News > Commercial Law
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 The Competition Commission is celebrating its 10th anniversary later this year. It has reason to celebrate, as it has ensured that the Competition Act has become a central point in the South African commercial landscape. A number of cases have enjoyed prominence in the media and the Commission is steadily increasing its enforcement capacity. Compliance with the Act has steadily moved up on the agendas of board meetings as failure to comply could deliver a destructive blow to any company’s reputation and financial position. To read more on this topic see: Competition law breaches are a corporate governance risk. |
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 It does not happen very often, but sometimes, in the enforcement of competition law, complex jargon is used to describe particular anti competitive conduct or a particular approach to the interpretation and application of competition law. First, it was the concept of “bright lines” used in the context of mergers and acquisitions which had competition law practitioners and clients alike slightly confused as to the exact meaning thereof. Just recently, the term “super dominance” was used in relation to excessive pricing in the matter of Mittal Steel South Africa and others v Harmony Gold Mining Company Limited and others. Prior to the use of the term “super dominance” the writer was under the impression that once a firm was dominant it was dominant - no “super powers” were attributable to the firm. |
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 On 1 April 2009 the increased merger thresholds, issued by the Minister of Trade and Industry, came into effect (See our newsflash “Increase in merger thresholds”). The increase in thresholds has the effect that a number of mergers which would previously be classified as intermediate or large mergers will now be classified as small mergers and will therefore no longer require mandatory notification. The move to increase merger thresholds was met with approval by business. The Competition Commission has, however, raised concerns that certain anti-competitive mergers could now escape regulatory scrutiny. In an effort to address these concerns the Commission has issued a Guideline on Small Merger Notifications which indicates that the Commission will require notification of all small mergers between parties that meet certain criteria. (Read more) |
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 Signed into law by former President Kgalema Motlanthe on the 24th April and gazetted on 29 April 2009, the Consumer Protection Act 68 of 2008 (“the Act”), is now officially law. The Act will only come into full force and effect in 18 months after promulgation, namely on 29 October 2010, as per the transitional provisions. This is to allow sufficient time for the establishment of the National Consumer Commission, an enforcement /investigative body on consumer protection issues, which it is anticipated, will be established after 12 months from the date of signing of the Bill by the former President. The National Consumer Commission will commence implementation of the Act on 29 October 2010. The Act replaces, in a new and simplified manner, existing provisions from a number of Acts, but most notably, the following five Acts: the Consumer Affairs (Unfair Business Practices) Act of 1988, Trade Practices Act of 1976, Sales and Service Matters Act of 1964, Price Control Act of 1964, and Merchandise Marks Act of 1941 (specifically Sections 2-13, and 16-17). Furthermore, the Minister must still publish all the required Regulations within 12 months of promulgation of the Act. |
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 Act not yet in force The long-awaited new Companies Act has now been signed. The President assented to the Act on 8 April 2009 and the final version was published in the Government Gazette on 9 April 2009. The Act is called the Companies Act, 2008 and will replace the current 1973 version. Although the new Act has been signed and published, it is not yet in force. It will only take effect on a date announced by the President in the Government Gazette. However, that date may not be earlier that one year following the date on which the President signed the Act. Accordingly, the Act will not come into force before 9 April 2010. However, it is expected that the effective date will only be in the second half of 2010 in order for regulations to be put into place and for CIPRO to make the necessary preparations. |
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 The Minister of Trade and Industry has issued Government Notices 215/2009 and 216/2009 containing: 1. A new determination of merger thresholds and method of calculation. 2. A new fee structure for the filing of a merger notice. In terms of the new thresholds a merger will be notifiable as an intermediate merger if the turnover and/or asset value of the target firm is at least R80 million (currently R30 million), and the combined assets and/or turnover of the acquiring and target firms meets or exceeds R560 million (currently R200 million). |
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 The Competition Commission has announced that it has issued a summons against two bicycle retailers, Fritz Pienaar of Fritz Pienaar Cycles and Andrew Mclean of Cycle Lab. According to the Competition Commission it is in possession of minutes of a meeting between the bicycle evidencing an attempt to collusively increase margins on bicycles (35%-50%) and bicycle accessories (50% - 75%). |
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 The large fine recently imposed by the Competition Commission for price fixing has emphasised the need for companies to be proactive in complying with competition law. The Competition Commission imposed a R46.3 million fine on listed construction and engineering company Aveng, in accordance with a consent agreement. The agreement is subject to approval by the Competition Tribunal. |
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 Finance Minister Trevor Manuel delivered the Budget speech on 11 February 2009. Here we note some of the tax issues that may affect businesses and individuals. |
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 Patent litigation in South Africa often forms part of a global patent litigation strategy where corresponding patents in jurisdictions such as the US and Europe are also in play. The patentee may decide to settle the litigation on a global basis, resulting in the litigation being withdrawn in South Africa too. But patentees should make sure the settlement agreement complies with the Competition Act. In the pharmaceutical sector, the parties sometimes agree that in return for the patentee’s withdrawal of an action for infringement against a generic company, the generic company will launch a competing generic product only a few years after the patentee’s patent expires. This essentially extends the exclusivity of the patentee in respect of its product beyond the life of the patent. |
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 Directors and persons in "management authority" can breathe a sigh of relief as the Competition Amendment Bill (the Bill) has been sent back to the drawing board (the National Assembly) by President Kgalema Motlanthe amidst concerns that the Bill may be unconstitutional. The Bill aims, inter alia, at criminalizing the conduct of such persons in causing their firms to conduct their affairs in an anticompetitive manner. The Bill also extends to instances wherein such persons knowingly acquiesce to such conduct. |
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Developments contained in the Competition Amendment Bill (B31D-2008) have emphasised the importance of complying with competition law as part of corporate governance and risk management. |
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After conducting an internal investigation petrochemical giant Sasol has decided to approach the Competition Commission to come clean on possible transgressions of the Competition Act. The move has been welcomed by analysts who are of the view that Sasol is taking the moral high ground, no doubt hard on the heals of the hefty fine recently imposed on Sasol by the European Competition Commission. |
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 Overview of the Consumer Protection Bill, 2008 The Consumer Protection Bill is intended to promote and advance the social and economic welfare of consumers in South Africa, essentially by protecting consumers’ rights against exploitation by business, and in the process empowering consumers. Widely welcomed by trade and consumer publics, the general feel is that it will benefit consumers, albeit also to encourage them to become more consumer effective. How will the new Bill apply in practice? |
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 Adams & Adams has appointed Danie Strachan as a senior associate in the firm’s Commercial Law section in Pretoria. Strachan specialises in general commercial and corporate law, and is an admitted attorney and notary public as well as a qualified trade mark practitioner. |
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The firm practises directly in several Southern African countries and through long-established associates in others.
