fact that have to be ventilated for the Tribunal to understand the relevant market dynamics and that Lewis could assist the Tribunal in this regard.

Accordingly, the Tribunal permitted Lewis as an intervening party on the basis that it demonstrated its ability to provide “significant and material evidence” on the:

  • nature of competition in the market(s);
  • closeness of competition, and
  • characterisation of regional or localised markets.

The Tribunal did, however, limit the scope of Lewis’s intervention rights on the relevant market definitions and whether the Proposed Transaction is likely to lead to an SLC. Lewis was also admitted to assist the Tribunal in respect of potential remedies and/or the imposition of any conditions that might be imposed.

The CAC’s assessment of merger intervention rights

While there were several aspects of the Merging Parties appeal to the CAC, one of the substantive concerns raised was the Tribunal’s supposed outsourcing of the SACC’s functions in merger hearings to Lewis, as an intervenor. This is particularly because the Tribunal granted Lewis with broad powers including: rights to participate in all prehearing conferences; full discovery rights; the right to require the Tribunal to summon people and documents; full participation rights in any and all interlocutory proceedings; the right to adduce evidence and present argument and the right to cross examine any witnesses; the right for Lewis’s legal and economic advisors to access the merger record and all documents filed.

Considering the extensive rights afforded to Lewis, the CAC stated that the scope of rights afforded to Lewis would “retard an expeditious hearing”. The CAC also went on to state that:

“In the light thereof and in the required balancing exercise, this Court must surely take account of these factors together with the possible vested interest of a competitor in the merger proceedings to slow matters down in order to subvert the merger. It must then be satisfied that the contribution which a respondent can bring to the proceedings meets the test laid down by this Court. In particular, that the respondent has shown that it has unique knowledge of the market and can provide evidence in relation to the overall enquiry as to whether a merger should be permitted in order to justify admission.” (own emphasis)

On the latter inquiry, and after a review of Lewis’s affidavits, the CAC found that Lewis had not demonstrated that it was in possession of evidence which would not otherwise be available to the Tribunal after requiring further assistance from the SACC and would assist the Tribunal in understanding the effects of the Proposed Transaction. 

Accordingly, the CAC found that the Tribunal’s reasons for admitting Lewis as an intervenor:

  • did not properly consider to what extent Lewis was likely to assist the Tribunal in circumstances where the information and evidence it was intending to provide could not have been obtained elsewhere; and
  • failed to find a balance between an order which did not undermine the objective of an expeditious resolution of the matter, the interests of the Merging Parties to an expeditious hearing as compared to the value of Lewis’s contribution to the Tribunal.

Importantly, the CAC also confirmed that orders by the Tribunal which relate to applications for intervention are ‘final’ in nature and are subject to appeal.

In sum, the CAC set aside the Tribunal’s order and dismissed Lewis’s application to intervene, stating that:

“It must be emphasised that the approach adopted in this judgment does not represent the end of the road for the respondent. The Tribunal possesses inquisitorial powers. It is more than entitled to summon the respondent to appear before it to provide it with any information and argument relevant to this proposed merger. It also has the power in terms of its inquisitorial powers to require the [SACC] to gather and present additional evidence in relation to the topics which it identified; being market shares, the effects of the merger on specified identified local markets and the role of online sales and economic surveys, demand side analyses of consumer preference. These are matters which clearly represent the kind of investigations that should be undertaken by the [SACC]. It has been alerted to the type of investigations which the Tribunal requires in the reasons provided by the Tribunal. To the extent that the [SACC] or the Tribunal considers that the respondent could be of assistance in this regard it could require the respondent to provide it with further evidence which would be of assistance.”

Further and final appeal to the Constitutional Court

Following the CAC’s order, Lewis approached the Constitutional Court on an urgent basis.

The central tenet of Lewis’s appeal to the Constitutional Court is that the CAC had effectively imposed a new and burdensome threshold for intervention applications for purposes of section 53 of the Act. In brief, Lewis submits that the CAC required that the potential intervenor’s material interest and ability to assist the Tribunal in a proposed transaction was insufficient and that the intervenor must rather demonstrate that its submissions would be “unique” and “could not be obtained elsewhere”. 

Lewis also raised the following key arguments in its appeal to the Constitutional Court:

  • that the CAC’s judgment violated meaningful procedural fairness and constitutional rights; and
  • that the CAC improperly overrode the Tribunal’s specialist discretion, breaching institutional deference.

The Constitutional Court upheld Lewis’s appeal, permitting Lewis to intervene in the Tribunal proceedings, however, its reasons for doing so have not been published at the time of publishing of this article.

Conclusions and Insights

The protracted saga in Lewis’s application to intervene in the Proposed Transaction has raised much debate as to whether intervention by third parties unduly frustrates the finalization of merger hearings in South Africa. It would make little sense, however, for market participants, with direct and substantial knowledge of the potential effects of a particular transaction, from being precluded from participating in merger hearings before the Tribunal. In this regard, ‘rubber stamping’ a contested merger without affording interested parties to ventilate potential competition and/or public interest concerns before the Tribunal may have the consequence of increasing prices, lowering output and quality, foreclosing competitors – all of which the SACC would be hard placed to remediate post-implementation of the merger.

Rather, it should be incumbent on the Tribunal to find a balance between allowing third parties to provide limited assistance to it, on specific disputes of fact, while ensuring that merger hearings do not become extensively protracted.

Draft Amendments to South Africa’s Merger Thresholds and Filing Fees Published for Public Comment

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By Matthew Freer

Introduction

On 27 January 2026, the Minister of Trade, Industry and Competition, Mr Mpho Parks Tau, published a series of draft notices in the Government Gazette proposing significant updates to South Africa’s merger control regime. These include draft amendments to the merger thresholds under section 11 of the Competition Act, 89 of 1998 (the “Act”), as well as a separate draft amendment to the merger filing fees payable to the Competition Commission.

Together, the proposed changes reflect the first inflationary adjustment to South Africa’s merger notification framework in several years and are intended to align regulatory thresholds and fees with prevailing economic conditions.

