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Competition Act, 1998 (Act No. 89 of 1998)

Notices

Notice in terms of Section 10(7) of the Competition Act, 1998 (As Amended): Day Hospital Association - Amendment of Effective Date in respect of Conditional Exemption

Notice No. 2067 of 2022

 

Notice No. 2067

6 May 2022

GG 46322

 

Competition Commission South Africa

 

1. The Competition Commission (“Commission”) published a Notice granting the Day Hospital Association (“DHA”) a conditional exemption in the Government Gazette on 1 April 2022 (Gazette No. 46164 of 2022), as provided for by section 10(7) of the Competition Act No 89 of 1998, as amended (“Act”) read with Rule 19(5) of the Rules of Conduct of Proceedings in the Commission.

 

2. The Commission granted the DHA the exemption in terms of section 10(3)(b)(ii) of the Act for exemption from certain provisions of Chapter 2 of the Act. The conduct for which the exemption was sought related to (1) Collective Bargaining, (2) Centralised Procurement and (3) Alternative Reimbursement Models, the same conduct exempted under the NHN exemption. However, according to the DHA, the reason for this separate application, is that the NHN exemption which permits the NHN to bargain collectively with medical schemes on behalf of its members in relation to tariffs and other matters, is not sufficient for members of the DHA since the business model of a day hospital requires a unique approach.

 

3. As reflected in the Notice dated, 1 April 2022 - the Commission’s investigation in respect of the exemption application, revealed that agreements and/or practices which the Applicants sought to be exempted from, would likely result in direct contraventions of Section 4 of the Act, as the agreements and/or practices relate to co-ordination between parties in a horitzontal relationship.

 

4. However, it was the Commission’s view that granting the exemption would be beneficial in that, it may enable the Applicants, to enhance their competitiveness, through structures that are specific to their business operations, thereby promoting the effective entry into, participation in or expansion within a market by small and medium businesses, or firms controlled or owned by historically disadvantaged persons. Moreover, the exemption can be used as an instrument for transformation in the private healthcare sector and also facilitate entry and participation of SMMEs and firms owned by HDIs, in line with the objectives of the Act.

 

5. In light of the above, the Commission granted the DHA and its’ members a conditional exemption, for a period of five (5) years, effective from 1 June 2022 up to and including 31 May 2027, subject to a set of conditions which included the ‘Dual Membership’ clause. According to this clause, each member of the DHA participating in the Exemption as granted, must cease all affiliation and membership from the NHN by 31 December 2022.

 

6. Subsequently, due to recent developments in the Western Cape High Court (Case No. 7776/2022), the Commission has decided to amend the ‘Effective Date’ of the exemption, as granted, as well as, the conditions attached thereto. Accordingly, the exemption is granted for a period of five (5) years, now effective from 12 April 2022 up to and including 11 April 2027, subject to Conditions and Monitoring Mechanisms, which now excludes the ‘Dual Membership’ clause.

 

7. In this regard, the applicable Conditions and Monitoring Mechanisms, as amended, are attached hereto as

 

8. ANNEXURE 1.

 

9. Any person with a substantial financial interest affected by this decision may appeal to the Competition Tribunal in the prescried manner in terms of Section 10(8) of the Competition Act.

 

10. Any queries should be directed to:

 

Mr Tlabo Mabye/ Mr Derrick Bowles / Ms Priya Reddy

Competition Commission of SA

Market Conduct Division,

Private Bag X23,

Lynnwood Ridge,

0040

or by email: [email protected] / [email protected] / [email protected]

 

In correspondence kindly refer to the following case number: 2021Feb0013