The FXI welcomes the fact that the Department of Trade and Industry is reviewing the maintenance and Promotion of Competition Act No.95 of 1979, and would like to make some comments on the Bill meant to replace this Act. Our particular interests is in its impact on media ownership and control and its provisions with regards to access to information.

1. Nature of problem

It is a well known fact that concentrations of media ownership could impact negatively on the diversity of opinions in society. Conversely, media diversity facilitates democratic decision-making as it allows for the airing a range of diverse views on matters of public interest. Different countries have used a range of legal instruments to create conditions for greater diversity, such as cross-media ownership limitations and limitations on foreign ownership. Competition and anti-trust laws have also been used in this regard.

South Africa is emerging from a history characterised by extreme horizontal and vertical integration of the media: in fact, until quite recently, the print media was dominated by several big groups.

While we are aware of the fact that facilitating greater competition in the media will not automatically lead to diversification, we feel that competitions policy when combined with range of other enabling mechanisms, could assist in creating an environment where media diversity is easier to achieve. One such enabling mechanism is formation of the proposed statutory Media Development Agency (MDA), to facilitate diversity through a range of measures.

In its final report to Deputy President Thabo Mbeki in October 1996, the task group on government communications, COMTASK, noted that there is still a strong legacy of monopolistic control in print media, especially with regards to printing and distribution. We have included this section of the report in this submission as background information (Appendix 1).

We would like to draw the Department's attention to the statement in the report that '...the breaking down of barriers in respect of the national and international media markets has had a strong effect upon the concentration of media ownership in the print media sector, but to achieve a more rapid introduction of a competitive market in this sector, it would be necessary for newspaper ownership to be tested to be tested against revamped competition policy in South Africa'.

We are fully aware of the fact that the Competitions Bill pertains to all sectors of the economy, and therefore needs to be general enough to address monopolistic situations in a range of sectors. However, we would like to think that the Act that is passed could be used for the above purposes, and that media-related cases would not 'fall through the cracks' if they are brought before the Competitions Tribunal. Our comments are directed mainly towards this end. We also consider whether the Bill passes the test of transparency and access to information outlined in open Democracy Bill, which should be passed in this Parliamentary session.

2. Specific suggestion concerning the Bill

1. General comments

The Bill does not include a mechanism for an audit of current concentration and centralisation of sectors. In this respect it is reactive, not proactive in that it relies on complaints brought before it to investigate anti-competitive practices. Also, we believe that it does not give full effect to the words in the preamble 'to provide all South Africans equal opportunity to participate fairly in the national economy'. We note that the Reconstruction and Development Programme (RDP) indicated that 'The new democratic government should establish a commission to review the structure of control and competition in the economy and develop efficient and democratic solutions'.

We would therefore like to see consideration being given to directive to form a structure to ensure an audit of current concentrations is undertaken and assessed.

2. (11) Restricted application of this chapter
6. Restricted application of this part

Because we believe that the threshold in respect of both of these clauses may be set too high for print media-related cases to be considered, given the size of these companies relative to other sectors of the economy, it is suggested that threshold not be a criteria for exemption. In addition many cases of anti-competitive practices take place at regional and local levels ( see hee COMTASK report, Appendix 1). We therefore propose that if the threshold be considered, this provision be made contingent on the investigations cited in 1., and that the threshold could be waived to allow for investigation of prohibited practices on the part of a company whose turnover falls below the threshold. The conditions for waiver would be that it would give effect to 1 (e) and the public interest to be equated with the definition cited in 18 (1) (a), as we believe it to be far too narrow. Moreover, companies which have substantial foreign ownership share should be assessed in terms of the impact the foreign parent company and its profit margin has on the threshold.

3. (45) Filing a complaint

1. a complaint against a prohibited practice by a firm may be initiated by
   • a regulatory authority
   • a person prejudiced by that practice and having a substantial legal interest in obtaining relief from the prohibited practice
2. a person entitled to initiate a complaint may file the complaint with the competition Inspectorate in the prescribed manner.'

