Controversial Competition Amendment Bill signed into law
31/08/2009

President Jacob Zuma has signed the Competition Amendment Bill into law.

From the operative date, it will be a criminal offence in terms of the Competition Amendment Act (the Act) for a director or a manager of a firm to cause the firm to engage in cartel conduct, or to knowingly acquiesce in the firm’s involvement in cartel conduct.

Directors and managers found guilty of these provisions could face imprisonment of up to 10 years, or a fine of up to R500 000, or both a fine and imprisonment.

The Act will not operate retrospectively and the operative date is at this stage uncertain.

The Act is designed to sharpen the teeth of the competition authorities by extending their investigative powers and introducing heftier sanctions for contraventions of the Act.

A number of the provisions of Act will almost certainly be tested in the Constitutional Court and it is feared that this could lead to undesired delays. The cloud of uncertainty surrounding the Act could also scare potential whistleblowers into silence for fear of prosecution.

What is however certain is that, more than ever, companies, directors and managers will have to take proactive steps to ensure that companies’ conduct does not fall foul of the Act and specifically those prohibitions which could attract criminal liability.

Jac Marais
Senior Associate
Jac-M@adamsadams.co.za

and

Alexis Apostolidis
Partner
Alexis-A@adamsadams.co.za