Towards a fair and efficient economy for all

Background

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• Policy review initiated by the dti in 2006

• Public outcry against anticompetitive practices eg. bread cartel

• Government’s commitment to strengthening the competition authorities

• Competition Amendment Act assented to on 28 August 2009

• Not yet in force. Date to be fixed by the President by proclamation in the Gazette

Key timelines

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Salient steps Date

DTI competition policy review document finalised 30 June 2007

Competition Amendment Bill introduced to parliament 4 June 2008

First Portfolio Committee report on the Bill 14 August 2008

Second consideration of the report by the Portfolio Committee 21 August 2008

Select committee report for consideration by the NCOP 1 September 2008

NCOP consideration of the report 25 September 2008

Second round consideration of the report 21 October 2008

National Assembly approval 21 October 2008

Sent to President for assent Date unknown

President returned the Bill to parliament citing constitutional issues from reverse onus

27 January 2009

National Assembly moved to have the Bill passed without amendments, notwithstanding the President’s reservations on constitutionality

18 February 2009

Bill re-sent to the President Date unknown

President assented to the Bill 28 August 2009

Promulgated into law Not yet announced

Key amendments

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• Complex monopolies

• Criminalization of cartel conduct

• Corporate leniency policy

• Market enquiries

• Jurisdiction in markets subject to sector specific regulations

Complex monopolies

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• Opportunity to investigate concentrated sectors where specific anti-competitive conduct is not clearly discernible

• Investigation of concentrated markets prone to conscious parallel conduct: 75% of the goods / services supplied to, or by, five or fewer firms; any two or more of these firms conduct business in a conscious parallel or co-

ordinated manner, without agreement; and such conduct has the effect of substantially preventing or lessening competition in

that market

• Commission may apply to Tribunal for declaratory order against two or more firms, if and only if:

one of the firms involved has at least 20% of the relevant market; and the complex monopoly has resulted to high entry barriers, exclusion of other firms,

excessive pricing, refusal to supply goods or services, or other market characteristics that indicate coordinated conduct.

• Firms may raise pro-competitive, efficiency and technological defences 

Criminalization of cartel conduct

Towards a fair and efficient economy for all

• Targets the director of a firm or a person with management authority who caused or knowingly acquiesced to the firm’s collusive conduct

• Liable for a fine not exceeding R500 000 and/or 10 yrs imprisonment

• A firm may not pay the fine on behalf of an individual

• The NPA will be responsible for criminal prosecution

• Role of Commission: Commission may certify person as deserving of leniency Commission may not seek or request prosecution of person certified as deserving of

leniency Commission may make submission to NPA in support of leniency of person certified

as deserving of leniency

• Criminal prosecution can only proceed if the firm has acknowledged cartel conduct or the courts have made a finding of cartel conduct

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Market enquiries

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• Amendment provides Commission may use investigative powers to inquire into markets if it has reason to believe that competition is prevented, restricted or distorted

• The Minister can request a formal market inquiry

• Upon completion of enquiry, Commission

must submit a report to the Minister with/without recommendations may initiate a complaint may refer complaint to the Competition Tribunal for adjudication

Concurrent jurisdiction

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• Amendment clarifies concurrent jurisdiction between the competition authorities and other sector regulators

• Gives primary authority to competition authorities to investigate anti-competitive conduct

• Inconsistencies between the Electronic Communications Act and Competition Act

• ECA assumed full jurisdiction over the electronic communications sector

• Offending clause since been amended to confirm jurisdiction of the Competition Act

• Addresses forum shopping

Challenges of the Amendment Act

Towards a fair and efficient economy for all

• Legal challenges on constitutional grounds

• Co-ordination with the NPA

• Technical economic and sector expertise required

• Drafting of regulations to be finalised

• Resource constraints

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Thank you!

Tel: 0123943332Fax:0123944332

email: shanr@compcom.co.za

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