Edgar Brandt Windhoek-The Namibia Competition Commission (NaCC) yesterday lost its ongoing fight with the Namibia Association of Medical Aid Funds (NAMAF) when the Supreme Court ruled that the NaCC does not have any jurisdiction over medical aid funds in the country. “The Supreme Court concluded that medical aid funds are not undertakings within the meaning of the Act and that the Commission does not have jurisdiction over them. As the constituent funds are not undertakings, it also followed that NAMAF also did not fall within that definition,” read the judgment by the Supreme Court. The ruling effectively overturns the High Court decision, which had found in favour of the NaCC, declaring as illegal and asking NAMAF members to cease the practice of benchmarking tariff structures through the association of medical funds. NaCC, in its initial court application, had said it was convinced that NAMAF and its medical aid fund members were operating like a cartel by annually convening to agree beforehand on medical aid tariffs to charge consumers. This, the NaCC contended, was in violation of the country’s competition laws. On appeal, the Supreme Court found that whilst medical aid funds are businesses in the form of enterprises and are statutorily enjoined to apply sound business principles in their operations, this is to protect their members’ interests by ensuring the solvency of funds. “Being a ‘business’ did not mean that a fund’s economic activity is market-related for the purpose of achieving a gain or reward. The Medical Aid Funds Act precluded funds from distributing a surplus and rendered them non-profit concerns. “The social solidarity nature of funds in the context of the protective legislation governing and tightly regulating them and the statutory purpose of promoting funds meant that funds are not businesses carried on for gain or reward for the purpose of the definition of undertaking in the Act, which was also considered in the context of the purpose of the Act to promote and safeguard competition to provide consumers with competitive prices and product choices,” read the judgment. NAMAF, established under the Medical Aid Funds Act of 1995, and medical aid funds registered under the MAF Act, applied to the High Court for an order declaring that they are not undertakings, as contemplated by the Act and that the NaCC consequently has no jurisdiction over them. The Commission had conducted an investigation under the MAF Act and notified NAMAF and the funds that their conduct in setting prices for medical services by setting benchmark tariffs after collective negotiations amounted to a contravention of Namibia’s competition laws, which prohibit concerted practices between undertakings, which directly or indirectly fix purchase or setting prices. NAMAF and the funds contended that they are not undertakings, as defined in the Act, because they do not carry on business for gain or reward, as is presupposed by the definition in the Act. They also maintained that they were precluded by the MAF Act from distributing profits to fund members, or anyone else. They further held that the setting of benchmark tariffs was designed to achieve a non-commercial socio-economic objective, thus excluding that activity from the Act. NAMAF further argued that the issue of benchmark tariffs was authorised by the MAF Act and as a result excluded from the jurisdiction of the NaCC. The NaCC disputed these contentions and opposed the application. The High Court rejected each of the arguments and dismissed the application. It found that the funds fell within the definition of undertaking in the Act. The High Court referred to the definition of a medical aid fund in the MAF Act, which states that a fund is a business, and found that a fund operates for gain or reward, even if its profits are not distributed. The High Court also found that the activity of utilising a benchmark tariff is not excluded from the stipulations of the Act.
2017-07-20 10:07:20 1 years ago