The processes central to competition regulation are not as easy as many would assume. Partly, this is because competition law is specialised and requires specialist litigation and/or an enforcement strategy that safeguards the interests not only of consumers but also of businesses, investors and policymakers alike. As a regulator, the Competition Commission of SA is guided by the Competition Act 89 of 1998, as amended, which also outlines the legal processes that we and other stakeholders can follow in the execution of our mandate.
Readers might often have seen reports in the media that the commission has referred a complaint to the competition tribunal for prosecution. Before I joined the commission, I had no idea what “referring a complaint” meant and what the next legal steps were. And when I pen these educational instalments of our work, my only hope is for readers to better understand our mandate, its complexities and, more importantly, its ability to change lives.
First, let me remind readers that the commission is the investigative and prosecutorial authority that investigates complaints regarding anti-competitive conduct, which it can refer to the competition tribunal for prosecution. In line with the Competition Act, the tribunal can impose a maximum penalty of 10% of a firm’s annual turnover. In this regard, the commission acts as the “prosecutor” before the competition tribunal (“the court”).
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For example, in December the commission announced that it had referred a complaint against eight cargo shipping companies to the tribunal for prosecution. Referring a complaint to the tribunal means that the commission has filed what is called a “referral affidavit”. There is usually a confidential and a non-confidential version of the referral affidavit available upon request.
In its referral affidavit the commission will, among others, describe the alleged anti-competitive conduct it has identified, list the sections of the Competition Act that have been contravened, and explain the penalty it seeks from the tribunal. The firm or firms implicated in the commission’s referral affidavit then have 20 working days to file what is called their “answering affidavits”. Thereafter, the commission will file its replying affidavit, the pleadings are closed, and pre-trial steps, including the discovery and filing of witness statements, will follow.
Only then is a date set for the trial at the tribunal. Throughout all these stages of litigation, firms or “respondents” might opt to settle the matter with the commission, meaning they would like to avoid a hearing, reduce legal costs, and agree to put measures in place to prevent further contravention(s) of the Competition Act.
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