Draft amendment to merger thresholds

In Government Notice No. 7029, published in Government Gazette No. 54020, the Minister, acting in consultation with the Competition Commission, invited public comment on proposed amendments to the Determination of Merger Thresholds set out in Part A of General Notice 1003 of 2017 (published in Government Notice No. 41124 of 15 September 2017).

The notice is issued in terms of section 11 of the Act and confirms the Minister’s intention to:

  • amend the existing merger thresholds; and
  • make a new determination of merger thresholds as set out in the Schedule to the notice.

Method of calculation remains unchanged

Importantly, the Minister has expressly confirmed that the Method of Calculation remains unchanged. The method set out in Part B of General Notice 1254 of 2017 (published under Government Notice No. 41245 of 10 November 2017) will continue to apply. Turnover and asset values must therefore still be calculated in accordance with International Financial Reporting Standards (“IFRS”), applying the same methods and principles currently used by the Competition Commission.

The Schedule further retains the existing definitional framework, including the definition of a “transferred firm” aligned with section 12 of the Act.

Revised lower (intermediate) merger thresholds

A merger will meet the lower threshold if both of the following requirements are satisfied:

  • The combined annual turnover in, into or from South Africa, or the combined asset value in South Africa, of the acquiring and transferred firms is R1 billion or more (up from R600 million); and
  • The annual turnover or asset value in South Africa of the transferred firm is R175 million or more (up from R100 million).

Revised higher (large) merger thresholds

A merger will meet the higher threshold if both of the following requirements are satisfied:

  • The combined annual turnover in, into or from South Africa, or the combined asset value in South Africa, of the acquiring and transferred firms is R9.5 billion or more (up from R6.6 billion); and
  • The annual turnover or asset value in South Africa of the transferred firm is R280 million or more (up from R190 million).

Merger classification unchanged

The proposed amendments do not alter the categorisation of mergers under the Act:

  • Small mergers fall below either value of the lower threshold;
  • Intermediate mergers meet the lower threshold but fall below the higher threshold; and
  • Large mergers meet or exceed the higher threshold.

Draft amendment to merger filing fees

Published simultaneously, Government Notice No. 7030 in Government Gazette No. 54021 proposes amendments to Rule 10(5) of the Rules for the Conduct of Proceedings in the Competition Commission and inflationary adjustment to the merger filing fees gazetted in General Notice 1336 of 2018 (published in Government Notice No. 42082 of 4 December 2018), dealing specifically with merger filing fees.

This notice is issued in terms of section 21(4) of the Act, in consultation with the Commissioner, and invites public comment on a draft amendment aimed at effecting an inflationary adjustment to merger filing fees. The fees were last updated in 2018 and have remained unchanged since.

Proposed revised merger filing fees

Under the draft amendment to Rule 10(5), the filing fees for merger notifications will increase as follows:

  • Intermediate mergers: from R165,000 to R220,000;
  • Large mergers: from R550,000 to R735,000.

No changes are proposed to the structure or timing of fee payments, only the quantum payable upon filing.

Public participation and next steps

Stakeholders and interested parties are invited to submit written comments on both draft notices within 30 business days of publication. Submissions must be addressed to the Minister of Trade, Industry and Competition, for the attention of Dr Ivan Galodikwe, either by email or by hand delivery to the Department’s offices in Sunnyside, Pretoria.

If finalised, the combined effect of the proposed amendments will be to:

  • reduce the number of transactions requiring mandatory notification; while
  • increasing the cost of filing notifiable intermediate and large mergers.

Together, these measures signal a recalibration of South Africa’s merger control regime to reflect inflation and economic growth, without altering the underlying legal framework or analytical methodology applied by the competition authorities.

Conclusion

John Oxenham, director at Primerio, notes that “the step taken by the DTIC to increase the financial thresholds for purposes of merger regulation in South Africa demonstrates a move towards greater ease in deal negotiation and has been welcomed by the economy. Parties must still, however, note that while the thresholds may indicate fewer notifications being required be submitted with the South African competition authorities, the Commission may require mandatory notification of small mergers (i.e., mergers which do not meet the intermediate thresholds).”

What’s Changing? An overview of the South African Competition Commission’s recent Draft Guidelines

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by Michael-James Currie and Kelly Baker

Pre-merger filing consultation process

The Competition Commission of South Africa (“Commission”) is fundamentally reshaping how it conducts market oversight through a series of new draft guidelines designed to enhance clarity and a more speedy regulatory processes. One of the most significant changes involves introducing a voluntary, informal, and confidential pre-merger consultation. This process aims to simplify the evaluation of complex Phase II and Phase III mergers, enabling parties to address competition concerns or major public interest issues, including HDP ownership or large-scale retrenchments before they are formally filed. By encouraging merging parties or business rescue practitioners to tender appropriate remedies or competitive assessments upfront, the Commission seeks to reduce regulatory costs and accelerate review timelines.

The draft guidelines on the Pre-Merger Consultation Process can be accessed here.

Online intermediation platforms

For the digital economy, the Commission issued a guidance note for online intermediation platforms, shifting its focus from static market shares to “gatekeeper” characteristics. These platforms often benefit from extreme scale economies and powerful network effects, creating a “virtuous cycle” where a high volume of users makes the platform invaluable to businesses, but also creates significant dependency. The Commission identifies several practices that are likely to harm competition, starting with price parity clauses. Wide price parity prevents businesses from offering lower prices on any other platform, while narrow price parity restricts them from pricing lower on their own websites. As a result, both can entrench a leading platform’s position and discourage price competition. Additionally, a lack of interoperability (the ability for different systems to exchange information and work together) can reinforce a platform’s market power by preventing users from mixing services from different providers. Self-preferencing is another red flag, where vertically integrated platforms favour their own products in rankings or charge lower fees to their own affiliates compared to third-party competitors.

