a tripartite report - Unctad
a tripartite report - Unctad
a tripartite report - Unctad
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116 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE<br />
an exclusionary and exploitation nature. 135 Section<br />
16(2) of the Act provides that ‘abuse of a dominant<br />
position’ includes: “(a) imposing, directly or<br />
indirectly, unfair purchase or selling prices or other<br />
unfair trading conditions; (b) limiting or restricting<br />
production, market outlets or market access, investment,<br />
technical development or technological<br />
progress in a manner that affects competition; (c)<br />
applying dissimilar conditions to equivalent transaction<br />
with other trading parties; (d) making the<br />
conclusion of contracts subject to acceptance by<br />
other parties of supplementary conditions which<br />
by their nature or according to commercial usage<br />
have no connection with the subject matter of the<br />
contracts; (e) denying any person access to an essential<br />
facility; (f) charging an excessive price to<br />
the detriment of consumers; or (g) selling goods<br />
below their marginal or variable cost”.<br />
As stated in the Act, the list of abusive practices of<br />
enterprises in dominant positions is not exhaustive.<br />
For example, it does not include a common<br />
exclusionary practice in the Southern African region<br />
of “buying-up a scarce supply of intermediate<br />
goods or resources required by a competitor” 136 .<br />
It is noted that the list of abusive practices in Zambia’s<br />
new Act is somewhat different from the one in<br />
the old Act, indicating that the current list is based<br />
on the practical implementation of the old Act by<br />
the Commission and the changed economic conditions<br />
in the country.<br />
Section 17 of the Act provides for the determination<br />
of relevant product markets within which the<br />
share of supply or acquisition thresholds are to be<br />
met for the authorization of restrictive agreements<br />
(section 14(1)), and for establishing existence of<br />
dominant positions (section 15). In that regard, it<br />
is provided that “the Minister may, on the advice<br />
of the Commission, prescribe the procedure for<br />
determining the relevant product market within<br />
which the share of supply or acquisition thresholds<br />
are to be met under subsection (1) of sections<br />
fourteen and ”.<br />
The determination of relevant markets is critical<br />
-<br />
<br />
in competition analysis since all calculations, assessments,<br />
and judgements about the competitive<br />
implications of any given conduct depend on the<br />
size and shape of the relevant market. -<br />
tion of the relevant market is imperative to establish<br />
the context for the exercise of market power,<br />
and the competitive effect of a restrictive business<br />
practice under investigation. Once the market has<br />
tion<br />
can be examined with a reasonable degree<br />
of accuracy to determine whether it has or would<br />
have an anticompetitive effect.<br />
<br />
comprises a product and geographic dimension.<br />
The product market describes the good or<br />
service that is bought and sold. From a buyer’s<br />
perspective, the product market is determined<br />
from his ability to switch from one product to another<br />
closely substitutable product. The key element<br />
in this market is substitutability of demand.<br />
Demand-side substitution is considered to be the<br />
<br />
market since it refers to the ability of customers to<br />
switch to rival products. The most commonly used<br />
method of assessing demand-side substitution is<br />
the hypothetical monopolist test. The hypothetical<br />
monopolist test asks whether, in response to a<br />
<br />
price ber<br />
of customers would switch to other products<br />
such that the product supplier would not impose<br />
the price increase. If so, the product market must<br />
be expanded to include one or more additional<br />
substitutes. This process continues until a group<br />
<br />
<br />
tions<br />
are also assessed in the determination of relevant<br />
markets, when switching costs are very low<br />
so that producers of close products and services<br />
exercise competitive pressure.<br />
The determination of relevant product markets<br />
is often highly contentious, and cause of litigious<br />
disagreements between competition authorities<br />
and enterprises involved in competition cases as<br />
respondents. The prescription through a Statutory<br />
Instrument under section 17 of the Act therefore<br />
removes unnecessary disagreements on the matter.<br />
In that regard, the Regulations to the Act were<br />
gazette on 19 August 2011 as the Competition<br />
and Consumer Protection (General) Regulations,<br />
2011 (Statutory Instrument No.97 of 2011). Regulation<br />
3 of the Regulations on the determination of<br />
relevant product market provides as follows: