Competition Law Part 1 Flashcards
What is competition?
-Competition: exists when firms fight to outbid and undercut each other to win the business of the customer
-There will be no competition if there are no competitors
-For competition to exists: goods or services offered by different traders must be the same or be be substitutes for each other
When does competition exist according to the **Lorimar Productions Inc v Sterling Clothing Manufacturers ** case?
Competition exists whenever there is potential for the diversion of trade from one business to another
How does one define the market?
> who are the different traders?
what types of goods and service are in the market?
what are the similarity of products?
What are the policy reasons for the regulation of competition in SA?
-Government regulation has proved that the market won’t self-correct
-imperfect markets will lead to collusion, exploitation of consumers, exclusion of competitors and concentration of economic power in the hands of a few and unequal resource allocation in society
-forces firms to innovate and improve their efficiency, leads to better prices for consumers, leads to improvement in product/service variety and quality.
What is the common law of competition?
- Part of Private Law (Law of Delict): in all actions against unlawful competition - all elements of delict must be proved
- Limited focus: focuses more on removing unfairness in the competitive process and ensuring that a party who suffers loss or damage due to unfair/unlawful competition is compensated. Functions through the normal court process
- A significant part of the common law of competition is already regulated by other legislation
What is statutory competition law?
- Functions as part of Public Law (Administrative Law)
- Enforced by specialist competition agencies
- Has broad scope and mandate: promoting and maintaining competition, job creation, economic transformation and development
Competition Act
What does sec3(1) of the CA provide for regarding its application?
-The Act applies to all “economic activity within, or having an effect within”, the Republic
Competition Act
What did the Standard Bank Investment Corporation vCompetition Commission case state regarding the meaning of economic activity?
**Economic activity **- “of great generality to include countless forms of activities which people may undertake in order to earn a living”.
Competition Act
Whhat is meant by economic activity having an effect in South Africa according to the ANSAC v Competition Commision case?
Competition Act
Which activities under sec 3(1) of the CA does the Act not apply to?
- collective bargaining within the meaning of section 23 of the Constitution, and the Labour Relations Act, 1995;
- a collective agreement, as defined in section 213 of the Labour Relations Act, 1995; and
- concerted conduct designed to achieve a non-commercial socioeconomic objective or similar purpose
Included in this are government decisions as tehy are not economic activities
Concurrent Jurisdiction
What is meant by the competition Act having concurrent jurisdiction according to sec 3(1A)?
-Sec 3(1A) provides that the Competition Act wull apply with other legislation at the time
-Section 3(1A) The manner in which concurrent jurisdiction between the Comp Act + another applicable statute is to be exercised must be managed in accordance with any applicable agreement that may be concluded between the Competition Commission and another regulatory authorities.
-Competition Comission concludes Memorandums of Understanding with other regulatory authorities to regulate matters that it shares concurrent jurisdiction with
Competition Act Institutions
What is the competition commision?
-The Comp Comm is an administrative and investigative body tasked with the application and enforcement of the Competition Act and has jurisdiction throughout the Republic
-Sec 21 provides for main functions:
> investigate possible contraventions of the Act
>review intermediate and large mergers; >refer competition contraventions and large merger notifications to the Competition Tribunal for adjudication; >negotiate and reach consent/settlement agreements with firm subject to investigations involving allegations of contravention of the Act
Competition ACt Institutions
What are the functions of the Competition Tribunal?
The main functions of the Competition Tribunal are:
* To adjudicate on any conduct prohibited in terms of Chapter 2 of the Act and to determine whether any prohibited conduct has occurred, and, if so, to impose any remedy provided for in the Act
* to adjudicate on large mergers
* and to hear appeals from, or review any decision of, the Competition Commission
*
Competition Act Institutions
What powers does the competition appeal court have?
**Has status similar that of a High Court and has jurisdiction throughout South Africa. **
- It may review, or consider appeals against, any decision of the Competition Tribunal.
- may give any judgment or make any order, including an order confirming, amending or setting aside any order or decision of the Competition Tribunal or remitting the matter back to the Tribunal for further hearing.
Prohibited Practices
What is a horizontal relationship in competition law?
Horizontal Practices
between parties in the same level of the supply chain or Competitors