Furthermore, the Commission warns against the misuse of non-public, competitively sensitive data belonging to business users to benefit the platform’s own competing offerings. To protect the participation of SMEs and HDP-owned firms, the Commission scrutinises differentiated trading terms, such as charging higher service fees or providing fewer marketing benefits to smaller businesses compared to global corporate entities. Finally, unfair treatment, such as imposing one-sided contracts, transferring disproportionate risks to sellers (like immediate customer reimbursements at the seller’s expense), or lacking clear dispute resolution mechanisms, is identified as conduct that exploits the dependency of smaller business users.

The draft Guidance Note for Online Intermediation Platforms can be accessed here.

Internal restructuring

The Commission’s final Guidelines on Internal Restructuring clarify that transactions occurring within a group of firms generally do not require notification if they are “purely internal”. A transaction is considered purely internal when it has no implications for the control rights of external shareholders – typically minority stakeholders who are not part of the primary group. A formal merger notification may still be required, however, if the restructuring results in a change, loss, or gain of negative control by these external parties. This includes any alteration to veto rights over strategic commercial decisions such as budgets, business plans, or the appointment of senior management. The Commission distinguishes these from ordinary minority investment protections, such as decisions regarding security listings or alterations to share capital, which do not typically confer control.

Ultimately, the Commission assesses these transactions on a case-by-case basis to determine if an alteration in the market structure has occurred.

The Guidelines on Internal Restructuring are accessible here.

Price-cost margin calculation

Lastly, the Commission has standardised the technical assessment of excessive pricing under Section 8(1)(a) through its price-cost margin calculation guidelines. To determine the actual price charged, the Commission adopts International Financial Reporting Standards (“IFRS 15”) revenue recognition principles, accounting for discounts, rebates, and business cycles. Operational costs are accurately classified as fixed, variable, or semi-variable, with a strong preference for actual costs used internally over those contrived for an investigation. The Commission will also scrutinise internal transfer pricing within groups of companies; if an input cost appears artificially inflated, they will prioritise the actual production cost of the entity producing that input. For calculating capital employed, the Commission prefers market values or depreciated replacement costs for tangible assets over simple book values. A “reasonable rate of return” is determined using the Weighted Average Cost of Capital (”WACC”), calculated via the Capital Asset Pricing Model (“CAPM”) to reflect the risk of the specific industry. This rigorous approach ensures that pricing assessments reflect economic reality rather than inflated accounting figures.

The Guidelines on Price-Cost Margin Calculations are accessible here.

South African Competition Tribunal grants absolution in the X-Moor Transport tender collusion case: clarifying the evidentiary threshold for collusive tendering

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By Kelly Baker

Introduction

The South African Competition Tribunal (“Tribunal”) recently handed down its reasons in the X-Moor Transport case, granting absolution from the instance in favour of X-Moor Transport t/a Crossmoor Transport (Pty) Ltd (“Crossmoor”) and dismissing the South African Competition Commission’s (“Commission”) complaint referral at the close of its case.

The Tribunal’s decision, issued on 25 June 2025, provides important guidance on the evidentiary threshold required to establish collusive tendering prohibited under section 4(1)(b) of the South African Competition Act 89 of 1998 (as amended (“Act”), particularly where the Commission relies exclusively on circumstantial evidence and inferences drawn from parallel pricing.

Background to the Complaint

The matter arose from a tender issued in October 2012 by Pikitup SOC Ltd (“Pikitup”) for the supply, operation, and maintenance of plant and equipment at designated landfill sites and depots in Johannesburg. The tender covered a three-year period and closed on 12 November 2012.

During the evaluation process, Pikitup identified several similarities between the tenders submitted by Casalinga Investments CC t/a Waste Rite (“Waste Rite”) and Crossmoor, including:

  1. nearly identical overall bid prices of R350 million and R351 million; [1]
  2. fixed costs that were identical to the cent across multiple line items and years; [2]
  3. tender documents that appeared to have been printed and bound by the same service provider;[3] and
  4. similarities in the manner in which the bids were completed and signed.[4]

Following a forensic investigation by Gobodo Forensic Investigative Accounting, Pikitup referred the matter to the Commission.[5] The Commission subsequently alleged that Waste Rite and Crossmoor had engaged in collusive tendering and price fixing in contravention of sections 4(1)(b)(i) and (iii) of the Act.[6]

Waste Rite settled with the Commission in 2018, admitting liability. Crossmoor did not settle, and the matter proceeded to a contested hearing before the Tribunal in April 2025.

The Commission’s Case

The Commission argued that that the respondents were competitors in the market for waste management and that the similarities between their tenders could only be explained by an agreement to collude.

The Commission called a single witness, Ms Christa Venter, a former Chief Operations Officer of Pikitup and a member of the Bid Adjudication Committee. Ms Venter gave detailed evidence on the tender process and explained why, in her view, it was highly improbable for two independent bidders to arrive at identical fixed pricing across numerous items, given the variability inherent in fuel costs, maintenance, fleet age, tyre usage, operator wages and operating conditions at landfill sites.

Notably, the Commission did not call any witnesses from Waste Rite, despite Waste Rite having settled and undertaken to cooperate with the Commission. Witness statements contained in the record from Waste Rite representatives did not support the Commission’s theory of a bilateral agreement and instead suggested a unilateral copying of Crossmoor’s pricing (i.e., without any bilateral agreement or understanding to price the same).

Application for Absolution from the Instance

At the close of the Commission’s case, Crossmoor applied for absolution from the instance. The Tribunal was then required to determine whether there was evidence upon which it could reasonably find that:

  1. an agreement or concerted practice had been concluded between Crossmoor and Waste Rite; and
  2. the similarities in pricing constituted collusive conduct prohibited by section 4(1)(b).

While acknowledging that the threshold for resisting absolution is low, the Tribunal emphasised that the Commission was nevertheless required to establish a prima facie case on every element of the alleged contravention.

Key Findings

The Tribunal made the following key findings.

No evidence of an agreement

The Tribunal found that the Commission had led no direct evidence of an agreement, arrangement or understanding between Crossmoor and Waste Rite. While the Act defines an “agreement” broadly, it nevertheless requires consensus between firms.

