Commercial Law

 

 

 

The Commission will investigate collusive tendering amongst firms who submit tenders and this includes and is not limited to agreements amongst competing tenderors to rotate bids, fix prices and engage in cover pricing.

Proactive compliance is key. This includes:

  • Developing and implementing a Competition Law Compliance Program tailored to your business.
  • Providing regular training to employees on competition law risks.
  • Conducting periodic competition law risk assessments and audits.
  • Seeking legal advice from Aucamp Attorneys on potentially risky business practices or agreements before implementing them.

You can easily contact Aucamp Attorneys through our website, by phone, or by email to schedule a confidential consultation. We are ready to discuss your specific Competition Law needs and provide expert legal guidance.

You have rights during a Competition Commission investigation, including the right to legal representation, the right to a fair process, and the right to challenge the Commission's findings. Aucamp Attorneys can advise you on your rights and ensure they are protected throughout the investigation process.

Price fixing is an agreement between competitors to artificially inflate, fix, or control prices, rather than allowing prices to be determined by free market competition. It's illegal because it harms consumers by eliminating price competition and can lead to inflated prices and reduced choice.

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Competition Law in South Africa 

What is South African Competition Law? 

South Africa's Competition Law aims to create a level playing field for businesses and benefit consumers by encouraging healthy competition.  The key piece of legislation, the Competition Act of 1998, put in place the Competition Commission, Competition Tribunal, and Competition Appeal Court to make sure this happens.

This law stops businesses from engaging in anti-competitive actions like agreeing to fix prices or working together to limit competition. It also oversees mergers between companies to prevent monopolies. While similar to competition laws in other countries, South African law also emphasizes public interest goals.

This means it looks beyond just competition to consider how business practices affect small businesses, workers, and Black Economic Empowerment in South Africa. Aucamp Attorneys offers specialized legal expertise to help you understand, comply with, and strategically leverage South African Competition Law to protect your business and ensure fair competition within your industry.

 Why is Competition Law Important for Your Business? 

Compliance is Not Optional, adhering to Competition Law is a legal requirement for all businesses operating in South Africa, regardless of size.

Benefits of Compliance

  • Avoid Penalties Highlight the significant fines and other sanctions for non-compliance (e.g., administrative penalties, divestiture orders, director disqualification).
  • Reputational Protection Maintaining ethical business practices and avoiding negative publicity associated with competition law breaches.
  • Sustainable Business Growth Fair competition fosters innovation and long-term market stability.
  • Legal Certainty Understanding and complying with the law provides clarity and reduces legal risks.

Risks of Non-Compliance

  • Substantial Fines Mention the potential for hefty fines (up to 10% of annual turnover in some cases).
  • Reputational Damage Highlight the negative impact on brand image and customer trust.
  • Legal Action Possibility of investigations, dawn raids, and proceedings before the Competition Commission and Tribunal.
  • Operational Disruption Investigations and legal battles can disrupt business operations and management focus.
     

​​​​​​Key Areas of South African Competition Law: What Businesses Need to Know

  • A. Prohibited Practices
  • Horizontal Restraints (Agreements between Competitors)
    • Definition Agreements or concerted practices between competitors that harm competition.
    • Examples Price-fixing, market division, collusive tendering (bid-rigging).
    • "What to do" Emphasize the absolute prohibition of these practices. Internal training, compliance programs, clear guidelines against competitor collusion.
  • Vertical Restraints (Agreements between Suppliers & Customers)
    • Definition Agreements between businesses at different levels of the supply chain that can restrict competition.
    • Examples Resale price maintenance (setting minimum prices), exclusive distribution that harms competition, tying arrangements.
    • "What to do" Review distribution agreements, pricing policies, and assess potential anti-competitive effects. Seek legal advice to ensure compliance.
    • Abuse of Dominance
      • Definition When a dominant firm engages in conduct that harms competition. Dominance is generally defined as holding a large market share.
      • Example: Excessive pricing, predatory pricing (pricing below cost to eliminate competitors), exclusionary conduct (refusing to supply or dealing on discriminatory terms).
      • "What to do" Dominant firms need to be particularly careful. Review pricing strategies, trading terms, and conduct towards competitors and customers. Legal counsel is crucial for dominant firms.
  • B. Merger Control
    • Definition Regulation of mergers and acquisitions to prevent those that substantially lessen or prevent competition.
    • Merger Notification Thresholds Briefly mention that mergers exceeding certain thresholds must be notified to the Competition Commission. (Could link to a separate page or resource with more detail on thresholds if desired, or mention Aucamp Attorneys can advise on thresholds).
    • Merger Assessment Explain that the Competition Commission assesses mergers based on their potential impact on competition (market concentration, barriers to entry, etc.).
    • Merger Approval, Conditional Approval, or Prohibition 

