Transplants
How to deal with a Competition Act that has been copied and pasted
Background
In this post, I want to take a step back and think at a more abstract level about the form of competition law that we have on the continent. I will then close by talking about some practical implications.
Typically, you will hear people say that there are two dominant models of competition law: the USA’s model and the European model. You will probably also hear people say that African countries have copied the European model of competition law. In other words, we have ‘transplanted’ European competition law to Africa.
For the most part, this is true.
For context, transplantation in law refers to moving or transferring aspects of a legal regime from one jurisdiction to another.1
We can look at the institutional structure of enforcement, where a specialist agency is responsible for making the decisions and therefore shaping competition law, as opposed to the courts—this is distinctly more European than it is American. And we can also see the emphasis on regional enforcement of competition law, similar to Europe, which we do not see in the United States.
We can also see key terms that have travelled across Europe onto the shores of African competition law. Take, for instance, an ‘undertaking’, which refers to any person involved in the production or provision of goods or services. At least in Nigeria, this understanding of the term did not previously exist in our legal vocabulary, but our competition law is replete with instances of its use in this manner. In my experience, this has led to much confusion, but people tend to (begrudgingly) accept that competition law uses a different language and keep it pushing.
These similarities, among others, to the European regime are then used to argue that competition law on the continent is unfit for purpose because it has not sufficiently been tailored to our context. Much of the evidence for this critique is the fact that we have copied similar terms, concepts, and even legal tests from European competition law—and that is the aspect of transplantation I want to focus on.
Digging deeper than words
It is understandable to see why this is a problem: we want laws that work and are suited for our unique circumstances and predicament.
However, I think focusing on specific language or terms used by a piece of legislation is not the best way to look at the complex matter of transplantation. Not least because the interpretive and fact-intensive legal process is bound to produce different understandings of the same word in two different jurisdictions, or even by two different people within the same jurisdiction.
For instance, during my time at the Federal Competition and Consumer Protection Commission (FCCPC), I worked on an investigation where we spent an excruciating amount of time to define a word in a way that would make it relevant for a unique competition problem that we faced. I cannot get into the details of the investigation, but I can say that we had to argue that the sale of the controlling interest of an ‘oil mining lease’ constituted a merger. In order to do so, we had to understand merger control as a process that reviews transactions which could lead to changes of control over business ventures that could impact competition in a market.
Point here is that Nigeria’s factual circumstances and the need to solve a particular competition problem influenced the FCCPC’s interpretation of what should constitute a merger. And, importantly, that interpretation is now binding on (or will at least influence) subsequent merger control cases in Nigeria. Moreover, other countries will not face these same factual circumstances or competition problems, and so would not have to understand ‘merger’ in a similar way.
Let’s take another example.
From my research into competition regimes on the continent, I have come across the word ‘enterprise’ in other African competition laws, which is used instead of the more commonly used ‘undertaking’ as the unit of analysis in competition law.
For instance, Uganda and Mauritius both use the term ‘enterprise’ and they both broadly use it as a substitute for undertaking in competition analysis. But what is particularly interesting is that Uganda’s Competition Bill (note that it is a Bill and not yet passed) is explicitly not applicable to enterprises that perform a sovereign function on behalf of the Government. Meanwhile, Mauritius’ Competition Act binds the State wherever it engages in any economic activity within a market in Mauritius, so long as that market is open to participation by other enterprises.
Even though both competition laws use the same word, the different regimes have different definitions for the words; definitions which are, arguably, suited to the social, political, and economic contexts of the respective countries.
Ultimately, the overarching point here is that the same legal concept can have different definitions in different contexts, and we must look past surface level copying of words and towards how the authorities in question will seek to interpret and apply legal concepts and terms.
Range of influential factors
From that perspective, we must take into account all the different factors that will influence the interpretation of words, terms, and concepts.
For instance, conferences hosted by foreign competition authorities where issues are debated and, often, a consensus is reached on how an issue should be approached or how legal concepts should be interpreted. Similarly, training and capacity building sessions—perhaps conducted by international organisations or foreign competition authorities—could also be used to directly teach African competition authorities how to understand and apply certain legal concepts and tests.
As a result, African competition authorities might inadvertently rely on foreign cases and decisions as precedents for their actions, even where those cases and decisions might not be well-suited to the African context.
A separate point concerns economic expertise, which occurred to me during a conference last year organised by the IBA and FCCPC in Lagos, Nigeria. Competition analysis inevitably requires economic expertise to supplement legal arguments. While there are not many competition lawyers on the continent, there are even fewer competition economists. As such, many African countries would need to, initially, outsource economic expertise from other countries.
However, the problem here is that economics is not an objective science, like physics or maths.2 It is also constrained by various social, political, and economic factors from the country it originates from. So, economic theories and models created in another jurisdiction might not necessarily apply in an African context. Therefore, we must carefully consider the degree to which we allow foreign economic expertise shape how we understand our competition rules and principles.
Implications
I think this perspective has implications for a range of stakeholders in African competition law.
Competition authorities must be intentional about the various influences, whether direct or indirect, on how they understand and interpret a particular term, concept, or legal test. Also, instead of relying on foreign competition authorities and international organisations for guidance, African competition authorities can engage in capacity building and training workshops for one another.
Lawyers must rely on sources that are cognisant of the African context when seeking to advance a particular interpretation of a term or concept. Lawyers could also use decisions and cases from other African competition authorities and courts as precedent over those from Europe and the United States of America.
Meanwhile, academics must conduct more research on how to better orient African competition laws to our social, economic, and political context. For instance, by creating legal concepts and tests for Africa.
For more on legal transplants, see Michal Gal’s article, “The ‘Cut and Paste’ of Article 82 of the EC Treaty in Israel: Conditions for a Successful Transplant,” available here.
For more on economic theories not being objective, see Ha-Joon Chang’s video, “The Nature of Economics,” available on YouTube (the entire series, Economics for People, is very informative and interesting); and John Searle’s article, “What is an institution?” available here (see only the first few pages).