The South African Corporate Leniency Policy as a legal instrument in the fight against anti-competitive behaviour

Abstract

Cartels are regarded as the most egregious of all competition law contraventions because of the harm they inflict on consumer welfare. To add insult to injury cartel enforcement is notoriously difficult because of the secretive nature of cartels. The traditional investigative tools provided by competition law has proved to be inadequate in exposing and prosecuting cartels because these measures can only be applied effectively once a cartel is detected. Thus competition law enforcement agencies have devised an innovative tool to aid in the war against cartels. This tool is the concept of a leniency policy which incentives cartel members to self-report in an attempt to obtain immunity from competition law prosecution. South Africa has not lagged behind in the war against cartels and has soon after the introduction of the Competition Act decided to adopt the Corporate Leniency Policy. Since its inception the CLP has been increasingly effective in assisting the Commission to detect and break up cartels. However 2016 has eventually seen the introduction of the notorious ?cartel offence? (also featured in various established competition jurisdictions) which holds directors and managers criminally liable for causing firms to participate in a cartel or knowingly acquiescing in such conduct. The introduction of this offence poses various problems which have the potential to significantly erode the efficiency of the CLP. This dissertation therefore attempts to highlight the salient features of the CLP and how it incentivizes self-reporting by cartel members and also how it facilitates the leniency process in the interest of competition and consumer welfare. It subsequently considers the cartel offence and problems occasioned by the introduction of such offence and its interaction with the CLP. In the final instances some conclusions are drawn and recommendations are made regarding the best way forward.