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Competition Commission on Economic Impact of COVID-19

May 21, 2020

Department of Trade, Industry and Competition

An increase in market concentration as firms exit is a likely impact of COVID-19 on the local economy.

The Competition Commission announced this during a briefing on the economic impact of the global pandemic at a virtual meeting in parliament.

Another likely impact was an increase in merger activity on acquisitions of distressed firms or economic sectors.

The Commission highlighted the need to refocus competition regulation as a response to COVID-19.

This includes a focus on lowering market barriers and promoting access to markets for small and medium enterprises and historically disadvantaged individuals, consumer protection against price increases and abuse and exemption applications by distressed industries.

The Commission vowed to, in collaboration with the National Consumer Commission, continue to prioritise COVID-19 cases and refer several more cases for prosecution, including settlements and consent orders with respondent firms.

Merger regulation and/or block exemptions in sectors of the economy which have been severely impacted by the pandemic will be prioritised.

“The Commission will work closely with government and business to provide advice or advocacy regarding specific proposed interventions for economic recovery.”

It is also important that competition policy be prioritised as a key tool towards economic recovery and that coordination with international counterparts be increased.

Meanwhile, in its briefing, the National Consumer Commission (NCC) emphasized that government had a duty to protect consumers from unconscionable, unfair, unreasonable, unjust or otherwise improper trade practices during the national state of disaster.

As a consequence of NCC representations, government published consumer and customer protection regulations in March 2020.

The regulations had an immediate and positive impact in dealing with the concerns of the NCC on behalf of consumers and, so far, only a small number of businesses have not complied.

The NCC also called for “Tribunal rules that would accommodate consumers with no email addresses when they are required to sign off complaint forms and a clear guide on serving of documents without asking for consent”.

It also wants a ‘meeting of minds’ between affected regulators (NCC and provincial Consumer Affairs Offices) when regulations are issued in order to understand what is required of all regulators throughout the country.