NAMIBIA Law and Practice Contributed by: James Smith and Daneale Beukes, Engling, Stritter & Partners
In refining the market definition, the NaCC applies the hypothetical monopolist test, otherwise known as the “small but significant and non-transitory increase in price” (SSNIP) test. In applying the SSNIP test, the question is asked whether, if the monopolist raised the price by 5–10% permanently, enough customers would switch to another product or supplier to make that price rise unprofitable. If the answer to the question is affirma - tive, then there are close substitutes available, thereby expanding the market to include those substitutes and rendering the increase in price unprofitable. If, on the other hand, consumers would stick with the product whose price has been increased, then there are no substitutes and the market is restricted to that prod - uct. The NaCC does not apply any de minimis thresholds in its assessment. 4.3 Reliance on Case Law The NaCC does rely on case law from other jurisdic - tions. The jurisdictions most frequently relied on are South Africa and the European Union. 4.4 Competition Concerns The types of competition concerns depend on the nature of the merger being investigated. The ordinary traditional theories of harm in relation to conglomer - ate, horizontal and vertical mergers are taken into consideration. For horizontal mergers, the following are considered: • unilateral effects; • co-ordinated effects; and • market foreclosure. For vertical mergers, the following are considered: • input and customer foreclosure; • tying and bundling; • facilitation of collusion; and • the establishment of market power. For conglomerate mergers, the following are consid - ered:
• non-coordinated effects; • co-ordinated effects; • tying and bundling; and • foreclosure. 4.5 Economic Efficiencies In terms of Section 47 (2)(c) and (h), the NaCC may consider: • the extent to which the proposed merger would be likely to result in a benefit to the public which would outweigh any detriment which would be likely to result from any undertaking, including an undertaking not involved as a party in the pro - posed merger, acquiring a dominant position in a market or strengthening a dominant position in a market; and • any benefits likely to be derived from the proposed merger relating to research and development, technical efficiency, increased production, efficient distribution of goods or provision of services, and access to markets. The NaCC would be required to perform a two-stage substantive analysis: firstly, whether the merger is likely to prevent or lessen competition; and secondly, whether any public benefits, including efficiencies, outweigh the potential detriment caused by the pro - posed merger. These efficiencies must be merger- specific, verifiable and beneficial to consumers. 4.6 Non-Competition Issues Section 47 (2)(c) to (g) of the Competition Act express - ly permits the consideration of non-competition issues and provides the public interest factors which the NaCC may consider, including the extent to which a proposed merger would: • be likely to result in a benefit to the public which would outweigh any detriment which would be likely to result from any undertaking, including an undertaking not involved as a party in the proposed merger, acquiring a dominant position in a market or strengthening a dominant position in a market; • be likely to affect a particular industrial sector or region; • be likely to affect employment;
432 CHAMBERS.COM
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