Balancing acts: the double-edged sword of mergers in SA

Lebohang explains that under the Competition Act, the Commission must first assess the impact of a merger on competition. If the merger is found to have an adverse effect, the Act requires the Commission to consider whether technological, efficiency, or other pro-competitive benefits might outweigh this negative impact.

Practically, Lebohang says that this means the Commission evaluates whether the merger would foster innovation that wouldn’t occur otherwise. Innovation can lead to the creation of new product categories, which might increase employment and stimulate the economy by putting more money into consumers' pockets.

Lebohang says that employment is a key public interest factor the Commission must consider when assessing mergers. The challenge lies in balancing the approval of mergers beneficial to competition and the economy while balancing any negative impact on employment.