The Tribunal held that identical or near-identical pricing may give rise to suspicion, but it does not, without more, establish that consensus was reached. The Tribunal identified several possible explanations for the similarities, including unilateral copying by one party, and noted that the Commission’s own witness statements undermined the inference of a bilateral agreement.

Importantly, the Tribunal rejected the Commission’s invitation to speculate that cross-examination of Crossmoor’s witnesses might later yield evidence of collusion. Absolution could not be refused on the basis of conjecture or the hope that a case might be made later.

Parallel pricing and “plus factors”

The Tribunal reaffirmed that parallel pricing is not per se unlawful and requires “plus factors” to justify an inference of collusion. While the Commission argued that the similarities in tender presentation and pricing constituted such factors, the Tribunal found that these commonalities were capable of innocent explanation and did not establish conscious parallelism on the part of Crossmoor.

The Tribunal emphasised that while the pricing similarities were unusual, there was no evidence that they were the result of an agreement, and that alone was not enough.

Impact of the Judgement – our insights

The Competition Tribunal granted absolution from the instance in favour of Crossmoor and dismissed the Commission’s case at the close of its evidence. The Tribunal clarified, however, that the Commission was not precluded from instituting the complaint referral afresh should it find new evidence to support its allegations.

The significance of the judgment lies in what it does not do. The Tribunal did not endorse collusive tendering or suggest that identical pricing is permissible. Rather, the decision turns on whether the Commission put forward sufficient evidence to establish a prima facie case of an agreement or concerted practice between the respondents. In the Tribunal’s view, it did not. Despite the striking similarities in pricing, the Commission failed to show that those similarities were the result of consensus rather than unilateral conduct.

The shortcomings in the Commission’s case are evident from the Tribunal’s findings. The Commission relied almost entirely on inference drawn from parallel pricing and common features in the tender submissions, without leading direct or supporting evidence of an agreement. This was compounded by the Commission’s decision not to call witnesses from Waste Rite, despite Waste Rite having settled and undertaken to cooperate. As a result, the Commission was unable to overcome alternative explanations for the pricing similarities or meet even the low threshold required to resist absolution.

John Oxenham, director at Primerio International, describes that ultimately, the Tribunal’s decision underscores the importance of solid evidence in cartel enforcement. While the Commission remains entitled to pursue cases based on circumstantial evidence, this judgment confirms that suspicion, no matter how strong, cannot substitute for proof of agreement. The outcome therefore reflects not a limitation on the Tribunal’s approach to cartel conduct, but rather the consequences of an evidentially weak case.

[1] X-Moor para 9.4.

[2]  X-Moor para 9.4.

[3] X-Moor para 9.3.

[4] X-Moor para 9.5.

[5] X-Moor para 6.

[6] Sections 4(1)(b)(i) and (iii) of the Competition Act 89 of 1998.

Google to pay R688 million to SA Media following Competition Commission Inquiry

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Media and Digital Platforms Market Inquiry Final Report Launch

By Courtney Kaplan

The South African Competition Commission’s Final Report of its Media and Digital Platforms Market Inquiry (“MDPMI Report” or simply “Report”) found that online search is dominated by Google, with news queries making up at least 5-10% of user searches, driving engagement which generates revenue through commercial enquiries. Google uses content from media sites without reimbursement, where artificial intelligence (“AI”) assists in the reduction of referral traffic, and Google’s algorithm prefers foreign media over local media.

Google and YouTube have agreed to pay a fine of approx. $42 million (R688 million) to local media producers following the conclusion of the MDPMI, as they were found to have profited from local news content with no adequate reciprocal compensation. This is done through a reproduction or summary of South African news, resulting in a direct loss of income for South African news publishers.

The payout includes content licensing, innovation grants, and capacity-building initiatives which will be used for newsroom innovation, payments to the Digital News Transformation Fund and financing for language training for the Media Development and Diversity Agency (“MDDA”).   

The Final Report, published in November 2025, comes after 24 months of gathering evidence, holding in-camera and public hearings, expert evidence, discussions with industry stakeholders and an interim report procedure that allowed for opinions from media publishers, broadcasters, the platforms and academia.

The Commission believes that certain online operators restricted fair competition amongst their competitors, which practices have the potential of going against the purpose of the Competition Act 89 of 1998 (the “Competition Act”) which entails promoting and maintaining competition in South Africa.

Reduced audience, inaccurate reporting and social media

The reason for this agreement follows findings that Google takes news content from media sites without providing payment, with publishers receiving less traffic due to AI-summaries. Furthermore, the Competition Commission revealed that Google’s algorithm preferences foreign media sources over local and vernacular outlets.

Daily newspapers’ print sales have dropped by 66% between 2018 and 2023, with the overall decline being 55% when including weekend editions. Print advertising income for three major publishers fell by 38% in 2018, with broadcasters experiencing a 47% decrease since 2016.

Social media is dominated by platforms such as Meta, YouTube, X and TikTok. These platforms upload content generated and/or published by users in order to promote engagement and advertising, which results in most people viewing news through these respective social media platforms. The Commission stated that when platforms such as X and Meta prioritise engagement over providing news links, misinformation is increased as engagement is preferred over reliable news. A limited number of media platforms are recognized for monetisation in relation to content generation and engagement metrics, and many of these monetisation options are not locally available to South Africans.

Advertising revenues

The Report provides that Google holds the largest position in advertising technology by controlling the advertising servers that publishers use to handle and sell online advertising.  This is accomplished by linking publishers to Google’s advertising exchange and by self-preferencing Google’s own systems through access to external bid data.

Google has committed to providing South African advertising companies with extended support Google provides in the EU. This includes greater insight into advertising expenses and remuneration to publishers. Google has also agreed to stop favouring its own platforms over others.

Artificial intelligence

AI corporations have scraped news websites to develop AI models which are used to answer news queries. AI companies now provide South African media with options to opt-out, which will assist in creating and supporting a paid market for news content. AI firms will now offer the same content controls and opt-out options as in the EU, as well as training biannually to encourage the growth of a fair and functioning market for licensed content. Media platforms can choose whether to subscribe to AI tools and/or assistants, but this is often too large an expense for smaller media companies.

