COMESA: Competition Commission

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In summary

The article discusses the implications on merger control in the Common Market for eastern and southern Africa and beyond occasioned by covid-19. The article observes that the conclusion of most mergers is bound to strict statutory time lines to which both competition authorities and merger parties are bound; and that in arriving at a merger determination, competition authorities undertake systematic substantive assessments and investigations and engage various third parties. The article discusses some of the avenues available for both competition authorities and merging parties to ensure that they are on the right side of law as legal violations may still be punishable in the pandemic period. The article also discusses the possible effects on the volumes of mergers and examines on the lessons that can be learned.

Discussion points

  • Procedural and substantive challenges of merger control during and after the pandemic
  • Relaxation of competition laws and amendments to competition laws
  • Invoking principles of force majeure or similar common law defence (supervening impossibility of performance)
  • Impact on the volume of mergers during and post-pandemic period
  • Lessons for the future to be learned by competition authorities and business

Referenced in this article

  • South African case of Hay v. The Divisional Council of King William’s Town
  • COMESA Competition Regulations and Rules
  • COMESA Merger Assessment Guidelines
  • COMESA Competition Commission
  • The US Department of Justice
  • The US Federal Trade Commission


It is widely reported that covid-19 originated in Wuhan, a city in Hubei Province, China, in 2019. At the time the disease was developing and ravaging China, much of the rest of the world was relaxed and considered it a Chinese matter that would be resolved in time and end in China. It appears the world did not learn from the devastating effects of previous pandemics and epidemics, such as the Spanish flu of 1918, the Severe Acute Respiratory Syndrome of 2002 and H1N1 ‘swine flu’ of 2009, inter alia. Covid-19 caught the world off guard and unprepared.

It was just a matter of a time before the disease began spreading like bush fire to the rest of the world and cause unprecedented challenges to both the healthcare systems and economies at a global level. The World Health Organisation (WHO) noted and appreciated the gravity of the problem and raised alarm to the rest of the world on 30 January 2020 by declaring the situation a Public Health Emergency of International Concern. At this stage, the WHO was very calculated in its terminology and held back on declaring the situation a pandemic. Nevertheless, the message was clear; the situation was getting out of hand and nations needed to come together and act collectively and decisively. Alas, countries still did not attach the seriousness such a disease required. The plague continued to inflict unprecedented damage and destruction. By March, WHO observed that the infections outside China were increasing at an alarming rate. Consequently, on 11 March 2020, WHO raised its alarm level by declaring covid-19 a global pandemic.

At this point, the world awoke from slumber as it helplessly watched the damage being inflicted on human beings and national economies. The world was in panic mode and began implementing firefighting measures to contain the situation. These have included lockdowns of varying degrees, with some countries completely closing their borders and having citizens confined to their homes. While these measures helped to curb the spread of the disease, they have had side-effects. There have already been serious implications for the global economy and the corporate world has suffered significant financial and economic distress. The measures have also resulted in legal consequences regarding contracts and compliance with public laws, such as timelines under certain statutes.

It is also important that as countries ponder on how to contain the spread of the virus, their actions should be within the law and they should not resort to draconian actions tainted with illegality. Similarly, undertakings should ensure that whatever actions they undertake during this period are within the confines of the law. It may not always be easy for governments and businesses alike to remain on the right side of the law during devastating times like these and the enforcement of many laws present fundamental practical challenges. Competition law enforcement has not been spared and several challenges have already been witnessed in that field.

This article discusses how covid-19 has affected competition law enforcement in the area of mergers and acquisitions. The focus is on the Common Market for Eastern and Southern Africa (COMESA). However, the article is not restricted to COMESA and will in many instances discuss the matter beyond COMESA.

