a tripartite report - Unctad

ZAMBIA
horizontal and vertical agreements, and for the
share of supply threshold for authorization of such
agreements that are not per se prohibited. In that
regard, section 14(1) provides that:
“Where the parties to –
(a) a horizontal agreement, together supply
or acquire thirty percent or more of goods
or services of any description in a relevant
market in Zambia; or
(b) a vertical agreement, individually supply or
acquire, at either one of the two levels of
the market that are linked by the agreement,
of any description in a relevant market in
Zambia;
the parties shall apply to the Commission for authorization
of the agreement in the prescribed
manner and form.”
The importance of the above provisions, which
are innovative in competition legislation in Southern
Africa, is that it places upon parties to agreements
that are potentially harmful to competition
the onus of notifying the agreements to the
Commission for examination of their competitive
effects, given the fact that the Commission on its
own cannot possibly identify such agreements for
pre-emptive control. The Act therefore makes it
mandatory for enterprises entering into agreements
that meet the set thresholds to notify the
Commission for the assessment of the competitive
effects of the agreements using the rule-of-reason
approach. The enterprises are thus given a chance
to justify the agreements on the market.
However, in noting that section 14 provides that
the respective threshold for horizontal agreements
is 30 per cent or more of goods or services in a
relevant market, and that for vertical agreements
is 15 per cent, the Commission is of the view that
the opposite should be the case because horizontal
agreements are potentially more harmful to
competition than vertical agreements. The Commission’s
view is supported.
It is recommended that section 14 of the
Act be amended to provide that the share
of supply threshold for authorization of
horizontal agreements be 15 per cent or
more, and that for vertical agreements be
30 per cent or more, not vice versa.
115
Abuse of dominant position is prohibited under section
16(1) of the Act. The relevant provisions state
that “an enterprises shall refrain from any act or conduct
if, through abuse or acquisition of a dominant
position of market power, the act or conduct limits
access to markets or otherwise unduly restrains
competition, or has or is likely to have adverse effect
on trade or the economy in general”. The threshold
for establishing the existence of dominant position
has been lowered from the old Act’s 50 per cent of
production or distribution of goods or services in
Zambia, or any substantial part of the country, to
30 per cent in the new Act. The current provisions in
terms of section 15 of the Act state that “a dominant
position exists in relation to the supply of goods or
services in Zambia if: (a) thirty percent or more of
those goods or services are supplied or acquired by
one enterprise; or (b) sixty percent or more of those
goods or services are supplied or acquired by not
more than three enterprises”.
It is noted that the new dominance threshold of 30
per cent is rather low, and goes against the practice
of higher thresholds that has been established
in the region. 132 It is also arguable whether a rebuttable
presumption of dominance would be more
appropriate than a strict threshold. A few competition
legislations in the region do not provide
for a strict dominance threshold 133 , but experience
has shown that this gives the competition authority
too much subjective discretion in determining
dominance, which can be challenged in law
courts. A mixture of a rebuttable presumption of
dominance and a strict threshold, as in South Africa,
seems appropriate.
The lowering of the dominance threshold from 50
per cent to 30 per cent market share under the
Act has however created marked differences with
other Acts of Parliament that regulate the same
enterprises that are regulated by the Act. For example,
the dominance threshold that is prescribed
under the Information and Communication Technologies
Act, 2009 (No.15 of 2009) is still 50 per
cent of market share. 134
It is recommended that the dominance
thresholds in all the Acts of Parliament
that regulate enterprises in Zambia be
harmonized.
in Zambia, as in most other countries, are both of
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