"What to do" Businesses involved in mergers or acquisitions should:

  • Early Assessment Assess if the merger triggers notification requirements.
  • Legal Advice Seek legal counsel early in the merger process to navigate notification, prepare submissions, and manage potential competition concerns.
  • Merger Filings Prepare and submit merger notifications to the Competition Commission.
     

What to Do If You Suspect a Competition Law Violation (or are Under Investigation)

A. If You Suspect a Violation (Internal or by Competitor) 

  • Internal Review & Investigation Initiate an internal review to assess the situation objectively.
  • Seek Legal Counsel Immediately Contact Aucamp Attorneys for urgent legal advice. Do not attempt to investigate or address the matter without legal guidance.
  • Preserve Evidence Safeguard all relevant documents and electronic data.
  • Confidentiality Maintain confidentiality during the internal review and legal consultation process.
  • Consider Leniency (if applicable) If your company is involved in a cartel, leniency programs offer reduced penalties for reporting the cartel to the Competition Commission (first to apply often gets the most leniency). Legal advice is essential to assess leniency options.

B. If You Are Under Investigation by the Competition Commission ("Dawn Raid") 

  • Remain Calm and Cooperative (but Know Your Rights) Be polite and cooperate with inspectors, but understand your rights.
  • Immediately Contact Aucamp Attorneys Crucial to have legal counsel present during a dawn raid.
  • Verify Inspectors' Authorization Check their warrant/authorization carefully.
  • Limit Scope of Inspection (to Warrant) Inspectors can only search within the scope of their warrant.
  • Do Not Obstruct, But Do Not Volunteer Information Beyond Scope Answer questions directly related to the warrant but avoid volunteering extra information.
  • Document Everything Keep detailed records of the inspection process, documents seized, questions asked, etc.
  • Internal Communication Protocol Have a pre-established internal protocol for dawn raids.
     

How the Competition Law Process Works in South Africa (Brief Overview)

  • The Competition Commission
     
    • Investigative Body Responsible for investigating alleged anti-competitive conduct and mergers.
    • Enforcement Powers Can issue compliance notices, negotiate settlements, refer cases to the Competition Tribunal for adjudication.
    • Leniency Program Administers the leniency program for cartel whistleblowers.
       
  • The Competition Tribunal​​​​​
     
    • Adjudicative Body Independent body that adjudicates competition law cases referred by the Competition Commission.
    • Hearing and Decision-Making Conducts hearings, considers evidence, and makes rulings on prohibited practices and mergers.
    • Remedies and Penalties Can impose administrative penalties, order divestiture, prohibit mergers, etc.
       
  • The Competition Appeal Court
    • Appellate Body Hears appeals against decisions of the Competition Tribunal.
    • Judicial Review Provides judicial oversight of competition law decisions.

How Aucamp Attorneys Can Help Your Business with Competition Law 

  • Expert Legal Advice Provide strategic advice on all aspects of Competition Law compliance.
  • Compliance Programs Develop and implement tailored competition law compliance programs, including training for staff.
  • Risk Assessments & Audits Conduct competition law risk assessments and audits to identify potential areas of concern.
  • Merger Notifications & Filings Assist with merger analysis, preparing and submitting merger notifications to the Competition Commission, and managing the merger review process.
  • Representation in Investigations & Litigation Provide expert legal representation during Competition Commission investigations, dawn raids, Competition Tribunal hearings, and Competition Appeal Court proceedings.
  • Leniency Applications Advise and assist clients considering leniency applications.
  • Training & Workshops Conduct workshops and training sessions for businesses on Competition Law compliance.

Let Aucamp Attorneys Be Your Competition Law Advantage - Contact us for a consulation today