European Perspectives of Competition Law in the OHADA Region

Abstract

OHADA, the Organization for the Harmonization of Business Law in Africa, has a long tradition of drafting uniform business laws for the Francophone countries of West and Central Africa. However, OHADA has not so far addressed the topic of competition law, although several regional economic integration systems in Africa already have supranational competition law in place, such as the competition law of the West African Monetary and Economic Union (WAEMU), or are about to draft and implement such laws. This paper discusses what role OHADA could play in the future in the field of competition law. It thereby adopts a European perspective by relying on the experience of the European Union regarding the harmonization of the domestic competition law of its member states. As a basis for the analysis, the paper first describes the advantages of having competition law for African states in general. It identifies a dual economic and political function of competition law. First, competition law would help to increase the efficiency of the African domestic economies and protect these economies against restraints on competition initiated in particular by multinational firms. Second, competition policy should be part of a policy package of good governance that addresses problems of corruption and bid rigging in particular. The need for competition law and the advantages deriving from it as well as the institutional challenges it presents are illustrated by a discussion of the case of Tanzanian beer, which was dealt with by the Tanzanian Fair Trade Commission but which would have been a prime candidate for the new regional competition law of the East African Community. In a substantive analysis, the paper first explains that the EU and OHADA apply different concepts of harmonization. While the EU uses the term with regard to the harmonization of domestic laws, OHADA adopts uniform laws directly applicable in its member states. It may be surprising the EU has never forced its member states to harmonize their national competition laws. Yet, within the framework of Regulation 1/2003, EU law has set up a decentralized procedural system that integrates the national authorities and courts for the purpose of enforcing EU competition law. It is this procedural approach that has most recently accelerated a process of autonomous harmonization of domestic competition laws with the EU standards. The paper explains the reasons for this kind of “soft” harmonization against the background of the decisions of the German legislature in reaction to the adoption of Regulation 1/2003. The paper then discusses various options for OHADA to deal with competition law in the future. It rejects the classical approach, which consists of drafting a uniform competition law applicable in all OHADA member states, the adoption of a supranational OHADA competition law, which would also include the creation of an OHADA competition authority, and the harmonization of the domestic competition laws of member states. Rather, it proposes an approach consisting of “soft” harmonization. This approach would consist of the development of non-binding recommendations on competition policy issues, which could be followed by a competition authority–domestic or regional–that would take into account the specific socioeconomic situation of the region as well as the need for sustainable development and for integrating Sub-Saharan countries into the world economy. Finally, the paper criticizes the current EU policy of exporting competition law as part of its negotiations of Economic Partnership Agreements with developing countries in particular. Instead of promoting regional competition law, which might easily involve regional reorganization, the paper recommends that the EU support the creation of an African Competition Policy Center that would work on policy guidelines with a view to developing an African competition policy. However, whether the financing of such a Center should come from the EU and whether this Center should be established as part of the OHADA institutional framework are secondary questions.