Mauritius Competition Law [Anti-competitive Agreements]

13. Anti-competitive agreements: (1) For the purposes of this Act, and subject to subsection (2), any agreement or part thereof - (a) whereby the parties to the agreement or as a result of which such parties may supply or acquire a substantial share of the market of goods or services of same description; and (b) the object or effect of which is to significantly prevent, restrict or distort competition. shall be considered as an anti-competitive agreement. (2) The Minister may, in the public interest or where he is satisfied that such an agreement is beneficial to the consumers, exempt any agreement from the provisions of this section.

Elements of section 13: (section 13 is poorly drafted)*

(1) Any agreement
(2) resulting in the parties to the agreement supplying or acquiring a substantial share of the market (think it means - any agreement to supply or acquire substantial market share: the question would be: whether this is an agreement to acquire market share)**
(3) object or effect
(4) significantly prevent,* restrict, or distort competition

[agreement + to acquire market share + object or effect + prevent, restrict, or distort] = anticompetitive

Exemptions: I would have preferred the OFT give exemptions; which would be challengeable, and economically based; ie. going through scientific process (based on economics) to arrive at the exemption: rather than an exemption coming from the Minister; although UK's legislation does reserve some powers to SS. However, Exemptions are primarily to be granted by the OFT

EU Law:

Article 81
1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which:

(a)

directly or indirectly fix purchase or selling prices or any other trading conditions;

(b)

limit or control production, markets, technical development, or investment;

(c)

share markets or sources of supply;

(d)

apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e)

make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

2. Any agreements or decisions prohibited pursuant to this article shall be automatically void. 3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:

-

any agreement or category of agreements between undertakings,

-

any decision or category of decisions by associations of undertakings,

-

any concerted practice or category of concerted practices,

which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:

(a)

impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;

(b)

afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

UK Competition Act 1998

The prohibition

2 Agreements etc. preventing, restricting or distorting competition

(1) Subject to section 3, agreements between undertakings, decisions by associations of undertakings or concerted practices which—

(a) may affect trade within the United Kingdom, and

(b) have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom,

are prohibited unless they are exempt in accordance with the provisions of this Part.

(2) Subsection (1) applies, in particular, to agreements, decisions or practices which—

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

(b) limit or control production, markets, technical development or investment;

(c) share markets or sources of supply;

(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

Section 6 allows the Secretary of State to give block exemptions, acting upon a recommendation of the OFT

Section 13(2) Exemptions [serious issues]
This gives the Minister the power to issue exemptions when it is in the public interest or for the benefit of consumers. This sub-section is potentially explosive! It's just waiting to happen. That's an incredible amount of power in the Minister's hand. Does the Minister have to provide any economic evidence for his decision? How will he base his decision? (politically presumably! lo$$yists time) Can he be held accountable - this is an political decision for an economic situation; the Courts won't want to get involved. Can I challenge if I'm affected? It would've preferable if there was something akin to the EC provisions, where an agreement is economically justified if it is exempted or given block exemptions which are decided through an economic + democratic process (block exemptions need to go through the Commission, Council acceptance etc: the competition commission (although this is a political body - it's an antitrust body, which would be tasked with putting out guidelines for how (economically) and why the block exemptions should exist and be applied). It will be intersting to see how public interest and consumer welfare would be defined: this provision could be saved - if the Courts were to strictly enforce and apply - state that the Minister's exemption is void if is not in the public interest or show consumer welfare; they'd have to define the latter too.

Preferably though, something like this would've been better:

Art 81(3): provisions of paragraph 1 may, however, be declared inapplicable in the case of:

-

any agreement or category of agreements between undertakings,

-

any decision or category of decisions by associations of undertakings,

-

any concerted practice or category of concerted practices,

which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:

*Unecessary confusion is created in the language, in s. 13(a) especially. There should be a comma between parties and may. This doesn't really make sense to me, if you read it as "whereby the parties to the agreement ... may supply or acquire a substantial share of .." the word may doesn't belong there, I don't see why it's in there, nor is it easy to see how they've chucked in the word supply in there, appears they were trying to say 'an agreement to supply the market a substantial market share'...?
**defines the type of agreement we are looking for.
***significantly prevent, this could be a contentious issue, the others are more easily discernible.

The Sherman Act 1890
Section 1 of the Sherman Act outlaws "every contract, combination . . . , or conspiracy, in restraint of trade," but long ago, the Supreme Court decided that the Sherman Act prohibits only those contracts or agreements that restrain trade unreasonably. What kinds of agreements are unreasonable is up to the courts.

Section 2 of the Sherman Act makes it unlawful for a company to "monopolize, or attempt to monopolize," trade or commerce. As that law has been interpreted, it is not necessarily illegal for a company to have a monopoly or to try to achieve a monopoly position. The law is violated only if the company tries to maintain or acquire a monopoly position through unreasonable methods. For the courts, a key factor in determining what is unreasonable is whether the practice has a legitimate business justification.