Making Public Interest Considerations in Merger Control Regimes Work: Reassessing the Legal Test

Abstract

Academic research is increasingly questioning whether the goals of competition law should extend beyond the traditional focus on economic efficiency and consumer welfare to include non‐economic issues such as social justice, democracy, environmental sustainability and equality. In this regard, the African experience is particularly valuable since public interest considerations (PICs) are a feature of merger control regimes in many African countries. After an analysis of PICs in Africa, the paper zooms in on South Africa's extensive experience in the field, particularly its legal test for determining when PICs are justified in merger assessment and offers recommendations that could inform other countries. Drawing on the South Africa merger assessment, this paper recommends that PICs and the competition standard be analysed separately but in an interrelated manner, as they complement each other. The likely effect of the merger on specific public interests must be identified and considered only when it is substantial and linked to the merger. Additionally, a merger should be prohibited only if the proposed remedies seeking to address the negative effects on the specific PIC are inadequate, inappropriate, disproportionate or unenforceable. Importantly, when PICs collide, competition agencies should balance each public interest against the others, focusing on whether the likely effect is substantial or whether the remedies are inadequate. In sum, competition agencies should adopt public‐interest merger guidelines that provide businesses with the necessary guidance on the legal test and procedures, enhancing legal certainty and attracting investment.