Project on Competition Law
Enforcement and Governance:
Comparative Institutions:
SOUTH AFRICA
Dennis Davis and Lara Granville
OVERVIEW
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History
Institutional Design
Mandate
Complaint procedure
Opportunity to be heard
Appeals
Adequate notice of evidence relied on
Proportionality of remedies
HISTORY
• Natural resources
• Effects of Apartheid
• Polarised Economy
• End of Apartheid
INSTITUTIONAL DESIGN
• Bifurcated Model with elements of Bifurcated
Judicial Model
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Competition Act, 1998
Competition Commission
Competition Tribunal
Competition Appeal Court
Supreme Court of Appeal
MANDATE
• Objects
– To provide for markets in which consumers have access to, and can freely
select, the quality and variety of goods and services they desire;
– To restrain particular trade practices which undermine a competitive
economy;
– To promote the efficiency, adaptability and development of the economy;
– To ensure that all South Africans, including small and medium size
enterprises, have an equitable opportunity to participate in the economy;
– To increase the ownership stakes of historically disadvantaged persons; and
– To promote employment and advance the social and economic welfare of
South Africans.
DUE PROCESS NORMS
• Complaint Procedure
• Opportunity to be heard and full notice of
allegations
– Judicialization of Tribunal process
– Woodlands Case
DUE PROCESS NORMS
– Woodlands Case
“what the SCA has succeeded in doing is impose the much tougher
standards of criminal prosecutions on the competition authorities. In doing
so it has set a standard of legality that is inappropriate for a competition
enquiry.’
‘people with deep pockets have more access to the courts. If respondents
in competition cases believe they can delay the outcome by pursuing
technical legal points, then they will’.
T “The chief beneficiary of the SCA ruling is the legal profession. The ruling
provides scope for lawyers to generate even more legal fees as cartel
cases get clogged up in technical legal challenges”
DUE PROCESS NORMS
– Omnia Case
– Loungefoam Case
‘all that the Commission needs to demonstrate,… is that there is enough
content in the act of initiation to make a cognizable or rational link with a
subsequent referral. It cannot be expected to know at the stage of initiation
what the process of investigation will reveal.’
– Bicycles case
DUE PROCESS NORMS
• Adequate Notice of Evidence to be Relied On
– Omnia and SAB cases
– Mittal/Cape Gate: requests for leniency
application and annexed documents
‘agreements on prices between the respondents reached by telephone, emails
and so forth… [E]vidence, of the correspondence, discussions and meetings,
will be presented at the hearing’
DUE PROCESS NORMS
• Proportionality of Remedies to violations
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the nature, duration, gravity and extent of the contravention;
the loss or damage suffered as a result of the contravention;
the behaviour of the respondent;
the market circumstances in which the contravention took place;
the level of profit derived from the contravention;
the degree to which the respondent has co-operated with the
Competition Commission and the Competition Tribunal; and
– whether the respondent has previously been found in contravention
of the Act.
OUTLINE
• Institutional Performance Norms
– Timelines
– Expertise
– Powers
– Predictability, transparency and consultation
• Critical Evaluation
– Success
– Trade-offs
INSTITUTIONAL PERFORMANCE NORMS
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Timelines
– Mergers
– Complaints
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Expertise in determinations
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Predictability, transparency and consultation
INSTITUTIONAL PERFORMANCE NORMS
• Powers to investigate and sanction
– Commission
– Tribunal
• interdicting any prohibited practice;
• ordering a party to supply or distribute goods or services to another party
on terms reasonably required to end a prohibited practice;
• ordering divestiture;
• declaring the conduct of a firm to be a prohibited practice;
• declaring the whole or any part of an agreement to be void;
• ordering access to an essential facility on terms reasonably required; and
• condone non-compliance with Commission or Tribunal rules.
CRITICAL EVALUATION
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Successful so far…
Trade-offs
Institutional structure
The Tribunal to make better use of its
flexibility