Implications for merger control

There is incontrovertible evidence that merger control is critical to the proper and efficient functioning of markets. It is therefore important that the merger control processes remain operational even in these difficult and uncertain times to avoid long-lasting structural damage to markets that may have a negative effect on the optimal functioning of economies as a whole and erode consumer welfare. The covid-19 pandemic is having a significant effect on merger control the world over. Competition agencies in most jurisdictions have significantly scaled down their operations and in some instances are putting in place instruments or measures to delay merger filings so that their workloads are manageable during this period. In fact, some key US lawmakers have begun advocating for a moratorium on mergers until the coronavirus pandemic ends. The proposal attempts to ensure that large companies do not wipe out competition from smaller rivals already hit hard by the pandemic.1

In COMESA, the supranational authority responsible for merger control is the COMESA Competition Commission (the Commission). The Commission’s merger control processes are provided for under the COMESA Competition Regulations (the Regulations), the COMESA Competition Rules (the Rules), which are binding law, and the COMESA Merger Assessment Guidelines (the Guidelines). The timelines under which the Commission is required to operate have not been altered. Nevertheless, the Commission is very cognisant that the challenges brought about by covid-19 could have a substantial effect on its merger control processes. One option available to the Commission to ameliorate these challenges is to relax the application of the Regulations within the scope of its remit, otherwise it risks having its actions ultra vires. As an example, the Commission has strict deadlines within which merger notifications should be made after the parties have reached a decision to merge. Article 24(1) of the Regulations provides that:

A party to a notifiable merger shall notify the Commission in writing of the proposed merger as soon as it is practicable but in no event later than 30 days of the parties’ decision to merge.

This provision has been presenting challenges to the merging parties, with many countries in lockdown and people compelled to work from home. It may not be easy to gather all the information needed to conclude a merger notification within the tight deadlines imposed by law. Further, the Regulations under articles 24(2) and 24(5) impose strict penalties with dire consequences for failure to notify the merger within 30 days. The Regulations render such a merger illegal, such that it would have no legal effect and no rights or obligations imposed on the participating parties by any agreement in respect of the merger shall be legally enforceable in the Common Market.2 Further, the parties may be liable to a penalty not exceeding 10 per cent of either or both of the merging parties’ annual turnover in the Common Market as reflected in the accounts of any party concerned for the preceding financial year. This situation presents a serious challenge as the Commission has no power under the Regulations, or any other law for that matter, to waive the application of article 24(1), or the penalties under articles 24(2) and 24(5). The solution appears at this stage only to rely on the expansive interpretation of the law. The Commission has already issued a Notice on its website3 that it will consider any engagement with the parties on a proposed merger as the beginning of the notification process, which will be deemed complete upon submission of all the information. It is therefore unlikely that the Commission would penalise any undertaking for failure to submit all the information within 30 days after deciding to merge.

However, the Commission and the parties may not always have the good fortune to find a provision like article 24(1), which may be interpreted widely to address the challenge at hand. Other provisions in the Regulations and the Rules may simply require amendment or promulgation of an overriding statute or legal provision to address the situation. One such provision is rule 55 of the COMESA Competition Rules pursuant to which the COMESA Merger Notification Form 12 is created. Form 12 provides that:

Notifications must be made either by email to the Commission’s prescribed email address attaching or otherwise providing effective electronic access to Form 12 and all supporting documents in PDF format and including the email addresses of each party comprising the notifying party or submitting an electronic version of the Form 12 and all supporting documents in PDF form on CD or DVD-ROM. The notification will be deemed submitted upon receipt of such email or CD or DVD by the Commission. One hard copy of Form 12 and all supporting documents should be sent to the Commission within seven days thereafter.

This provision also imposes strict time requirements during the covid-19 pandemic. It mandates parties to submit hard copies of the filing within seven days of making an electronic filing. During this period, firms are encountering difficulties in complying with these statutory timelines because of staff availability and difficulties in transporting both cargo and persons owing to the grounding of flights, including those used by courier companies. Therefore, it is very likely that firms may find themselves inadvertently breaching this provision. Without any express overriding legal provision, the Commission cannot simply waive this requirement without committing an illegality itself. The only solution is for the parties to find an ingenious way of getting around the legal requirement while staying within the province of the law. One way is for the parties to delay the electronic filing until they are sure that the Commission has received the hard copy filing. Obviously, this will have the effect of slowing down the closure of the transaction and result in the slowing of the global economy, as mergers are one form of corporate finance and investment. However, this may be the inescapable consequence of the pandemic and the need to stay on the right side of the law.

