South Africa’s Competition Commission Widens Scrutiny of Small Tech Mergers

South Africa's Competition Commission is expanding its examination of small tech mergers, utilizing digital-market guidelines to scrutinize acquisitions even before they meet formal thresholds. This move aims to manage the growth of South Africa's digital economy and prevent dominant firms from acquiring promising rivals too early.

The Commission can review small mergers within six months of their implementation if there are concerns about competition or public interest. Notification guidelines for small mergers took effect on December 1, 2022, targeting digital markets and deals where digital assets, intellectual property, data, or valuation concerns could enable a dominant firm to acquire a smaller rival.

Parties must notify the Commission if their annual turnover or assets exceed the large-merger threshold and the deal consideration reaches the large-merger target level. The thresholds for small and large mergers were revised on May 1, 2026, with intermediate and large merger requirements set at R1 billion and R9.5 billion, respectively.

The Commission has a 20-business-day review period, which it can extend, to assess the potential impact of small mergers on competition. South Africa aims to attract investment and industrialize while preventing dominant platforms from acquiring innovative local technology firms too quickly. The country seeks to balance foreign direct investment and domestic competition, striving for digital sovereignty amidst competing technology ecosystems.