We feel that in terms of the current Bill, we would not be able to make a similar representation, as we would not qualify to initiate a complaint. A provision needs to be made for class actions and public interest actions to be brought before the Inspectorate and the Tribunal. We also suspect that the provisions as they stand may be unconstitutional in terms of s.33 and s.34. We would therefore recommend the following: Similarly we would suggest the following amendment:

(54) Right to Participate in Enquiry

'(D) any other person who has material or non-material interest in the enquiry, unless in the opinion of the presiding member of the Tribunal, that interest is adequately represented by another participant.'

given that the Competition Commission will be a government body and it therefore fits the definition of such in the still-to-be-promulgated Open Democracy Bill (ODB), the body should be subject to the Bill's provisions. We are concerned that account has not been taken of this fact, and steps need to be taken to bring the Competitions Bill into line with the provisions of the ODB.

It seems like a great deal of work will be undertaken by the Competition Inspectorate, which also has the task of increasing market transparence, developing public awareness of the provisions of the Act and investigating contravention. The Inspectorate must definitely fall within the ambit of the ODB and only information which could substantially harm an investigation should be exempt and only until such time as an investigation is complete.

Although the ODB does not sufficiently address the issue of the need for private entities to be as transparent and accessible to the public, the FXI believes this is an omission. It has argued in this recent submission on the ODB that the Bill must give effect to the public's right of access to information held by another person, .i.e. ether natural or juristic, the latter being the category into which "firms, as defined in the Competition Bill, fall.

Although the access to privately held information clause in the constitution is based on the need show an antecedent right interest , it is clear to see that it would be easy to establish this interest in terms of the centrality of the consumer or entrepreneur to achieving the objectives of the Competition Bill. In fact, the Bill recognizes the centrality of these groups in its preamble when it aims to 'provide for markets in which consumers have access to, and can freely select, the quality and variety of goods they desire'.

Once this antecedent right interest is established, the whole area surrounding confidential information in relation to "firms" becomes highly debatable, especially what constitutes 'confidential information', which is defined in the Bill as 'trade business or industrial information belonging to a firm which has a particular economic value and which is not generally known or available to others'. This definition is tautological in that one declares information confidential, it automatically becomes confidential without any objective test being applied.

In a paper prepared for us ahead of our submission on the ODB, Gideon Pimstone noted the following with respect to 'confidential information' and corporates :

"Public interest
Grouped under this heading are a wide range of information types which concern an equally wide range of rights. More broadly the category can be denoted as privately-held information that raise substantial disclosure considerations because of the importance of such information in revealing some form of risk to society or the natural environment."

"Confidential information" is referred to in 20 (2) (d), (e) and 53 (3) and (5). With respect to this definition, we propose that a harms test is applied, that involves establishing whether the disclosure of information is likely to result in prejudice to the affected party. This need for non-disclosure should be weighed against a public interest provision.

A constitutional court case established that there are grounds for greater non-disclosure at the investigative stage, when compared to the adjudication stage. We also feel that the rationale for non-disclosure may be confused in the Bill, that it may be weighed in favor of non-disclosure to protect the commercial interests of corporates, rather than in favor of the need to protect the right to administration of justice or the public interest.

We therefore propose that in the instances where the term 'confidential information' appears, a harms test also be applied. However, the principle that the needs for non-disclosure are more compelling at the investigative stage than at the Tribunal stage should be applied.

At the investigative stage, the Inspectorate would make this decision. However, the decision not to disclose information should be subject to review at the Tribunal stage. Arguments to this effect should take place in public, as the real necessity for protecting certain information has to be established.

However, establishing the existence of confidential information does not automatically presuppose closed hearings. The Tribunal may decide to protect this information by other means' In this regards, rules applicable to our high courts especially in terms of fair trials and public hearings must be applicable. The rule of open court must be adhered to so as to avoid any irregularities and abuse of statutory power.

We recommend the following :
53.

(3) Despite subsection (2) the Tribunal member presiding at an enquiry may exclude Members of the public of specific persons or categories of persons from attending the proceedings only for valid and justifiable reasons.

In conclusion, we would like to express a concern with the rigorous search and seizure provisions in the Act. We submit that if there is an acceptance that private entities have a responsibility to be more transparent and to make information in their possession more generally available, these provisions may well be unnecessary.