Zimbabwe Competition Law: Restrictive Practices
The Competition and Tariff Commission (“Commission”) is a statutory body established in terms of the Competition Act [Chapter 14:28] (“the Act”) to implement and enforce Zimbabwe’s Competition Policy and Law. The Act provides for, as one of the Commission’s functions, the investigation, prevention and discouraging of restrictive practices which are contrary to public interest.
What are Restrictive Practices?
These are practices, agreements, understandings, or arrangements between independent companies that significantly lessen competition or limit market access. These practices reduce the degree of contestability of a market, such as cartels or other forms of horizontal or vertical market restraints, abuse of dominant market position, monopolization, price discrimination, and the like. They are employed mainly by dominant firms which have market power, preventing other firms from competing fairly in the marketplace, and often result in the exploitation of consumers by denying them choice and quality.
According to section 2 of the Act, restrictive practice” means—
(a) any agreement, arrangement or understanding, whether enforceable or not,
between two or more persons; or
(b) any business practice or method of trading; or
(c) any deliberate act or omission on the part of any person, whether acting
independently or in concert with any other person; or
(d) any situation arising out of the activities of any person or class of persons;
which restricts competition, directly or indirectly, to a material degree.
Consequences of restrictive practices
Restrictive practices can: –
- undermine the efficiency and fairness of markets resulting in higher prices, poorer service delivery and stifling of innovation
- prevent or restrict entry into any market of new players producing or distributing any commodity or service
- result in the creation of monopolies situations which are contrary to public interest
Powers of the Commission to Investigate Restrictive Practices
Section 28 of the Act empowers the Commission to make such investigation as it considers necessary into any restrictive practice which it believe exists or may come into existence.
