JURISDICTIONAL OVERLAP OF MERGER REGULATION IN EASTERN AND SOUTHERN REGIONAL ECONOMIC COMMUNITIES OF AFRICA

Abstract

African Regional Economic Communities (RECs) are regional grouping of African states with the purpose to facilitate regional economic integration between members of the individual regions and through wider African Economic Community. Regulating competition within their member states is among the objectives of the RECs. Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern African Development Community (SADC) are among RECs established in Eastern and Southern part of Africa. These RECs are selected for the purpose of this study because they are characterized by membership overlap and recognized by African Union. Regulating merger activities within their member states are their key objectives and they have their own organs for regulations. Merger involves the coming together of two or more business entities to constitute to a single entity and obtaining control over the entity by purchase of its share or assets. Merger activities which have regional dimension shall be regulated by COMESA Competition Commission (CCC) and the power to regulate merger activities among the member states of EAC is given to EAC Competition Authority (EACCA). SADC does not has a regional competition enforcement mechanism, but its members are committed to cooperate in the application of their national competition laws. Membership overlaps are prevalently seen in these RECs. Out of 19 COMESA member states, nine of them are members of SADC. Out of 6 EAC member states, 4 of them are members of COMESA and one is member of SADC. It remains unclear who will exercise primary jurisdiction among EACCA, CCC and SADC Competition Authorities over merger regulations where a membership overlap occurs. This possibly result to forum shopping, conflicting decisions, multiple investigation which leads to administrative inefficiency, duplication of filing, delay in decision making, extra expense, uncertainty and the possibility of conflicting decisions. Ultimately these affect the objective establishment of RECs. To minimize and eventually eliminate the contradictions brought by jurisdictional overlap over merger regulation, they have to establish a system of cooperation which allow for the allocation of cases or referral mechanism among these RECs.