CompetENS : A Comprehensive Overview
Why does competition law matter?
Look at the size of some of the significant competition law penalties: |
||
|---|---|---|
| 2004 | Commission v Toyota South Africa Motors | R12 million |
| 2005 | Commission v South African Airways | R15 million |
| 2006 | Commission v South African Airways | R45 million |
| 2006 | Commission v South African Airways, SA Express Airways | R20 million |
| 2007 | Commission v Mittal Steel South Africa and others | R693 million |
| 2007 | Commission v Tiger Consumer Brands | R98 million |
| 2007 | Commission v Food Corp | R45.4 million |
| 2008 | Commission v Adcock Ingram Critical Care and Tiger Brands | R53.5 million |
| 2008 | Commission v New Reclamation Group | R146 million |
| 2009 | Commission v Sasol Chemical Industries | R1 billion |
| 2010 | Commission v Pioneer Foods | R1 billion |
| 2011 | Commission v Aveng (Africa) t/a Steeledale | R128.9 million |
| 2012 | Commission v Singapore Airlines | R25.1 million |
| 2012 | Commission v Lafarge Industries South Africa | R148.7 million |
| 2012 | Commission v South African Airways | R18.8 million |
| 2012 | Commission v Telkom SA | R449 million |
| 2013 | Commission v 15 construction companies | R1.5 billion |
| 2014 | Commission v B & E International (Pty) Ltd | R8 158 447 |
| 2014 | Commission v British Airways PLC | R21 765 297 |
| 2014 | Commission v ATC (Pty) Ltd | R80 737 050 |
| 2014 | Commission v Cargolux International SA | US$ 941 561 |
| 2014 | Commission v Columbus Stainless (Pty) Ltd | R32 576 835 |
| 2015 | Commission v SA Metal Group (Pty) Ltd | R22 340 000 |
| 2015 | Commission v Wallenius Wilhelmsen Logistics AS | R95 696 529 |
| 2015 | Commission v Nippon Yusen Kabushiki Kaish | R103 977 927 |
| 2015 | Commission v Copper Tubing Africa (Pty) Ltd | R8 000 000 |
| 2015 | Commission v Murray and Roberts Ltd | R64 141 798 |
| 2015 | Commission v Compania Sud Americana de Vapores SA | R8 813 227 |
| 2016 | Commission v Life Healthcare Group (Pty) Ltd; Joint Medical Holdings Ltd | R10 000 000 |
| 2016 | Commission v Eukor Car Carriers Inc | R15 288 976 |
More than R5 billion in total!
That’s why it matters!
Competition law is designed to:
- Increase consumer choice
- Decrease price
Companies are required to capture market share and generate margins through innovation, value add to customers, enhanced services and vigorous competition and not through:
- Co-ordination with competitors;
- Arrangements with suppliers which prevent competition by others;
- Customer interaction which excludes other competitors; and
- Abuse of market power and/or market dominance.
Innovation, cost reduction, enhanced services and other value-adds can achieve increased profitability in a lawful competitive manner.
Competition policy today is best described as follows:
- The competition authorities are not afraid to use their powers;
- There is a very strong anti-cartel focus (price-fixing, market division, bid rigging) and this spills over into merger investigations;
- More sophisticated data gathering and use of economics;
- High impact penalties;
- Government intervention, particularly in mergers;
- Competition Amendment Act, No. 1 of 2009 sees, amongst others, the introduction of powers to convene market enquires and threatens the introduction of personal criminal liability;
- The Competition Commission has been focussed on its identified ‘priority sectors’, which include food, healthcare, manufacturing;
- The activities of the competition authorities have a strong policy and social focus.
Benefits of Compliance |
High cost of non-compliance |
|---|---|
| Doing business ethically | Reputational damage |
| Reputational advantages | Prosecutions |
| No prosecutions | Penalties |
| No fines | Management time and effort in dealing with investigations and/or prosecutions |
| Agreements struck down | |
| Claims for damages by third parties |
This programme will provide an introduction to:
- Cartels
- Whistle blowing (Corporate Leniency)
- Other interaction with competitors
- Minimum Resale Price Maintenance
- Other interaction with customers and suppliers
- Dominance
- Exclusionary Acts
- Refusals to deal
- Buying up scarce inputs
- Price discrimination
- Document creation
There will be a quiz at the end of some of the modules to evaluate what you have learned
Course Modules to Complete
Cartels
There are 3 categories of cartel offences :
- Price fixing and fixing trading terms;
- Dividing markets; and
- Bid rigging
Whistle Blowing
The Competition Commission runs a corporate leniency policy in terms of which a party which has been engaged in cartel conduct can come forward and admit guilt.
Start Course ModuleOther Interaction with Competitors
When parties that are supposed to compete vigorously land up in “cozy” relationships, competition and competitive dynamics are often compromised.
Start Course ModuleMinimum Resale Price Maintenance
Minimum resale price maintenance is the practice of requiring a product to be sold by a retailer at a fixed minimum price.
Start Course ModuleOther Interaction with Customers and Suppliers
What this means is that agreements between customers and suppliers are not permitted to have the effect of keeping others from entering or expanding within the market of either the customer or the supplier unless the parties to the agreement can show that the technological, efficient or pro-competitive gains of the agreement outweigh the anti-competitive effect.
Start Course ModuleDominance
There is an additional burden placed on dominant firms because as market participants with large market shares these companies are able to significantly affect competitive conditions. Companies with smaller market shares are allowed to do some things which dominant companies may not.
Start Course ModuleDocument Creation
E-mails and other forms of electronic communication have resulted in far quicker, less considered communication. These seemingly innocuous communications often result in high penalties, so we have prepared some tips regarding what to avoid.
Start Course Module