Google plans to introduce new user mechanisms that favour local news sources, offer technical support to developing website operations, sharing advanced audience information and statistics, and create an African News Innovation Forum.        

Government recommendations

The Commission’s report suggests that the Department of Trade, Industry and Competition (“DTIC”) provide a block exemption to allow collective bargaining by South African media instead of platform monetisation terms, AI content licensing, advertising technology pricing, and joint advertising sales for community media.

The DTIC was advised to create Regulations that would govern content-moderation in terms of the Electronic Communications and Transactions Act (the “ECTA”). This would involve the introduction of self-regulation frameworks for social media platforms and creating an independent social media ombud to oversee public complaints and moderation practices.

The Report further recommends that the Department of Communications and Digital Technologies (“DCDT”) should create regulations for content moderation of social media in South Africa by utilising the Electronic Communications and Transactions Act (“ECTA”) to provide self-regulation by industry bodies in the social media industry to quality for limited liability and for an Ombudsman regulating the moderation of social media content.

Major milestone

James Hodge, the Competition Commission’s MDPMI chair stated that the report is a landmark move in restoring a balance between digital markets, guarding fair competition, and rebuilding the long-term sustainability of South Africa’s news media.

Behind the Algorithm: NCC challenges E-Commerce Giants on Data, Quality and Compliance

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By Nicole Araujo

The South African National Consumer Commission (“NCC”) recently confirmed its investigation into Shein and Temu regarding certain of the e-commerce giants’ operations in the nation. The NCC’s inquiry will assess whether Temu and Shein are complying with the Consumer Protection Act (“CPA”), with a specific focus on their marketing practices; the safety and quality of products sold; and the accuracy and fairness of their digital-market representations.

Prudence Moilwa, the NCC’s executive head, emphasised that the NCC will undertake a rigorous assessment of their compliance with the CPA, sending a clear message to the e-commerce industry that the NCC will enforce accountability.

The CPA is a strong legislative framework; however, it is increasingly tested by the rapid technological developments that shape e-commerce business models. As innovation progresses faster than regulation, the CPA’s effectiveness is limited in addressing modern consumer protection concerns. The NCC’s intention is not to discourage innovation; however, notes that innovation is expected to take place within the lawful framework. 



Additionally, the NCC has expressed growing concern about Temu’s and Shein’s use of algorithms to drive consumer engagement, particularly in relation to South Africa’s Protection of Personal Information Act. The key issue is the extent to which users are adequately informed about how their data is processed and whether they meaningfully consent to such use. These concerns also relate to the platforms’ data-mining practices and the use of automated systems to determine what consumers see, interact with, and ultimately purchase. In effect, the algorithms employed by these platforms enable highly targeted marketing, which may undermine consumer choice and preference.

Overall, the investigation is a call from the NCC for the e-commerce world to practice basic transparency.

This latest action by the NCC follows closely on the South African Competition Commission (“SACC)’s separate enforcement measures related to tax compliance by Temu and Shein, which focused on alleged under-declaration of customs duties and improper import-tax structures. Together, the two investigations suggest a coordinated tightening of oversight over foreign e-commerce operators entering the South African market at scale.

For more detailed insight into the SACC’s tax enforcement efforts, see our prior article, Trouble in Store: New challenges for Shein and Temu Devotees in South Africa, here.

Govchat v. Meta: How Competition Tribunal Ruling Could Redefine Big Tech Accountability in South Africa

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By Simone dos Santos and Megan Armstrong

GovChat is a civic-tech platform, launched in 2018, that allows South Africans to use WhatsApp to communicate with government departments, apply for grants and report municipal service breakdowns. Conflict arose in 2020 when Meta (the parent company of WhatsApp) attempted to off-load GovChat from WhatsApp, claiming violations of its data and user-protection policies. In 2022, the matter was referred to the Competition Commission, in which GovChat claimed that Meta was engaging in an abuse of dominance. The Competition Commission ruled in favour of GovChat and ordered an interim interdict to stop the proposed off-loading of the platform.

The latest interlocutory hearing at the Competition Tribunal (the “Competition Tribunal Hearing”) began on 1 December 2025, in which Meta was ordered to clarify its e-discovery process. Technology-Assisted Review (TAR) is an innovative AI tool which Meta uses in its e-discoveryprocess. Although the Competition Tribunal did not reject this tool, they demanded human-led transparency. The focus is on who defined the scope of the search, how custodians were selected and whether the process has been adequately documented. Meta complied with the Competition Tribunals request, however, GovChat argued that unless Meta discloses their entire e-discovery process, there is no reliable way to verify that all relevant documentation has been produced. The ruling was adjourned, and Meta has been required to file a comprehensive affidavit of the entire e-discovery process.

On day 2 of the Competition Tribunal Hearing, the focus was on disputes concerning discovery, the need for transparency and the extent to which a dormant company can provide. Meta’s legal representatives argued that GovChat did not fully produce all their documents during discovery and questioned whether their efforts were reasonable. GovChat stated that they are essentially a dormant company, which exists only on the books, but has no assets or documents, and that they have gone beyond the standard requirements of discovery. GovChat argued in response that certain documents could not be produced due to only certain custodians being contacted, and their emails could not be produced due to their email repository being deleted after non-payment. They further highlighted a foundational legal principle in that a sworn discovery affidavit is accepted as true unless deliberate dishonesty has been provided and, therefore, their explanation of the discovery documents must be accepted by the Tribunal. Capital Appreciation (“CA”) is the primary financer for GovChat and Meta had issued summons against CA’s CEO. GovChat argued that the summons was defective in that it does not comply with the procedural requirements and they maintained their position that they had already provided the necessary documents.

The proceedings are still ongoing, and the Tribunal has yet to rule on the discovery and summons application. As the proceedings resume, the Tribunal decisions will not only determine whether the evidence will be admissible but will also reshape how South African Competition Law will treat evidence from Big Tech companies. For civic-tech platforms, the developments will reinforce that access to public digital services such as GovChat should not be determined by a corporate decision.

