Suitability of the Remedy of Divestiture in Non-Merger Cases: A South African Perspective

Abstract

This article considers the suitability of the remedy of divestiture in non-merger cases, particularly in markets where high concentration levels may embolden incumbents to engage in abusive conduct. The article observes that the prevailing practice in competition-law enforcement is that, while divestiture is an acceptable remedy in merger cases, it is generally eschewed in non-merger cases. The article argues that economic conditions in South Africa provide justification for the use of the divestiture remedy in non-merger cases, particularly in cases of abuse of dominance in concentrated markets. The article observes that there is sufficient legal authority and history supporting the use of the remedy in non-merger cases.