Competition is a good thing. This is the common thread through global competition law, which aims to prevent monopolies – when one firm dominates a sector.
For instance, if the two most prominent companies in an industry want to merge, a country’s competition authority would likely block the merger. This would be on the grounds that the new entity would reduce competition. Such dominance wouldn’t be good for consumers, as competition usually drives down prices and is good for product quality.
South Africa’s competition law follows the same principles. But it has another unique set of conditions too. South African law says that public interest should also be considered in company mergers or acquisitions. Mergers must consider the impact on employment, small and medium businesses, and ownership by historically disadvantaged persons (those who were discriminated against before 1994).