Competition Exemptions in South Africa: Evolving Tools for Balancing Competition and Public Interest

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By Olivia Höll

A Shifting Landscape in Competition Policy

In South Africa, exemptions under the Competition Act 89 of 1998 (“the Act”) provide a critical mechanism for firms to engage in conduct that might otherwise breach the Act’s prohibitions, where such conduct supports broader policy goals. Exemptions are considered under section 10, with block exemptions specifically authorised under section 10(10). These exemptions aim to promote efficiencies, support government policy, safeguard employment, or advance small businesses and historically disadvantaged individuals.

Since the COVID-19 pandemic, there has been a visible evolution in the types and objectives of exemptions granted by the South African Competition Commission (“SACC”), reflecting South Africa’s shifting economic priorities and ongoing structural challenges.

From Pandemic Emergency to Structural Interventions

The COVID-19 pandemic saw the SACC issue urgent exemptions, such as those for private healthcare providers, banks, retail landlords, and hospitality businesses to enable crisis cooperation. These exemptions were time-bound, tightly monitored, and have since expired. They remain useful precedent for how competition law can be flexibly applied in national emergencies.

However, more recent exemptions illustrate a pivot towards structural or developmental goals. Notable recent examples include:

  1. Ports and Rail Exemption (May 2025)

This exemption directly tackles one of the most significant drags on the South African economy, its dysfunctional logistics system. Chronic inefficiencies at Transnet-owned ports and on the freight rail network have cost the economy billions in lost export revenue. This isn’t merely about allowing cooperation, it’s an explicit attempt to use competition law to solve a market failure.

The exemption encourages private terminal operators (such as those in Durban and Ngqura) and private rail operators to collaborate in ways that would normally be considered anti-competitive (such as coordinating schedules, sharing infrastructure planning data, jointly investing in solutions) to optimise the entire supply chain from mine and factory to port.

This means exporters in sectors like mining and agriculture can anticipate reduced delays and owner spoilage rates, enhancing their global competitiveness. For the operators themselves, it allows for unprecedented cooperation with competitors to optimise the entire supply chain, though they must vigilantly avoid any discussion that veer into product pricing or market allocation, which remain strictly illegal.[1]

  • Sugar Industry Exemption (May 2025)

Functioning as a structured rescue plan formalised through the Sugar Master Plan, this exemption is designed to ensure the survival and transformation of a critically important industry. It permits stakeholders across the value chain, from lager growers to millers, to coordinate on production levels, collectively plan for diversification into biofuels, and present a unified front in negotiations.

For sugar businesses, this means a chance to stabilise the industry and protect livelihoods, particularly for small-scale cane farmers. The practical compliance imperative is stringent, participants must meticulously document that all coordinated activities are for industry restructuring and not for illicit profit-maximisation at the expense of consumers.[2]

  • SMME Block Exemption (January 2025)

This block exemption is a powerful tool for levelling the playing field for Small, Micro and Medium Enterprises (“SMMEs”). It recognises that these players often cannot challenge established market structures alone and allows them to band together to achieve scale.

This means SMMEs can legally form buying groups to negotiate bulk purchase discounts, create joint ventures to bid for large tenders, and collaborate on shared logistics and marketing networks to drastically reduce costs. For larger corporations, this necessitates preparedness to engage with more organised and powerful SMME consortiums. The critical compliance rule is that the exemption only protects qualifying SMMEs, larger firms cannot use an SMME partner as a shield for cartel conduct.[3]

  • Energy and Industrial Exemptions

These exemptions represent a critical tool for addressing broad-based economic constraints, with a particular focus on the ongoing energy crisis and its ripple effects. They provide a collaborative framework for firms within key supply chains and strategic industrial sectors to coordinate in ways that would normally be prohibited.

This could mean manufacturers and suppliers in a critical industry such as steel, chemicals, or automative components being permitted to collaborate on optimising energy usage during load-shedding, sharing logistics for essential inputs, or jointly securing raw materials to ensure continued production and prevent factory closures.

For businesses, this exemption is designed to enhance economic stability and prevent a decline in productive capacity by allowing a degree of crisis management and operational coordination that safeguards entire value chains vital to South Africa’s industrial policy and recovery. The essential compliance imperative is that any cooperation must be directly linked to overcoming the identified supply chain or energy constraints and must not be used as a cover for market division, price-fixing, or other blatantly anti-competitive conduct.[4]

  • Banking and Insurance Exemption (July 2025)

This is a forward-looking exemption that aligns competition policy with national climate goals, acknowledging that financing a ‘just transition’ is a collective action problem. It permits banks and insurers to collaborate on developing common standards, definitions, and data-sharing frameworks for sustainable finance.

This means financial institutions can pool data on climate-related risks and develop a common South African taxonomy for ‘green’ assets without fear of prosecution, which should lead to more available and affordable financing for businesses seeking loans for renewable energy or ESG projects. The crucial limitation is that collaboration is restricted to framework development, any coordination on interest rates, premiums, or customer allocation remains absolutely prohibited.

  • Draft Block Exemption for the Promotion of Exports (August 2025)

In August 2025, the Department of Trade, Industry and Competition published a Draft Block Exemption for the Promotion of Exports. This exemption, still under consultation, seeks to facilitate collaboration among exporters and industry players to overcome structural barriers to accessing foreign markets. It is framed under section 10(10) of the Act and recognises that South Africa’s export competitiveness is often constrained by high logistics costs, fragmented industry structures, and limited bargaining power in international markets.

The exemption is intended to permit cooperative initiatives around joint marketing, shared logistics, standard-setting, and market development, provided that such conduct demonstrably enhances South Africa’s export performance without undermining domestic competition. If finalised, this exemption could become a key instrument to support government’s broader trade and industrial policy agenda, including the drive to increase manufactured exports and deepen regional trade integration under the African Continental Free Trade Area (“AfCFTA”).[5]

Understanding Block Exemptions under Section 10(10)

Section 10 of the Act allows firms to apply to the SACC to exempt them from horizontal agreements typically regulated by section 4 of the Act, or vertical agreements regulated by section 5 of the Act where the agreement contributes towards the following objectives:

  1. maintenance or promotion of exports;
  2. promotion of effective entry, participation in or expansion in the market by small and medium enterprises or firms owned by historically disadvantaged persons;
  3. change in productive capacity necessary to stop decline in an industry;
  4. economic development, growth, transformation or stability of any regulated industry; or
  5. competition and efficiency gains that promote employment or industrial expansion.

