Redress for victims of cartel activity

Abstract

It is well known amongst competition law experts that public enforcement of competition law, i.e. administrative penalties for competition law infringements, alone is not enough. Consequently, private damages claims play a crucial role in promoting and maintaining competition in a market. This suggests a need for interaction between public and private enforcement of competition law.

Cartel activities, in terms of section 4(1)(b) of South Africa s Competition Act, are considered by competition law experts to be the most egregious of anti-competitive activities. When taking this into account, it is clear to see the need for a method which cartel victims can use to claim compensation for the harm they had to endure because of the competition law infringements.

Section 65 of South Africa s Competition Act sets out the requirements, which must be met before a private damages action can be pursued in a civil court, as well as the procedure in this regard. Class actions play a very important role as its advantages provide indigent victims in a cartelised market the opportunity to institute their private damages claims. South Africa s Competition Act is silent on the matter of locus standi regarding a damages claim. There is no legal certainty regarding the issue of which type of claim, either delictual or statutory, the injured party has in terms of section 65. Nevertheless the Children s Resource Centre-case provides a few useful insights regarding the nature of the cause of action. In order to address some problem areas regarding private damages claims the European Commission published a Green Paper, White Paper and Draft Directive. Because South Africa s competition law is largely based on the European Union s competition law principles, guidance will be obtained from the European Commission s initiatives regarding the issue of locus standi as well as other problem areas. Leniency programmes are very effective in the uncovering of cartel activities which is why it plays a crucial role in the process of claiming for damages. It is important to note that the immunity offered by South Africa s Corporate Leniency Policy does not cover civil liability towards victims and that civil damages claims in turn affect the Corporate Leniency Policy in such a way that the effectiveness of the policy gets jeopardised. Guidance on how to solve these problems will be obtained from the European Union s Draft Directive which addresses the issue by regulating access to documents and protecting a leniency applicant.