JOHANNESBURG – For decades, South Africa’s competition authorities have focused on a simple, vital mission: keeping markets fair so consumers aren’t ripped off. But with the country mired in a deepening economic crisis characterized by staggering unemployment, gaping inequality, and growth figures that barely register, a growing chorus of economists, policymakers, and business leaders is demanding a radical rethink.
The question being asked in boardrooms, university seminar rooms, and the corridors of Parliament is no longer just “Are prices too high?” but rather, “Can competition policy be a weapon to fight poverty and create jobs?”
South Africa’s economic landscape is dire. The official unemployment rate hovers near 33%, the highest in the world for a country not at war. Among young people, it is catastrophically higher. Inequality, measured by the Gini coefficient, remains the starkest on the planet. Economic growth has stagnated for a decade, struggling to even keep pace with population growth, let alone make a dent in the country’s massive developmental backlogs.
In this context, the traditional remit of competition authorities—preventing price-fixing, stopping abuse of dominance, and vetting mergers for consumer harm—is increasingly seen as necessary but woefully insufficient.
“Competition policy cannot be a silo,” argues economist and policy analyst Lumkile Mondi. “We have a structural economic crisis. We cannot afford to judge a merger or examine market conduct based only on whether it might raise prices by half a percent. We have to ask: Will this create jobs? Will it open opportunities for small and black-owned businesses? Will it help us restructure an economy that is still, in many ways, shaped by its apartheid past?”
The Consumer Welfare Standard: A Blunt Tool
The current framework, largely inherited from Western antitrust traditions, centers on the “consumer welfare standard.” The logic is straightforward: markets should be competitive because competition drives down prices, improves quality, and gives consumers choice. When a merger is proposed, the competition authorities weigh the potential efficiencies against the risk of increased market concentration that could lead to higher prices.
But in an economy where millions of South Africans are too poor to be “consumers” in the traditional sense—where the primary economic challenge is not the price of a luxury good but the total lack of income—this approach can feel disconnected from reality.
“Consumer welfare is important. No one is saying we should allow monopolies to gouge the public,” says Temba Ndlovu, a policy researcher at a Johannesburg-based think tank. “But if a merger consolidates an industry, reduces the number of players, but promises to create two thousand jobs and opens a supply chain for small contractors, should we block it because of a marginal projected price increase? That’s the kind of trade-off we need the courage to consider.”
A Global Shift in Thinking
South Africa is not alone in this debate. Globally, the competition policy orthodoxy is under siege. In the United States, the “New Brandeis” movement has argued that antitrust law was too narrowly focused on prices and allowed a handful of tech giants to accumulate unprecedented power. In Europe, regulators are increasingly scrutinizing mergers for their impact on innovation and data privacy, not just cost.
But for a developing economy like South Africa, the stakes are even higher. The country’s economy remains highly concentrated, a legacy of apartheid-era monopolies that were never fully dismantled. In sectors from food retail to banking to construction, a small number of firms dominate, creating what economists call “choke points” that stifle new entrants and small business growth.
“We have to ask whether our competition tools are fit for purpose in a country trying to achieve transformative, inclusive growth,” says a senior official at the Department of Trade, Industry and Competition, speaking on background. “The Competition Act already has public interest provisions. They are not new. But perhaps we have not used them as boldly or as creatively as we could. Perhaps we need to make them the center of gravity, not an afterthought.”
The Public Interest Provisions: An Underutilized Weapon
The Competition Act of 1998, as amended, does include provisions that allow authorities to consider public interest issues. When assessing mergers, the Competition Commission and Tribunal can weigh the effect on a particular industrial sector or region, on employment, and on the ability of small and black-owned businesses to participate in the economy.
These provisions have been used, most notably in major mergers in the retail and banking sectors, where conditions have been imposed to protect jobs or ensure procurement from small suppliers. But critics argue they are applied inconsistently and often take a back seat to traditional competition analysis.
“We have seen mergers approved with conditions that look good on paper but are poorly monitored and enforced,” says a legal expert specializing in competition law. “A condition to support small suppliers is meaningless if there’s no mechanism to ensure it happens. We need a shift in mindset, from seeing these as add-ons to seeing them as primary objectives.”
The Informal Economy: The Blind Spot
Perhaps the biggest challenge for a reimagined competition policy is the informal economy. The majority of South Africa’s poor do not participate in the formal, regulated economy that competition authorities oversee. They operate spaza shops, sell goods on street corners, or provide services from their homes.
These micro-enterprises are often crushed not by anti-competitive conduct in the traditional sense, but by the sheer power of formal retail chains, complex regulatory barriers, and exclusion from supply chains. A competition policy focused on “consumer welfare” does little for the informal trader who cannot access markets.
“Competition policy needs to look at the entire economic ecosystem,” argues Mondi. “Why can’t a spaza shop owner get goods at the same price as a national supermarket chain? Why are small manufacturers locked out of retail shelves? Those are competition questions, but they are also questions of economic inclusion. We need to connect the dots.”
The Political Will Factor
Any fundamental rethink of competition policy would require political will, legislative changes, and a shift in the culture of the regulatory authorities. It would also face fierce opposition from established corporate interests who benefit from the status quo.
“The incumbents will fight any change that threatens their position,” Ndlovu acknowledges. “They will argue it creates uncertainty, chases away investment, and interferes with markets. But we have to ask: investment for whom? Growth for what? If the current model isn’t delivering for the majority of South Africans, what is the point of protecting it?”
The debate comes at a critical juncture. With the government’s flagging growth plans and fiscal constraints limiting its ability to spend its way out of the crisis, leveraging every available policy lever—including competition regulation—has become an imperative.
The Way Forward
Proponents of reform are not calling for the abandonment of competition principles. They argue for a broader, bolder interpretation that places the structural transformation of the economy at its heart. This could mean:
- More rigorous scrutiny of mergers in concentrated sectors, with a higher bar for approval unless clear public interest benefits are demonstrated.
- Proactive market inquiries into sectors that are gateways for small business, such as retail, food supply chains, and financial services.
- Stronger enforcement of abuse of dominance provisions against firms that use their power to exclude smaller rivals.
- Integrating competition policy with industrial policy, ensuring that market rules support the growth of domestic manufacturing and local procurement.
As the economic crisis deepens, the pressure to make every policy tool count will only intensify. The question is not whether South Africa should have competition regulation, but what it wants that regulation to achieve. In a country fighting for its economic future, the answer can no longer be simply “lower prices.” It must be “a chance for everyone.”
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