Congo’s Competition Law: A Game-Changer for Business and Innovation

Also available in French

Until now, the regulation of anti-competitive commercial practices in the Republic of Congo was only provided for at regional level,CEMAC[1], by regulation n°06/19-UEAC-639-CM-33 of 07 April 2019.

Now that the Republic of Congo has Law No. 16-2024 of July 9, 2024, on competition, it has the legal tools necessary to penalize anti-competitive actions that “originating on national territory or abroad, the effects of which are likely to be felt on the domestic market.”Examples of these anti-competitive behaviours are anti-competitive agreements and abuse of a dominant position. They also include certain mergers between business entities and anti-competitive policies implemented by government.

Instead of focusing on actions taken by the State (State aid), this article will only address the legal methods permitted for private business entities.

I) Anti-competitive practices

I.1) Anti-competitive agreements

Article 4 of the Act[2] defines anti-competitive agreements between undertakings as all agreements, conventions, express or tacit understandings, collusive tenders, decisions to form associations, concerted practices or coalitions which have the object or effect of preventing, restricting or distorting competition.

Any such agreement shall be deemed null and void.

In addition, the National Competition Authority is responsible for declaring such agreements null and void, without prejudice to any legal action for annulment.

The law provides a non-exhaustive list of anti-competitive agreements, including those that :

1. restrict access to the market for other companies ;
2. prevent prices from being set by the free play of the market, by artificially favouring their rise or fall;
3. limit or control production, outlets, investment or technical progress; or
4. share markets, customers or sources of supply; or
5. organise concerted refusals to purchase or supply;
6. collusive bidding for public contracts.

Some of these agreements are not prohibited, in particular when they have beneficial effects, such as promoting technical or economic progress or creating or maintaining jobs, or are the subject of an exemption decision taken by the Government after consultation with the National Competition Authority, when they notably enable cost prices to be lowered for the benefit of consumers or promote research and innovation  [3]

I.2) Abuse of a dominant position

Article 6 of the Act provides that a dominant position is established when an undertaking or group of undertakings is in a position of economic strength affording it the power to prevent effective competition being maintained on the relevant market by affording it the possibility of behaving to an appreciable extent independently of its competitors and consumers.

Dominance is established by the national competition authority on the basis of an analysis of the following factors; :

1. the market share of the undertaking in question ;
2. the evolution of the position of the undertaking in question in relation to its competitors, customers and consumers;
3. barriers to entry and expansion (particularly structural, strategic and legal);
4. constraints imposed by existing or potential competitors;
5. countervailing buyer power.

A dominant position alone is not enough to constitute an offence; it must also be exploited abusively in a given product or service market.

Article 8 of Law No. 16-2024 of July 9, 2024gives a non-exhaustive list of the types of exploitation of a dominant position that may constitute abuse of a dominant position.

These include notably: offering or charging abnormally high or abnormally low in relation to the cost of production, processing  and marketing costs, with the the object or effect of eliminating from the market or prevent a company or one of its products from entering a market or prevent another company from gaining access to the upstream or downstream reference market, or to another other related market.

II) Mergers

The law provides that a concentration occurs when :

1. two or more previously independent undertakings merge ;
2. one or more undertakings acquire, directly or indirectly, whether by acquisition of a stake in the capital or purchase of assets, by contract or by any other means, total or partial control of one or more undertakings;
3. a joint venture is created which performs on a lasting basis the functions of an autonomous entity.
4. On the other hand, it is expressly stipulated that a concentration is not affected when :
5. financial institutions or insurance companies, whose normal business includes the transaction and trading of securities for their own account or for the account of others, hold, on a temporary basis, shareholdings which they have acquired in an undertaking with a view to resale ;
6. control is exercised on a temporary basis by a company mandated by the public authorities by virtue of legalisation, in the context of receivership or bankruptcy proceedings.

Mergers with a national dimension will require the prior opinion of the National Competition Authority (NCA). It is envisaged that the turnover thresholds above which controls will be carried out will be determined by regulation.

In addition, where a merger is of a Community nature (at CEMAC level), the case will be referred to the CEMAC institution known as the Community Competition Council.

The National Competition Authority may, in particular, prohibit a merger which has the effect of :

• significantly restrict the choice of suppliers and/or customers and consumers ;
• limit access to sources of supply or outlets; or
• create or strengthen a dominant position that significantly impedes competition.

The NCA assesses whether the transaction contributes sufficiently to economic progress to offset any harm to competition.

It takes account of certain factors, which are listed non-exhaustively in Article 13 of the Act.

These include, in particular

– the structure of all the relevant markets ;

– the market position of the undertakings concerned and their economic and financial power;

– the interests of intermediate and final consumers;

– the development of technological progress, insofar as this factor is to the advantage of consumers;

– the competitiveness of the undertakings in question with regard to international competition.

III) Penalties for competition offences

The NCA may impose penalties on any person who contravenes the mandatory provisions of this law.

Infringements give rise to the payment of a fine which may not exceed 10% of the pre-tax turnover achieved at national level during the last closed financial year or a more appropriate financial year in the period in which the infringement was committed.

In the event of a repeat offence, the fine is doubled.

The procedure for determining and paying the fine will be laid down by regulation.

In addition to this fine, the national competition authority may impose a penalty of up to 5% of pre-tax turnover where companies :

• provide inaccurate or misleading information in response to a notification from the national competition authority ;
• provide inaccurate information in response to a request from the national competition authority, or fail to provide the information requested within the time limit set; or
• submit incomplete documents or refuse to undergo checks decided by the national competition authority.
• In addition, companies that are victims of anti-competitive practices may seek compensation before the commercial courts.

In conclusion, The passage of this competition law is a promising step forward, despite its reliance on CEMAC and EU frameworks. Until now, Congo’s domestic market has been plagued by unchecked anti-competitive practices harming consumers. The real test will be how effectively the national competition authority collaborates with the CEMAC Community Competition Council and tackles these issues in practice.

Author:  Yves OLLIVIER, CLG Congo. 

CLG and CLG Plus is at the forefront of transforming competition law across Africa, offering innovative legal solutions tailored to the unique challenges of the continent’s dynamic market landscape. By ensuring compliance and fostering competitiveness, we help businesses navigate complex regulatory environments effectively. Our services are crucial for companies looking to thrive in a region that is increasingly pivotal to the global economy. Do not hesitate to reach out to our team of lawyers and business advisors at CLG for any enquiries. We seamlessly guide our clients through Africa’s abundant investment opportunities and stand ready to assist you in fulfilling your reporting requirements.

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[1] Economic and Monetary Community of Central Africa.

[2] Law No. 16-2024 of July 9, 2024

[3] Article 5 of Law No. 16-2024 of July 9, 2024