Another worrying provision as regards statutory timelines is article 25 (1) of the Regulations, which provides that:

The Commission shall examine a merger as soon as the notification is received and must make a decision on the notification within 120 days after receiving the notification.

The Regulations impose strict deadlines on the Commission as well with regard to the time frame within which it should make a determination on the notified merger. However, strict compliance with this 120-day period will be challenging. The Commission remains resolute to ensure that transactions are determined upon within the shortest possible time, given that merger control is critical to the efficient functioning of markets and imperative to the attainment of the COMESA Treaty single market. The covid-19 pandemic, however, has distorted the efficiency with which the Commission can expeditiously conclude investigations on a merger. This is because the measures put in place by several member states’ governments and others are making it difficult to obtain third-party information that the Commission requires to undertake its investigations. For example, article 26(6) of the Regulations obliges the Commission to take all reasonable steps to notify all the relevant member states. The respective Notice shall include the nature of the proposed inquiry and should call upon any interested persons who wish to submit written representations to the Commission in regard to the subject matter of the proposed inquiry. The purpose of these inquiries is for the Commission to obtain as much information as possible on the merger so that it is able to arrive at a sound and accurate determination. However, most national competition authorities who are a critical stakeholder have had a significant proportion of their workforce asked to work from home, making the turnaround period very slow. Similarly, the Commission also solicits critical information from the consumers and competitors of the merging parties. This information may now take a long time to come forth as stakeholders find it difficult to collect the information in the wake of lockdowns.

Therefore, two imminent risks are observed. The first is that the Commission may proceed to making a determination on a transaction on the basis of the information available. However, this may prove disastrous in the long run as the Commission risks rejecting pro-competitive mergers or authorising anticompetitive mergers because of insufficient information. The Commission may not want to err on this side, and may consider exhausting all 120 days to acquire meaningful information. The question that may arise is what would happen after expiry of the 120 days if the Commission has not made a determination on a merger? Herewith lies the second risk. The answer is to be found in section 6.17 of the Guidelines, which provides that if the Commission has failed to issue a decision to the notifying party, then it will be deemed that the Commission does not object to the merger. This would be subject to the 30-day cumulative extension that would have been made under section 6.3 of the Guidelines, which provides that:

Pursuant to Article 25(2) of the Regulations, the Commission may extend the periods of Phase 1 and Phase 2 with the approval of the Board so long as all such extensions do not cumulatively exceed 30 days. The Commission will provide prior notice of an extension to the notifying party.

Section 6.3 of the Guidelines, read with article 25(1) of the Regulations, implies that in any situation, the Commission’s review period should not exceed 150 days. Where this is the case, the merger is considered approved automatically. This outcome would be incompatible with the objective of merger control, especially that it would have been occasioned by factors outside the control of the Commission. The Guidelines were promulgated to guide the parties on the thinking of the Commission with regard to proposed mergers under normal circumstances and in normal times. Further, the Guidelines ensure that the Commission operates efficiently in the review of mergers by avoiding delays caused by procrastination, given that mergers are a business phenomenon and therefore sensitive to time: the Guidelines did not envisage calamities like covid-19. Thankfully, the Guidelines are not binding law and the Commission may elect to dispense with this requirement and continue to assess the merger even after expiry of the 120-day period and the necessary extensions under section 6.3 of the Guidelines. Such an outcome would be sad from the parties’ point of view but, overall, it would be better to preserve competitive market structures by investigating the merger conscientiously than being limited by the time factor and arriving at a wrong determination with irreversible damage on markets and the economies at large. Nevertheless, competition authorities should not blatantly depart from their own guidelines unless under sparing and exceptional circumstances, and covid-19 may present such a circumstance. But how then would the Commission go beyond the 120 days with the necessary extensions under section 6.3 of the Guidelines and still remain within the ambit of the law? The answer lies in article 25(2) of the Regulations, which provides that:

If prior to the expiry of the 120-day period provided for in paragraph (1) the Commission has decided that a longer period is necessary, it shall so inform the parties and seek an extension from the Board.

