Social and political goals of mergers in competition law: comparative analysis of the efficiency and public interest provisions in Kenya and South Africa

Includes bibliographical referencesA principal goal of competition law is to promote fair distribution of wealth. Fair distribution of wealth is entrusted to competitive markets since they reward efficiency, innovation, spread wealth and decentralise economic power. While competition reflects the business conduct of enterprises, it cannot disassociate from the legal and regulatory framework, barriers to entry and prevailing conditions in markets for labour, infrastructure services and other production inputs. Redistribution of wealth acknowledges competition law as a tool that can be utilised to protect those at the lower end of income distribution by reducing prices allowing a larger basket of goods and services to be purchased. Competition law is a tool that preserves market competition to provide an environment that encourages responsive business, efficiency and serves the interests of consumers. In developing countries, competition law and policy receive particular emphasis as being crucial and key in the economic and structural reform and addressing concerns of distribution and power. Competition law in Kenya cannot ignore the wider industrial policy or socio-economic considerations in Kenya. These social and political goals of competition law are important in developing countries with poverty, great income inequality. There is need to choose a means of addressing the equitable allocation of resources that will produce the least amount of inefficiency and competition law is the right tool to achieve this. Kenya is a factor-driven economy where the level of productivity is determined by labour, institutions, infrastructure and the macro-economic environment. Enacting the Competition Act in Kenya was a response to economic and political reform to improve the welfare, well-being and economy in Kenya. Merger analysis in Kenya would require weighing gains and losses in efficiency in order to establish whether the merger will benefit other recipients other than market participants such as consumers and producers. South Africa has well established interpretation and implementation addressing the trade-off between public interest provisions and efficiency. Interpretation of the merger laws in South Africa illustrate engaging an exercise of proportionality required to determine how to balance the competing arguments between efficiency, welfare standards and public interest