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  • Criminal prosecution for cartel conduct effective from 1 May 2016

Criminal prosecution for cartel conduct effective from 1 May 2016


Johannesburg, 16 Aug 2016

On 1 May 2016, the provisions of the Competition Amendment Act 1 of 2009 (Competition Amendment Act), which criminalises cartel conduct, came into effect. The provisions do not apply retrospectively, that is, to cartel conduct engaged in before 1 May 2016.

Section 73A of the Competition Amendment Act states that a director or manager of a firm commits an offence if he/she caused the firm to fix prices, allocate markets or collusively tender, or knowingly acquiesced in the firm engaging in these prohibited restrictive horizontal practices. In this context, "knowingly acquiesced" means having acquiesced while having actual knowledge of the firm's prohibited conduct. A director or manager found to be in contravention of section 73A is liable to imprisonment for up to 10 years or a fine of R500 000 or both.

Notably, the most controversial sub-sections of section 73A of the Competition Amendment Act have not been brought into effect. Subsection (5) of section 73A provides that an acknowledgement in a consent order by the firm or a finding by the competition authorities that the firm engaged in a prohibited restrictive horizontal practice is prima facie proof that the conduct occurred in the criminal proceedings. Subsection (6) of section 73A prevents a firm (directly or indirectly) paying the fine of a person convicted under section 73A, or indemnifying, reimbursing, compensating or otherwise defraying the expenses of a person incurred in defending the prosecution of such an alleged offence, unless the prosecution is abandoned or the person acquitted.

Section 50 of the Competition Act 89 of 1998 (Competition Act) has also not been brought into effect. Section 50 provides that at any time after receiving or initiating a complaint, the Competition Commission (Commission) may certify that any person contemplated in section 73A is deserving of leniency. It is unclear if or when these provisions will come into effect. We note that nothing in section 50 directly or indirectly establishes any right of a person to be certified as deserving of leniency. Although the National Prosecuting Authority (NPA) may take the commission's submissions into consideration, any certificate of leniency issued by the commission is not binding on the NPA. Only the National Director of Public Prosecutions can decide whether or not to prosecute an individual.

It is expected that additional amendments to the Competition Act are to be introduced during the course of this year.

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