Survey exposes in-house legal concerns over effective competition risk mitigation.

African legal teams have made competition compliance a top priority for businesses as they confess employees could inadvertently breach competition laws due to holes in company procedures and education.

A survey by South African law firm Bowmans, released on 15 July, cited competition as the main source of compliance risk for in-house legal teams, with nearly a quarter (around 22%) of respondents putting this top of the table, followed by privacy and data protection (19%) and sector-specific legislation (15%), with other concerns such as ESG, fraud, corruption and AI coming further down the list.

The survey, Navigating Competition Compliance – which sought responses from various in-house counsels in Africa – disclosed some striking insights, with nearly half (45%) of legal heads stating they were unsure if their organisation’s competition policies were easy to understand, while 14% said they were not simple to decipher. Only just under half (41%) were confident their compliance policies were straightforward to follow.

In addition, 45% of respondents lack confidence that employees sufficiently understand the competition risks relating to their daily working practices and, subsequently, relayed high levels of concern that staff may “inadvertently engage in activities that contravene competition laws”.

Asked whether an employee would know the necessary steps to take if they identified a competition concern, nearly half (46%) answered no, over a quarter (29%) were unsure, while only 25% said yes. Meanwhile, 41% conveyed doubts that the structures or processes to detect and report competition risks were adequate, with just under a third (31%) believing these structures were sufficient.

The findings come amid an evolving regulatory landscape in Africa, with new competition laws being implemented across jurisdictions to keep pace with digital business practices and developing technologies.

The survey notes that competition laws can be “varied and disparate” across regions, with legal teams faced with a myriad of guidelines and approaches enforced by different regulators.

The majority of counsels manage competition compliance across four to 10 jurisdictions, while just under 20% deal with over 15 jurisdictions. An overwhelming majority (85%) of respondents’ companies are also subject to sector specific regulations.

According to the survey, countries including Morocco, Sudan, Kenya, Nigeria, Ethiopia, Egypt, South Africa, Zimbabwe, Angola and Mali have national and/or regional competition legislation and an operative regulator in place, while jurisdictions such as Libya, Gabon, South Sudan, Central African Republic, Mauritania and Guinea have no competition legislation and/or regulator.

For those managing multiple jurisdictions, over half (55%) have a general competition law policy but have included country-specific elements when necessary.

Over two-thirds (69%) of counsels have had some form of interaction with a competition authority in the past 12 months, while the majority of competition in-house legal teams comprises fewer than six members, with just under 15% of respondents having a team in excess of 15 people, other key findings reveal.

“We are acutely aware of the complexities in relation to competition law in Africa, as well as myriad other risks competing for the time and attention of the general counsel who assist businesses in being legally compliant. Our clients understand that a competition compliance policy is a key tool in managing competition risk, but the crucial element is ensuring that any such policy is effective,” noted Derek Lotter and Tamara Dini, co-heads of competition at Bowmans in the foreword to the survey.

“Following these findings,” continued Lotter and Dini, “we have set out learnings to support our clients in the management of their legal obligations in a dynamic and complex environment”.

Earlier this month, Malawi introduced tighter antitrust regulations, updating its decades-old competition law and giving tougher enforcement powers to the Competition and Fair Trading Commission (CFTC).

Source: https://www.africanlawbusiness.com/news/21102-competition-compliance-a-mixed-bag-for-african-business