High customer dissatisfaction is evident in the complaints filed with the Competition and Consumer Authority (CCA), particularly in the areas related to motor vehicles and mobile phones.
The CCA reported registering over 1,100 consumer complaints, with motor vehicles accounting for more than a quarter of the total complaints in the 2022/2023 financial year. The nature of complaints related to motor vehicles was, however, not disclosed.
Chief Executive Officer, Tebelelo Pule said other top complaints include deceptive conduct and non-disclosure of key information on goods and services.
She also noted failure to deliver goods by suppliers as a top complaint and said in some instances, suppliers are accused of supplying goods that fail to meet safety and quality standards as well as unfair contract terms.
Around 17 percent of recorded complaints were related to the mobile phones sector, CCA boss disclosed, without clarifying.
CCA, according to Pule, is currently conducting an inquiry into the automotive industry to establish the state of the competition and assess government policies and regulations for the industry.
In its endeavor to pursue justice for complainants, Pule noted that the Authority encounters challenges in litigating and enforcing decisions against enterprises engaging in unfair business practices against consumers.
“The Authority realised that most of them were briefcase enterprises with no physical address and place of business,” she said.
They engage police when they hit a brick wall in trying to pursue those who violate competition law.
“It has also become apparent that quite a number of these enterprises have been de-registered from the CIPA’s register and appear to be trading unlawfully,” said Pule.
With regards to enforcement, the Authority is reportedly sitting with several court orders that are still to be enforced. This is because enterprises are either de-registered or are briefcase business operators.
Due to the intractability of some businesses, the CCA has writ executions that cannot be enforced emanating from Tribunal orders exceeding P70 000 in refunds owed to consumers and around P26 000 00 in legal costs owed to the Authority.
Mergers and acquisitions
Pule has disclosed that since its inception, CCA has handled a total of 434 mergers. Out of this, 374 were unconditionally approved, 56 were approved with conditions and four were rejected.
“There is a positive growing trend in the notification of mergers,” she said.
“This increased appetite for consolidation in the country has been driven by both domestic and cross-border mergers.”
Between 2018 and 2022, the real estate industry reportedly witnessed significant mergers and acquisition activity, constituting over 30 percent of the assessed and approved deals.
Pule said the expectation was that the ushering in of the new transfer duty fee increasing from 5 percent to 30 percent of the value of property in the case where the buyer is a non-citizen of Botswana, or not a 100 percent citizen-owned company would negatively impact inbound deals in this sector.
“However, the CCA has experienced an ever-increasing trend in mergers and acquisitions involving property,” she said.
Most importantly, she noted that the Authority continues to demonstrate its commitment to reducing concentration and ensuring that mergers assessed do not lead to adverse effects on competition.
“CCA considered and rejected the Dulux/Plascon transaction mainly due to market dominance reasons, among others,” said Pule.
“The approval of the merger between two of the global leading paint manufacturers would invariably lead to dominance by the merged entity to the detriment of the growth or expansion of existing citizen-owned paint manufacturers as well as making it difficult for new entrants to penetrate this market.”
While the two parties had approached the Competition and Consumer Tribunal for recourse, they have since abandoned the merger. On the other hand, Pule said the conditional approval of the Vitol/Engen merger highlights the commitment of the CCA to aligning its public interest mandate with the government’s broader Citizen Empowerment mandate.
“Ordering a divestiture of the merged entity’s 40 fuel service sites would ensure that there is a significant dilution of the merged entity’s presence in the distribution of fuel and most importantly allow for new entry and expansion by citizens in this market,” she emphasised.