The literal reading of the above provision suggests that the Commission can actually extend as long as it wishes the period for investigations until it is satisfied that it has all the information required for making a determination. Such a provision should not be used casually, however, and the Commission is expected to be reasonable in its application. The Commission has so far not invoked article 25(2) on the extension of timelines. The Commission does not envisage invoking this provision though it is foreseeable where the situation permits.

In jurisdictions such as Australia, the United Kingdom and Mauritius,4 whose merger control regimes are voluntary, parties may elect to proceed with a merger in the hope that should competition authorities review those transactions post-merger and post-pandemic, they would be compatible with the respective competition laws. The risk here is that the parties may find themselves in a situation where they may be asked to unwind their merger, which would have serious legal and financial ramifications. Further, this situation would also present challenges to impose workable remedies on a merger that has already occurred. Therefore, parties would have to undertake an extensive assessment of their transactions to ensure that they are not incompatible with merger laws post-merger. A similar challenge may occur under the Regulations, which outlaw the implementation of a merger before notification but not its implementation before determination by the Commission. The COMESA merger control regime is non-suspensory and if the parties are sure that the Commission is unlikely to find the merger incompatible with the Regulations, they may proceed to implementation, bearing in mind the risk they take should the Commission determine otherwise.


Could it be a valid defence for failure to comply with statutory timelines?

It is not a secret that the pandemic has ferociously disrupted the ordinary ways of conducting business. It has also caught napping legal systems that are very slow to respond to emergencies, in most cases because of the bureaucratic institutions and systems created and established to create and amend laws. Therefore, it is expected that there will be a myriad of legal breaches and suits for as long as the pandemic continues and in the aftermath. It is likely that most companies and businesses caught breaching contracts would invoke the defence of force majeure. The article predicts such an occurrence as there is already heightened talk on whether the pandemic would satisfy the requirements of force majeure.

While under contract law it may be worthwhile to argue that the pandemic meets the criteria of force majeure, especially where it is expressly provided in the contract, it remains to be seen whether this principle would stand under public law in these circumstances: only the courts would determine this. The author has his own reasoned opinion however, that while there is no prescriptive definition for force majeure in the Regulations (which in English, literally, means ‘superior force’), the terms force majeure, vis major and casus fortuitus may be, and are often, used interchangeably. Force majeure presents a legal mechanism that may be relied on by persons who are under a legal obligation to carry out specific performance, but are unable to carry out that performance pursuant to an exceptional event or circumstance (such as an act of God) that is beyond the control of those persons bearing the obligation. Simply put, persons may be excused from specific performance if force majeure is legitimately invoked. In a private law context, force majeure and similar clauses are typically inserted in contractual agreements, and only if certain prescribed criteria are satisfied may parties successfully raise a defence against specific performance. If agreements do not specifically contain these clauses, then the common law defence of supervening impossibility of performance may be relied on, provided its stringent requirements are met.

In a public law situation, and when a statutory obligation is placed on persons to perform statutory functions, claims similar to force majeure may also be relied on if faced with unforeseen changes in circumstance. In most jurisdictions, the common law maxim lex non cogit ad impossibilia may be raised (which in English, literally, means ‘the law does not compel a man to do that which he cannot possibly perform’). The defence has its origins in English law and Craies on Statute Law5 states the following:

Under certain circumstances, compliance with the provisions of statutes which prescribe how something is to be done will be excused. Thus, in accordance with the maxim of law, Lex non cogit ad impossibilia, if it appears that the performance of the formalities prescribed by a statute has been rendered impossible by circumstances over which the persons interested had no control, like an act of God or the King’s enemies, these circumstances will be taken as a valid excuse.

In the South African case of Hay v. The Divisional Council of King William’s Town,6 the court distinguished defences that may be raised in a private context from those that may be raised when fulfilling a public function. The court specifically upholds the following legal principles:

[W]hen a duty is imposed upon anyone by law, there must always be an implied condition that it is in his power to perform it. Lex non cogit ad impossibilia and impotentia excusat legem (Coke on Littleton), are very old maxims of law.
[W]here the law creates a duty or charge, and the party is disabled to perform it without any fault in him and hath no remedy over, then the law will excuse him.

