Beware the crouching tiger: Competition Compliance 
by Roxanne Ker
The Competition Act 89 of 1998 has been in force for over ten years, yet many firms still conduct their business in contravention of the Act, whether knowingly or unknowingly. This is becoming progressively more dangerous for a number of reasons:
the Competition Commission is becoming more proficient at investigating anti-competitive behaviour and prosecuting offenders before the Competition Tribunal; the consequences for non-compliance can be quite severe, leading to large penalties being levied of up to 10% of the total annual turnover of the company concerned, parent/holding companies potentially liable for infringements by subsidiary entities; reputational harm being suffered by the firm and its the entire group, if applicable, and now, with the coming into effect of the Amendment Act, directors, managers and employees can be held criminally liable.
We have found that while certain forms of anti-competitive behaviour like price fixing is a more obvious contravention, in some cases it is less apparent as to what may constitute anti-competitive behaviour. As the consequences for non-compliance can be harsh, it is important for directors, managers and employees to be trained to understand the provisions of the Act and how to apply them to their businesses.
Apart from training, we have found that formulating and implementing a competition compliance policy which provides guidelines in the form of do’s and don’ts specific to your business can be extremely helpful in guiding managers and employees on a practical day-to-day level in complying with Competition Law. Where there is any behaviour, whether intended, current or past, which you suspect might contravene the Act, consult your attorneys.
Lastly, conducting a competition compliance audit can assist firms in identifying any areas of the business where there is a contravention of Competition Law or where there is a danger that the law may be contravened. You may not realize that a practice may be anti-competitive. |