The recent SMME Block Exemption echoes earlier block exemptions issued during COVID-19 but represents a shift towards more enduring tools that facilitate inclusive growth. Other possible future candidates for block exemptions include sectors under Master Plans, such as poultry, automotive, and steel, where coordinated action may be needed to meet transformation or industrial policy targets.

Evolving Patterns: Then and Now

While COVID-era exemptions demonstrated the SACC’s agility during crisis management, current exemptions highlight a maturing approach. The SACC increasingly uses exemptions to:

  1. Tackle persistent structural inefficiencies;
  2. Strengthen value chains aligned with industrial policy;
  3. Support small and historically disadvantaged firms; and
  4. Balance economic competitiveness with sustainability and localisation goals.

Risks and Compliance Imperatives

Nonetheless, exemptions remain the exception, not the rule. Historic concerns persist that exemptions, if poorly designed or inadequately monitored, may entrench collusive behaviour or dampen competition. The SACC’s use of clear conditions, sunset clauses, and robust reporting obligations is therefore critical.

Looking Ahead

South Africa’s competition law framework continues to evolve in response to new economic realities. For firms seeking exemptions, the message is clear: any coordination must demonstrably advance the public interest and remain tightly circumscribed within the legal safeguards of the Act.

With the recent wave of block exemptions and sector-specific approvals, businesses, advisors, and stakeholders should actively monitor exemption trends, sector-specific conditions, and the SACC’s enforcement approach ensuring that collaboration serves national priorities without eroding competitive markets in the long term.

[1] Government Gazette No. 52624

[2] Government Gazette No. 52625

[3] Government Gazette No. 52000

[4] Government Gazette No. 52111

[5] Government Gazette No. 53147

The Intersection Of Cost-Of-Living Pressures and South African Competition Law

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By Michael Williams

Introduction

The Competition Commission of South Africa (“the Commission”) released a Cost-of-Living Report (“The Report”) on 4 September 2025, setting out a structured, data-driven assessment of affordability pressures faced by South African households, with particular focus on those low-income consumers predominantly impacted by consistently high inflation rates. Its aim is to provide insights into the affordability of basic goods and services so that individuals, households, businesses, and policymakers can assess financial capacity and understand how price movements affect living standards. This is in alignment with the Presidency’s Strategic Plan that identifies tackling the high cost of living as a priority. 

The current cost-of-living crisis is framed against entrenched domestic challenges, rising food, fuel and electricity prices against the backdrop of an ongoing energy crisis and interest rate increases that have lifted debt servicing costs in an environment where growth in household income has maintained the same pace. 

Background and Goal of the COL Report

The COL Report stems from the Commission’s earlier Essential Food Price Monitoring (“EFPM”) programme, first published in July 2020 to track the prices of staple foods across the value chain, from farm to retail, and to analyse price transmission between producers, processors and retailers. Recognising shifting expenditure patterns and growing inequality, the Commission has expanded the scope of the EFPM, rebranding it as the COL Report. The new format retains essential food price monitoring while including those key non-food items that have a significant impact on lower income households. 

As James Hodge, the chief economist at the Commission said:

“This analysis plays a crucial role in identifying the economic pressures various socio-economic groups, particularly low-income households, experience in a time of fluctuating prices and growing inequality.”[1]

The COL Report’s overarching intent is to highlight the affordability of basic goods and services in South Africa and to identify the underlying drivers of the cost-of-living crisis. 

The COL Report tracks non-food necessities (e.g., electricity, water, rentals, healthcare, minibus taxi fares and petrol, funeral policies, public school fees, and internet usage costs) alongside essential food items such as pilchards, eggs, IQF chicken, brown bread, sunflower oil, maize meal. It further illustrates interest-rate effects by comparing owner’s  rent as an equivalent to bond repayments on a standard mortgage. This structured monitoring enables the Commission to highlight where inflation is concentrated, where pricing appears sticky during cost reductions, and where spreads are widening.

COL Report and South African competition law

While the COL Report does not draw conclusions in respect of anticompetitive conduct, it does have notable implications for competition oversight by continuing to apply the Consumer’s International  Early-Warning System (“Early-Warning System”) and evidentiary baseline for price transmission across essential value chains.[2] Several features are salient for competition law practice and policy, as drawn directly from the Report’s findings and methodology: 

A broadened monitoring mandate across non-food essentials, expands the EFPM’s food focus to include electricity, water, rentals, transport, primary healthcare, funeral policies, education, and internet costs, the Commission positions itself to track persistent inflation drivers where administered pricing or sectoral structures may entrench affordability constraints. Assisting in the prioritisation and policy engagement across markets that shape consumer welfare, even where formal competition enforcement is not immediately implicated. 

It presents clear analytical boundaries that respect competition law standards. It expressly cautions that the analysis of spreads (aggregate spread between retail and producer prices) is not an inference of anticompetitive conduct. Instead, spreads are diagnostic of price transmission and places in the chain where margins are expanding. The Commission’s reliance on the Early-Warning System underscores that the COL Report is an intelligence and monitoring tool, useful for triage and prioritisation, rather than a determinative finding of collusion or abuse. This delineation aligns with competition law’s evidentiary requirements while still highlighting areas that may merit closer scrutiny. 

The Report identifies pricing patterns relevant to oversight, documenting patterns in essential staples where input costs fell or stabilised, but retail prices remained elevated. An example of this is, for instance, the discussion of eggs, sunflower oil, and maize meal, where price stickiness and widening retail margins are observed at various points. In brown bread, producer-level margins rose as wheat prices declined, and retail margins fluctuated as retailers alternated between absorbing and passing through cost movements. Such documented patterns inform areas where the Commission may, in being consistent with its mandate, monitor for potential strategic pricing behaviour over time. 