It also appears from case law that parties when faced with such impossibility are expected to take reasonable steps to mitigate against the difficulties they present.

From a merger-control perspective as stated above, the covid-19 crisis places challenges on competition authorities in two respects. First, given that accessibility to third-party market participants is limited, it hampers the ability of the authority to effectively investigate merger trans­actions, particularly those that give rise to horizontal, vertical or public interest issues, or raise other issues requiring meaningful third-party engagement. Second, it hampers the authorities’ turnaround time in deciding on mergers. In sum, based on principles in English law, it is possible for persons or firms to raise legitimate defences for the failure to obey a statutory instrument, this provided that all reasonable endeavours have been taken to guard against the impossibility of performance and all reasonable measures have been taken to surmount the difficulties presented. 

However, to avoid legal speculation as to what the outcome of the court would be in an instance where the Commission or the merging parties raised the defence of force majeure or other similar defences for failure to comply with the Regulations, what needs to be done during this time is to expressly legislate for such an excuse in cases of breaches that would be causally linked to the pandemic. Without this arrangement, the parties may find themselves in all sorts of legal drama for inadvertent omissions. The promulgation or advance for such legislation is already on the table in some jurisdictions. For example, there are press reports that the US Department of Justice hopes to have included in the next round of pandemic legislation, a proposal that would let it and the Federal Trade Commission add 15 days to merger timelines during emergencies, such as disease outbreaks, natural disasters or government shutdowns. In Kenya, law firms such as Anjarwalla & Khanna are already advocating for one omnibus Bill. Their expectation is that this Bill should address all the proposed amendments relating to the multiple statutes and laws that would require amendment. In COMESA, legislation of this kind may not be promulgated with such speed owing to the indispensable requirement to involve all member states. This is not only unique to COMESA but most, if not all, international organisations. There is sufficient evidence that international and regional laws are not created with speed comparable to municipal law. Therefore, under the circumstances, COMESA and other such institutions may learn from this pandemic and in future legislate through an express provision in the law with laid down criteria on how they would treat merger control in these situations.

Substantive assessments of mergers

As observed, the Commission has not made any changes to its statutory procedural requirements on merger control. It has only chosen an expansive interpretation of the law while staying within the ambit of the law. This is also true for substantive assessment of mergers. The pandemic has not resulted in any relaxation of the standards required for merger investigations. While in most cases and jurisdictions, the assessment of mergers is forward-looking and is concerned about the competitive structure of the market in the long run, the impact of the covid-19 pandemic on markets may be short term and competition authorities should generally not be looking at short-term fixes at the expense of long-term harm to the competitive structure of markets. Though it is uncertain how long the pandemic will last, we may predict with reasonable probability that a vaccine or cure for the coronavirus may be found in not more than 24 months, thanks to the commendable scientists who are working day and night and giving us such assurances. However, bad merger decisions made during the pandemic may continue to affect markets long after the pandemic. Therefore, the parties should expect the Commission to continue scrutinising mergers thoroughly as it did prior to the pandemic.

The challenge of course will be adherence to statutory timelines, gathering sufficient data and conducting site visits, especially for mergers that present anticompetitive concerns. This is a daunting task that the Commission and many other competition authorities should undertake to arrive at accurate determinations that shall outlive the pandemic. The site visits that are crucial for the determination of mergers that present anticompetitive concerns are a practical impossibility during the pandemic as most countries, industries and firms are on lockdown or, at best, activities are severely curtailed. This explains why lawmakers in the United States are advocating for a ban on mergers during the pandemic. In COMESA and most international organisations, this swift amendment or introduction of laws as already observed may not be possible because of various factors that are beyond the scope of this article. The Commission will depend on statutory provisions with serious consequences to provide a deterrent effect should parties contemplate providing misleading or incorrect information to secure approval of their merger. In such an instance, the Commission may revoke the merger and declare it null and void ab initio. Further, the Commission may impose a penalty of up to 10 per cent of the parties’ turnover in the Common Market. These are serious consequences that any responsible corporate citizen may not want to suffer as their effects may be more devastating than the effects of covid-19.

