Enforcement Against Cartels in South African Competition Law : advantages and challenges

Abstract

Cartels have been manipulating economies for centuries and over the years many jurisdictions have fashioned mechanisms to combat cartel activity. In South Africa, the Competition Commission concedes that cartel activity does not only impede economic growth, but it is also harmful to the welfare of consumers as it leads to price increase, limits the consumer’s choice of product and leads to poor quality of products. It is for this reason that the Competition Commission has implemented the Corporate Leniency Policy to detect sophisticated and secretive cartels. The Competition Commission through its Corporate Leniency has been successful in detecting a number of cartels which were secretive and would not have otherwise been detected without the Policy. In enforcing stringent penalties for cartel participants, the South African legislature introduced criminal sanctions for directors or officers in management authority who cause or acquiesce in cartel participation. While this development in competition law is welcomed by some with both hands but it has been criticized by many. The focus of this research therefore, is to give an insight on how the introduction of criminal sanctions can be implemented in a way that will not erode the effectiveness of the Corporate Leniency Policy which is a successful tool utilized by the Competition Commission to detect cartels. Comparison will be made to Australia which is a jurisdiction that has a successful Leniency Policy framework and has also introduced criminal sanctions to punish cartel participants. This research then will conclude by making recommendations on how the introduction of criminal sanction must be introduced to work hand in hand with the Corporate Leniency Policy and taking the successes of other jurisdictions.