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n Stellenbosch Law Review = Stellenbosch Regstydskrif - The introduction of a "cartel offence" into South African law

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Abstract

The Competition Amendment Act 1 of 2009 inserts section 73A into the Competition Act 89 of 1998. Although the Competition Amendment Act has been assented to by the President, it has at the time of writing not been brought into effect. Section 73A introduces criminal sanctions for infringements of section 4(1)(b) of the Competition Act by directors, or persons occupying positions of management authority within a firm. Section 4(1)(b) of the Act relates only to "hardcore" restrictions of competition by cartels, namely, price-fixing, collusive tendering and market sharing.


The introduction of criminal sanctions in South Africa for cartel offences follows the trend in other jurisdictions to criminalise cartel conduct. The United States and, more recently, the United Kingdom and Australia are examples of developed economies with criminal sanctions directed against individuals who are responsible for involving firms under their control in cartels. The introduction of criminal sanctions is based, in part, on recognition of how important competitive markets are in capitalist economies for the maximisation of consumer welfare and, in part, on the apparent inability of administrative fines to serve as an effective deterrent to cartelisation.
In this paper the author begins by addressing the normative question of whether criminal sanctions are appropriate in the context of competition law before moving on to a brief summary of the formulation and operation of the cartel offence in the United Kingdom. Finally, the author analyses section 73A in its present form by highlighting certain weaknesses inherent in its approach to criminalisation that may negatively impact on enforcement, as well as noting certain aspects of the section that may present difficulties for the authorities in securing convictions.

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/content/ju_slr/21/2/EJC54742
2010-01-01
2016-12-02
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