Merger notifications during and after the pandemic

There is incontrovertible evidence that the global economy is currently in serious distress, owing to plummeting demand occasioned by sweeping measures to contain the pandemic, among other reasons. We have already witnessed significant falling stock prices, with oil prices at one time recording negative in the United States. Every nation on Earth has felt the economic effects of the pandemic.

In such depressed conditions, there is a lot of uncertainty and investors become reserved about investing their money in business ventures, including mergers and acquisitions. It is difficult to predict with sufficient accuracy at this stage on the volume of mergers during and after the pandemic. We shall make a comparison in the next edition of the number of mergers the Commission dealt with in 2019 before the pandemic and in 2020 during the pandemic and explain if the observations will relate to the pandemic. However, on the basis of past experience (for example, the 2008 global economic meltdown), it is highly likely that merger activity will decline sharply as investors and shareholders adopt a wait-and-see approach. However, post-pandemic, we are likely to see a boom and resurgence of mergers as many companies will have filed for bankruptcy and insolvency and their only means of continued survival would be through a merger. For example, Virgin Australia was one of the first major carriers to announce business challenges and possible failure, with the pandemic more or less bringing air travel to a standstill. Closer to home, South African Airlines, which has been in financial trouble for a long time, is expected to find itself in the same shoes unless bailed out by the government. Organisations in any other industries are also at risk of near obliteration.

Therefore, post-pandemic, companies that engage in mergers, acquisitions, takeovers, amalgamations, and other such arrangements, are likely to submit that their transactions be authorised by competition authorities, invoking the failing or flailing firm defence, or similar public interest justifications. These justifications could lead to the authorisation of mergers that might otherwise have been rejected. The challenge for competition authorities both in the developed and developing world would be to apply the strict requirements and criteria for a failing firm whose bar appears to be high. Competition authorities would have to strike a balance on whether to reject these mergers on the ground that they do not meet the requirements, and risk being criticised that they are hindering the resuscitation of the global economy, or they will be able to approve such mergers with strict undertakings to address competition concerns emanating therefrom. Only time will tell. In such an instance, competition authorities will have to undertake an in-depth merger assessment, as undertakings that are fond of engaging in anticompetitive mergers may find this opportune and engage in creeping anticompetitive mergers.


The covid-19 pandemic is with us for the foreseeable future and at least until a vaccine or cure is found. For now, competition authorities as much as businesses have to accept a new way to conduct our affairs. For businesses, it will be essential to thoroughly plan their legal and business undertakings early and engage competition authorities in a timely manner to avoid breaching competition laws. As regards competition authorities, it will be very important to enhance efforts and efficiency in the assessment of mergers, given the challenging circumstances, to avoid delaying approvals of mergers. Late approvals may exacerbate the current situation as they usually result in significant uncertainty in already ailing markets. One way of getting around this is for the competition authorities and merger parties to engage in pre-merger notification engagements early enough and for competition authorities to begin the merger inquiries in the background even before the merger is formally notified. The Commission already undertakes this approach conscientiously. Further, firms should not derogate from complying with competition law by taking advantage of the challenges caused by the pandemic. Such actions will certainly catch up with them post-pandemic and the consequences may be dire. While competition authorities shall endeavour to ensure that transactions are cleared quickly, since they understand the ramifications of delayed transaction clearances, merger parties should also expect that merger approvals may take longer than has been the case hitherto.

Moreover, competition authorities, especially national competition authorities, should expeditiously engage their governments to expressly enact legislation that would allow for the efficient application of competition laws during pandemics and similar periods without much disruption and having to run the risk of inadvertently breaching the law. For those authorities for which this may not be immediately possible, lessons have to be learned from this pandemic and legislation must be enacted now that can be invoked during future pandemics and similar periods. This is unlikely to be the last pandemic; others will occur and our laws should be able to respond to these situations immediately. I am not a prophet of doom but history is replete with evidence of pandemics and it would be prudent to be prepared.


2 The Common Market is composed of 21 African countries – see (last accessed on 24 April 2020).

4 Mauritius is a COMESA member state.

5 William Feilden Craies and S G G Edgar, 7th edition, London, Sweet and Maxwell, 1971.

6 1 EDC (1880) 97.

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