The decision last month by the Competition Tribunal to block Vodacom’s acquisition of a co-controlling 30-40% stake in Vumatel parent Maziv has sparked a political war of words.
The Economic Freedom Fighters and the Democratic Alliance, respectively, have lambasted and heaped praise on the decision by trade, industry & competition minister, the ANC’s Parks Tau, to appeal the tribunal’s decision to block the deal. The Competition Commission had earlier recommended to the tribunal that the deal be blocked on competition grounds.
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Tau participated in the tribunal proceedings related to the merger and signalled his support for the transaction on public interest grounds. In his notice of appeal to the competition appeal court last week, Tau said he wants the deal approved. Vodacom and Maziv – which is effectively controlled by Remgro – are also appealing against the tribunal’s decision.
The DA was first to issue a statement on Tau’s move. It praised the minister’s decision to appeal, saying it is important that South Africa show the world that it is open for business.
“This unprecedented move by the minister offers an important opportunity not only to revisit this specific case but also to promote meaningful reform of South Africa’s competition policy more broadly,” said Mlondi Mdluli, the DA’s spokesman on trade, industry & competition.
Mdluli said there is an urgent need to rethink competition law and how competition policy can better serve South Africa’s developmental needs, particularly in fostering investment and expanding critical infrastructure like fibre broadband.
On the political left, the EFF, however, has taken the exact opposite view. It slammed Tau’s decision, accusing him of conspiring to protect the interests of “white capitalist elites”.
Tensions
“This interference is a clear attempt to protect the Rupert family, the interests of the white capitalist elites, and entrench the duopoly of Vodacom and MTN in South Africa’s telecommunications industry,” the EFF said in a statement. Remgro is chaired by billionaire Johann Rupert, who is often a target of those on the left.
Following the tribunal’s decision to block the deal, the Sunday Times this week reported (paywall) that tensions are brewing at the Competition Commission, with employees accusing commissioner Doris Tshepe of poor management, extravagance and pushing rulings – like the Vodacom-Maziv one – that are harmful to the economy.
Read: Big twist in Vodacom, Maziv merger saga
The EFF said media reports like the Sunday Times one are “media coordinated” and “aimed at undermining the Competition Commission’s credibility”. It said they threaten the “very foundation of South Africa’s democracy”.
“The coordinated character assassination of the commissioner of the Competition Commission is a direct attack on South Africa’s democratic values and the gains made since the end of apartheid. By discrediting key independent institutions and their leaders, these actions set a dangerous precedent.”
The EFF argued that the tribunal was right to block the deal on grounds that the merged entity would hold a monopoly in the fibre market. The DA, on the other hand, said the fibre market is unique in that massive investment in infrastructure is required to drive costs down, emphasising the need for “collaborative” investments to accelerate service delivery to “millions of South Africans who are denied the opportunity to participate meaningfully in the digital economy”.
The DA said regulatory transparency needs to be enhanced and that clear, data-driven justifications for the decisions taken by competition authorities must be published to build trust and encourage private sector investment.
The Competition Tribunal is yet to release its reasons document following its decision, which it is required to do within 20 business days of making a ruling. Because the case is complex, the tribunal said furnishing reasons within this deadline “is not practical”. It has not said when the document will be published. – © 2024 NewsCentral Media