Competition law increasingly relevant
26/06/2009

The Competition Commission is celebrating its 10-year anniversary later this year. It has reason to celebrate as there is consensus that the commission has ensured that the Competition Act (“the Act”) has become a central point in the South African commercial landscape. A number of high-profile 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 do so 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.

The Act has far-reaching implications far beyond the obvious transgressions relating to price fixing and collusion. The Act, for example, deals with all agreements between competitors and could have an impact on the terms of settling a dispute. For a case in point, see Patentees beware of anticompetitive settlements.

From a deal planning perspective, approval by the Competition Commission of a proposed transaction is often the last hurdle. The minister of trade and industry has recently announced an increase in merger thresholds which has been welcomed by business. The Competition Commission has, however, placed a damper on the excitement by issuing a Guideline on the Notification of Small Mergers which will have far-reaching effects for clients. To read more on this issue, the Competition Commission’s Guideline on Small Merger Notifications (downloadable PDF) has important implications.

Companies cannot ignore the existence of the Act anymore and would be well advised to deal proactively with the Act through training at different levels of the organisation, reviewing all commercial relationships and agreements, and acting in a diligent manner not only to avoid transgressions but to ensure that the company enjoys protection from competitors who are transgressing the Competition Act.

Adams & Adams has been involved with the Competition Act since its drafting stages and is in a position to advise clients on all aspects of competition law.

Should you require information or advice on the Competition Act, or if you would like our competition law team to address your board or management on the Act, you are welcome to contact any of us directly or send an e-mail to competitionlaw@adamsadams.co.za.
Jac Marais
Associate Jac-m@adamsadams.co.za
or
Alexis Apostolidis
Partner Alexis-a@adamsadams.co.za