Competition Law Part 6

Question 1

What are the objectives of the Competition Amendment Act?

Answer 1

a)To promote the objectives of the Competition Act by:
-Opening up economy to more investment, development of SMEs & black-owned business.
-Create opportunity for SMEs to compete fairly.
-Larger focus on effect of anti-competitive conduct on SMEs & firms owned or controlled by historically disadvantaged persons

b)Strengthen public interest objectives of economic transformation & inclusion by tackling high levels of economic concentration

c)To provide competition authorities with more powers and tools to investigate & address high levels of economic concentration

d)Align competition decisions with other government public policies, programs and interests.

e)Provide the national executive with effective means of participating in competition related proceedings.

f)Advance greater certainty through new definitions & guidelines.

Question 2

How does the Competition Amendment Act regulate abuse of dominance?

Answer 2

The Amendment Act now clarifies what predatory prices are prices for goods or services below the firm’s average avoidable cost or average variable cost.

This strengthens application of s8(1)(d)(iv) by outlining clearer economic test.
Margin squeeze: is now expressly provided for as a prohibited act.

Question 3

What are the remedies that the CAA provides for first time offenders?

Answer 3

First Time offenders
Ousting of yellow card provision under s 59(1)b: the Comp authorities may now impose an administrative penalty for a first time offence.
Rule of reason provisions can now attract an administrative penalty where firm is found guilty for 1st time conduct e.g s4(1),s5(1)

Question 4

What are the remedies that the CAA provides for repeat offenders?

Answer 4

Tougher penalties for Repeat Offenders
s59(2A)

An administrative penalty imposed may not exceed 25 per cent of the firm’s annual turnover in the Republic and its exports from the Republic during the firm’s preceding financial year if the conduct is substantially a repeat by the same firm of conduct previously found by the Competition Tribunal to be a prohibited practice.

Question 5

What are the CAA remedies for controlling companis taht engage in offences?

Answer 5

S59(3A): The Competition Tribunal may— (a) increase the administrative penalty referred to in subsections (2) and (2A) to include the turnover of any firm or firms that control the respondent, where the controlling firm or firms knew or should reasonably have known that the respondent was engaging in the prohibited conduct; the controlling firm or firms be jointly and severally liable for the payment of the administrative penalty imposed