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Draft Price Discrimination Regulations Drawn Up

October 10, 2019

Department of Economic Development

10 October 2019

Comment is sought on Draft Price Discrimination Regulations.

The economic development department published the proposed regulations in Government Gazette 42760 in terms of Section 78 of the Competition Act.

Draft Buyer Power Regulations were also published for comment.

The Draft Price Discrimination Regulations seek to give effect to Section 9(1)(a)(ii) of the act and to provide for the benchmarks for determining the application of Section 9(1)(a)(ii) to firms owned and controlled by historically disadvantaged persons.

They also aim to set out the “relevant factors and benchmarks for determining whether a dominant firm’s action is price discrimination that impedes the participation of small and medium businesses and firms controlled or owned by historically disadvantaged persons”.

Detail is provided on elements of price discrimination to be satisfied to establish a contravention, price discrimination, application to firms controlled or owned by historically disadvantaged persons and guidelines.

The proposed regulations apply to firms controlled or owned by historically disadvantaged persons that buy less than 20% of the relevant good or service supplied by the dominant seller.

As regards the Draft Buyer Power Regulations, they are designed to designate the sectors of dominant firms which are prohibited to require from or impose on a supplier unfair prices or other trading conditions; set out the relevant factors and benchmarks for determining whether prices and other trading conditions imposed are unfair; and, in respect of firms owned or controlled by historically disadvantaged persons, set out the benchmarks for determining the firms to which section 8(4) applies.

Issues covered include elements of a contravention, determination of unfair price, determination of unfair trading conditions, designated sectors, application to firms controlled or owned by historically disadvantaged persons and guidelines.

Designated sectors include the grocery retail sector; agro-processing sector and online intermediation services sector.

The draft regulations flow from the Competition Amendment Act signed into law in February 2019.

Comment on the proposed regulations is invited within 28 days of the date of publication of the notice.