The contextualisation of administered prices as structural inflation drivers, by the Report identifies evidence that electricity prices rose 68% and water prices rose 50% over the last 5 years. This is well above headline inflation and provides a policy context for sustained consumer-facing cost pressure. Although administered tariffs are not set through ordinary market dynamics, persistent increases affect downstream markets and household welfare, which are central concerns of the Commission’s broader public-interest and competition policy ecosystem. 

The Report recalls that, following the Commission’s Data Services Market Inquiry in 2019, mobile data prices fell significantly in 2020 and 2021 and have remained comparatively stable. This illustrates how evidence-based monitoring and market inquiries can produce effective outcomes, a tool that the Commission may use in other sectors flagged by the COL Report. 

The Report uses an interest rate lens to complement the Consumer Price Index (“CPI”) measures of housing costs, by comparing bond repayments (up 28% over the period 2022 to March 2025) with owner’s equivalent rent, shows how debt-servicing costs meaningfully diverge from CPI’s treatment of owner-occupied housing. This perspective assists competition authorities and policymakers to understand consumer budget constraints that can interact with the market.  

Collectively, these features show that the COL Report is intended to guide monitoring and policy dialogue, highlight potential risk zones, without asserting contraventions and maintain an evidentiary base for any future work within the Commission’s statutory toolkit such as market inquiries.  

Key Findings Highlighted in the Report 

To ground the above effects in the Report’s data, the COL Report records the following notable movements over the past 5 years for the period of 2020 to March 2025:

Key non-food items: 

  • Administered prices: Electricity up 68% and water up 50%, both outpacing headline inflation.[3]
  • Rentals: Actual rentals for houses and flats up 12%, well below headline inflation (28%).[4]
  • Primary healthcare (General Practitioners): Cumulative increase 33%, with the latest 6.6% annual rise noted against slowing general inflation.[5]
  • Transport: Minibus taxi fares increased sharply in mid-2022 following the petrol price spike; fares have been “sticky downwards”, though subsequent increases have trailed CPI, narrowing the gap.[6]
  • Funeral policies: Up 9% over the period, significantly below headline inflation. 
  • Public education: Primary +37% and secondary +42%, both above headline inflation. [7]
  • Internet usage costs: Wireless +1%; wired +14%, with a notable step-up in 2022 linked to certain higher priced fibre offerings.[8]
  • Interest rates vs CPI housing proxy: Bond repayments +28% versus more moderate owner’s equivalent rent growth, illustrating the load from higher interest rates on household budgets.[9]

Essential foods:

  • Pilchards: Retail margins declined over time; early 2025 spreads narrowed to 15% as retailers showed restraint amid rising producer prices.[10]
  • Eggs: Producer prices fell into early 2025 but retail prices were slow to normalise; later producer-price increases reduced retail margins, with the Report monitoring recovery trajectories post-avian flu.[11]
  • IQF chicken: Producer prices stable and retail margins held under 40% in 2025 after earlier pressure. [12]
  • Brown bread: Farm-to-producer spread 77% in 2025 (above historic highs); retail margins fell to 15%, as retailers absorbed later producer increases.[13]
  • Sunflower oil: Producer margins settled around 25% since late 2023; retail margins elevated (40–45%) due to slow pass-through of producer-price declines.[14]
  • Maize meal: Producer margins rose rapidly in late 2023 after white maize price drops; retail prices increased in 2025 despite relatively stable producer prices, pushing retail margins to the high end of historic levels. 

These findings supply concrete price-formation signals, where margins compress, where they expand, and how quickly costs are transmitted, which are central to the Commission’s ongoing monitoring orientation. 

In Conclusion, the COL Report documents a pronounced squeeze on South African households, especially the poorest, driven by elevated inflation in essential services and persistent cost pressures. It demonstrates that while certain categories (e.g., rentals, funeral policies) have increased less than headline inflation, others (e.g., electricity, water, education, and several staple foods) are coming down hard on budgets. In parallel, the COL Report records instances of sticky pricing and widening spreads, and it maintains a clear line between diagnostic monitoring and legal inference. 

For competition law and policy, the COL Report delivers three practical gains, by widening the scope to include key essentials beyond food, showing the spreads and pass through clearly, and a continuation of the Early-Warning System. Furthermore, it assists the Commission in fulfilling its mandate by flagging areas which may need attention, guiding debate on administered prices, and grounding future market work in carefully, publicly sourced data.

[1] https://www.citizen.co.za/business/personal-finance/new-cost-of-living-report-shows-battle-of-being-a-consumer-in-sa/

[2] https://www.consumersinternational.org/what-we-do/good-food-for-all/fair-food-price-monitor/

[3] https://www.nersa.org.za/electricity/pricing.

[4] Statistics South Africa (StatsSA) Consumer Price Index: Sources and Methods. February 2025. Available [Online] https://www.statssa.gov.za/publications/Report-01-41-01/Report-01-41-012025.pdf.

[5] https://iol.co.za/mercury/news/2024-10-08-big-increases-in-sa-medical-aid-fees-causes-alarm/.

[6] https://www.sabcnews.com/sabcnews/taxi-alliance-says-fuel-price-maintenance-costs-contributed-to-latest-fare-hike/.

[7] https://www.moneyweb.co.za/news/south-africa/buckle-up-parents-school-fee-hikes-outpace-inflation/.

[8] Bi-Annual-Tariffs-Analysis-Report-Q2-2022-23- Abridged.pdf

[9] Competition Commission South Africa Cost of Living Report – August 2025, page 17.

[10] Competition Commission South Africa Cost of Living Report – August 2025, page 20.

[11] Competition Commission South Africa Cost of Living Report – August 2025, page 21.

[12] Competition Commission South Africa Cost of Living Report – August 2025, page 22.

[13] Competition Commission South Africa Cost of Living Report – August 2025, page 23.

[14] Competition Commission South Africa Cost of Living Report – August 2025, page 25.