Car­tels in sights of au­thor­i­ties

Le­niency pol­icy a way out for firms of­fer­ing full dis­clo­sure over col­lu­sion

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW - HEATHER IRVINE

LAST year was an­other record­break­ing year for the South African com­pe­ti­tion au­thor­i­ties and more strin­gent com­pe­ti­tion law en­force­ment is ex­pected in 2016. The se­ri­ous po­ten­tial con­se­quences of an­ti­com­pet­i­tive con­duct for com­pa­nies and ex­ec­u­tives makes it im­per­a­tive that com­pli­ance with com­pe­ti­tion law is made a pri­or­ity.

The Com­pe­ti­tion Com­mis­sion’s fo­cus re­mains firmly on the de­tec­tion and pros­e­cu­tion of car­tels and the com­mis­sion ex­e­cuted a num­ber of dawn raids in 2015 on com­pa­nies al­leged to have been in­volved in col­lu­sion with com­peti­tors. In Oc­to­ber, the com­mis­sion searched the of­fices of sup­pli­ers of liq­ue­fied pe­tro­leum gas and cylin­ders, as well as the LPG As­so­ci­a­tion.

This fol­lowed a raid at the end of Septem­ber on four fur­ni­ture re­moval com­pa­nies, and an­other in midSeptem­ber on the of­fices of three re­cruit­ment ad­ver­tis­ing agen­cies in Gaut­eng. In March, the com­mis­sion raided the of­fices of six sup­pli­ers of fire con­trol and pro­tec­tion sys­tem com­pa­nies. This high­lights the need for com­pa­nies to have a com­pre­hen­sive plan to deal with a search and seizure op­er­a­tion at their premises.

In May, Com­mis­sioner Tem­binkosi Bon­akele ini­ti­ated a ma­jor in­ves­ti­ga­tion into col­lu­sion by traders in cur­rency pairs in­volv­ing the rand via elec­tronic mes­sag­ing plat­forms, fol­low­ing sim­i­lar in­ves­ti­ga­tions in the US and Europe in­volv­ing the fix­ing of forex rates and Li­bor. The in­ves­ti­ga­tion is still on­go­ing.

The com­mis­sion con­cluded in­ves­ti­ga­tions into a num­ber of car­tel cases and re­ferred com­plaints to the Com­pe­ti­tion Tri­bunal for ad­ju­di­ca­tion in re­la­tion to al­leged price-fix­ing in the con­struc­tion, fur­ni­ture re­moval, mo­tor ve­hi­cle re­pair, cu­rio re­tail­ing, plas­tic pipe and ce­ment in­dus­tries.

This in­cluded the most re­cent case be­ing in­ves­ti­gated by the com­mis­sion as part of its “fast-track set­tle­ment” process re­gard­ing bid-rig­ging in the con­struc­tion sec­tor, which re­lates to the N17 link road be­tween New Canada and Soc­cer City (N17 pro­ject).

Many of th­ese com­plaint re­fer­rals in­volved an ap­pli­ca­tion for le­niency by a car­tel in­sider in terms of the com­mis­sion’s cor­po­rate le­niency pol­icy

The Com­pe­ti­tion Ap­peal Court dis­missed the com­mis­sion’s com­plaint against Sa­sol Chem­i­cal In­dus­tries about al­leged ex­ces­sive poly­mer pric­ing and in Novem­ber, the Con­sti­tu­tional Court ruled that it will not hear the com­mis­sion’s ap­peal against this de­ci­sion.

The Com­pe­ti­tion Tri­bunal ruled that Me­dia24 had en­gaged in an “ex­clu­sion­ary act” in terms of sec­tion 8(c) of the Com­pe­ti­tion Act, by run­ning one of its com­mu­nity pub­li­ca­tions, Goud­veld Fo­rum, at a loss to elim­i­nate a ri­val com­mu­nity news­pa­per in the Free State town of Welkom be­tween 2004 and 2009.

The tri­bunal has yet to de­cide on an ap­pro­pri­ate rem­edy in this case.

An im­por­tant fo­cus for the com­mis­sion in 2016 is likely to be its mar­ket in­quiries into the health­care, liq­uid pe­tro­leum gas and gro­cery retail sec­tors. Sec­tion 6 of the 2009 Com­pe­ti­tion Amend­ment Act, which em­pow­ers the com­mis­sion to con­duct mar­ket in­quiries, was brought into ef­fect in 2013.

The com­mis­sion has ex­tended the pe­riod for com­ple­tion of the health­care in­quiry to De­cem­ber 2016 and has pub­lished draft terms of ref­er­ence for com­ment in the gro­cery in­quiry.

Pic­ture: iSTOCK

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