The Competition Consumer Authority (CCA) has resumed its investigation into potential anti-competitive practices by the Botswana Medical Aid Society (BOMAID), signaling a renewed push for accountability after a brief pause due to a legal appeal.
The Court of Appeal recently ruled that the Botswana Medical Aid Society (BOMAID) is an enterprise subject to regulation by the Competition Act.
The ruling clears a path for the Authority to resume its investigations against BOMAID for alleged anti-competitive practices.
Following the appeal of the 4th November 2022 High Court decision by BOMAID, on 19th April 2024, the Court of Appeal dismissed the appeal with costs and upheld the High Court’s decision that indeed BOMAID is an enterprise in terms of the Competition Act 2018 because it carries on business for gain. The court found that BOMAID may not have profit-making as its primary objective but it intended to grow as a market player in the provision of medical aid funding; by investing in for-profit businesses some of which provide medical services it engaged in business for gain.
On April 19, 2024, the Court of Appeal upheld the High Court’s ruling, affirming that BOMAID qualifies as an enterprise under the Competition Act of 2018. Despite BOMAID’s primary objective not being profit-making, the Court found its engagement in business activities aimed at market expansion, including investments in for-profit ventures offering medical services, constitutes business for gain.
In 2020, the Competition Consumer Authority (CCA) launched investigations against BOMAID for potential abuse of dominance, citing violations of specific provisions within the Competition Act. These included allegations of refusal to engage with other enterprises and instances of price discrimination or imposition of other trading conditions.
Upon receiving a notice of intention to investigate BOMAID, the CCA revealed that BOMAID sought recourse with the High Court. Their claim alleged exemption from the provisions of the Competition Act on the grounds that their activities are geared towards achieving a non-commercial socio-economic objective. BOMAID argued that it does not fit the definition of an enterprise as outlined in section 2 of the Act and that it does not engage in business for gain or reward.
But the Court of Appeal took note of the fact that the medical aid market in Botswana is not regulated, resulting in no limitation to the functions and conduct of medical aid funds as compared to other countries. Left unchecked, therefore, BOMAID’s direct or indirect investment in the health services market may lead to service providers being side-lined, thereby affecting medical aid members’ right to choice of service provider, quality and fair price in the provision of medical services.
The Court of Appeal also found that BOMAID may not have been carrying its business for profit but it is clear that it intended to grow itself as a market player in the provision of medical aid funding and from the complaints made to the Authority to decide who among the health service providers to give business and whom to close out without consideration of quality of service to its members.
“This constitutes gain in that not only does it contribute to the growth of the resources, value and consequently wealth of the fund, if the complaints are established, such conducts runs afoul of Section 31 of the Act as it inhibits the spirit of competition,” the court said.
“Added to that is its direct and indirect investment by way of shareholding in services provided by market players it is using its advantageous position to indirectly compete for that market segment of provision of health services with those who are already health service providers of its members and who look to it for the market.”
The court further found that the provision of medical aid in Botswana was not based on socio-economic objectives or social solidarity in that it is voluntary and the benefits are commensurate to the contributions.
“A member’s benefits are not philanthropic or benevolent nor defined by statute to provide an across the spectrum standard medical aid cover,” Court of Appeal found.
