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Review:

Dauds on Competition Law – Substantive Issues

Dauds on Competition Law: Substantive Issues by Cornwell Dauds

 

Published by QB Publishers

 

There is a common perception in the world outside of the cloisters of law that the law changes at a glacial pace. The truth is that law changes at a pace that is rapid indeed. Changes in technology, society and politics all influence the process. A generation ago, ‘the law of competition’ – if the term was used at all – applied to ‘passing off’.

The law of copyright, trade-marks and patents – to which we today generally refer as ‘the law of IP’ or ‘the law of Intellectual Property’ – was often considered a subset of competition law.

Now we have the Competition Act no 89 of 1998 which, in terms of s 3(1) thereof, applies to ‘all economic activity within, or having an effect within’ South Africa, an Inspectorate (Competition Commission), Competition Tribunal and the Competition Appeal Court.

Part of the reason for this is the thrall of regulation which has gripped politicians all over the world. Nevertheless, the complexity of modern life does indeed require regulation. The exponential growth in administrative law, around the world, since the end of the second world war, underscores the point. Administrative law recognises the formidable power of the modern State.

One does not need to be a Marxist to know and understand that capitalism, potentially, contains the seeds of its own self-destruction. Market forces are not always self-correcting. Free markets can indeed lead to monopoly capital.

The Competition Act, as its purpose set out in section 2 makes clear, attempts to harness two forces that are often in dynamic tension: the benefits of competition by control and regulation.

Section 8(a) prohibits firms from charging ‘excessive prices to the detriment of consumers’. But what does this mean? Clearly, a value judgment has to be formed but different people have different values.

Case law, travelling all the way to the Constitutional Court, has made it clear that when it comes to competition law, it is difficult indeed for lawyers to determine whose values are ‘right’ or should prevail.

Therein lies a fertile field for lawyers. Cornwell Dauds is to be commended for venturing into this field with this book.

An excellent point made by him in this book, as a recurring refrain in his book, is that there has to be – and indeed this is now occurring – a shift away from a ‘form-based approach to any analysis of whether competition is or is not unfair to one that is effects-based.

But to understand effects, one has to have a very good understanding of economics. Here Dauds shows his form, very well indeed.

It is no accident that the Max Planck Institute in Germany encourages an interdisciplinary approach to science, economics and law. This integrative approach is one of the reasons for Germany’s extraordinary economic and social success over the past five or six decades.

The book has chapters dealing with, inter alia, horizontal price fixing, vertical price fixing, exclusionary conduct, predatory pricing, excessive pricing, price discrimination, horizontal and vertical mergers.

Although some of this terminology can be intimidating to the uninitiated, Dauds performs admirably in explaining how these different concepts are and how, for example, vertical mergers differ from horizontal ones.

The book is both a handy and scholarly work.

NIGEL WILLIS

Willis is a Judge of the Supreme Court of Appeal

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