A PYMNTS Company

The Increasing Importance Of Broad-Based Black Economic Empowerment (“BBBEE”) In South African Competition Law

 |  May 3, 2022

By: Pieter Steyn (Kluwer Competition Blog)

One of the purposes of the South African Competition Act is stated in the Act to be to “promote a greater spread of ownership, in particular, to increase the ownership stakes of historically disadvantaged persons”. The term “historically disadvantaged persons” (“HDPs”) is effectively defined in the Act as non-white South Africans and firms which are majority-owned and controlled by them.

Amendments to the Competition Act in 2019 included

  • – prohibiting a dominant firm from requiring an unfair trading condition or imposing an unfair price on a supplier controlled by HDPs and operating in a sector designated by the Minister of Trade, Industry and Competition;
  • – specifically prohibiting price discrimination by a dominant firm where this impedes the ability of firms controlled by HDPs to participate effectively in a market;
  • – expanding the public interest test for mergers to include the effect of the merger on the “promotion of a greater spread of ownership, in particular to increase the levels of ownership by historically disadvantaged persons and workers in firms in the market”.

BBBEE is regulated by the Broad-Based Black Economic Empowerment Act and various Codes of Good Practice issued under the Act. BBBEE is focused on ownership by HDPs, the involvement of HDPs in management, procurement from HDPs, the development of suppliers and other firms owned and controlled by HDPs and charitable and other developmental initiatives for the benefit of HDPs…