The Competition Commission is seeking input from the public on guidelines directing its approach to the analysis of mergers based on public interest grounds, in addition to competition.

Stakeholders had until February 23 to comment on the draft guidelines for the assessment of public interest provisions in merger regulation under the Competition Act, No 89 of 1998.

The process to develop the guidelines emerged as a number of recent key merger cases, in addition to recent Competition Tribunal and Competition Appeal Court decisions amid ongoing stakeholder debate, highlighted the need for an assessment standard for public interest issues.

The draft attempted to identify and approach the various issues of potential mergers, including the impact on productive capacity, competition and imports and exports, as well as small business and industry as a whole.

It also outlined the public interest information required from companies to determine public interest grounds.

“The commission has noted that [the] parties to [the] merger proceedings often provide insufficient information relating to public interest considerations, especially in relation to the proposed merger’s likely effect on employment,” it said in the draft document.

Further, while the nation’s competition regulations provided for the assessment of competition and public interest grounds, it did not guide the commission on how to balance the two issues of competition and public interest when determining the outcome of a merger.

Section 12 A (1)(b) of the Act implied that the Competition Commission must consider the public interest effects of a merger irrespective of their conclusion on the competition test.

The commission also noted that an assessment on the public interest grounds could lead to a prohibition of a merger that was pro-competitive or an approval with conditions of a merger that was pro-competitive. Further, it could lead to the approval of an anticompetitive merger if the public interest benefits from the merger outweighed the negative competition effects.

Conversely, the authorities also needed to consider whether an anticompetitive merger could be approved on the grounds of substantial public interest benefits.