DIFFERENT WORLDS, DIFFERENT LANGUAGES: BRIDGING THE LAW-ECONOMICS DIVIDE IN COMPETITION LAW

Abstract

‘The challenge for South African lawyers is to understand the relation between law and economics, to grasp the economic consequences of decisions taken in terms of the Act’. This, Davis J says, ‘become[s] important if South African competition law is to develop into a coherent body’. The interaction between law and economics is fundamental to the nature of competition law and a deep understanding of the two disciplines is a prerequisite for decisions that would meet the objectives of competition law. Competition law concerns the regulation of markets; competition policy seeks to ‘remove or reduce the distorting effects of excessive economic concentration and corporate conglomeration, collusive practices, and the abuse of economic power by firms in a dominant position’. This in itself calls for an economic analysis of market situations to assess the fairness of trade, and the evaluation of economic concepts such as dominance, market power, and market share, that define the relationship between players in the market.