Bell Dewar recently presented a paper
co-authored by Neil Mackenzie and Stephen Langbridge at the Fourth
Annual Conference on Competition Law, Economics and Policy in South
Africa hosted by the Competition Commission, Competition Tribunal
and Mandela Institute.
Based on the Competition Tribunal's decision in Competition
Commission / Pioneer Foods, a cartel subsists when
contact between competitors results in the concurrence of
wills between the conspiring firms and behaviour in the
market gives effect to the parties intentions.
The paper examines the standard of proof required to show that
participation in a cartel agreement stopped from a particular date.
This is relevant in two circumstances: where a firm raises a
defence of prescription under section 67(1) of the Act, and in
determining 'duration' of a firm's participation in the
cartel for purposes of calculating the relevant penalty.
In particular, the paper deals with the complex situation which
arises when a cartel formaly ceases to operate but coordinated
patterns of behavior in the industry continue.
The Pioneer Foods case established the following guiding principles
to determine when cartel conduct has ceased:
The averment by participants in the cartel that a particular
agreement has ceased is insufficient. Positive evidence of that
fact is required.
In the case of market division (which was the aspect of the
cartel which Pioneer Foods alleged had prescribed), evidence of
re-entry into markets which the firm withdrew from as a result of
the cartel agreement was required.
Until re-entry has taken place, the parties continue to benefit
from the effect of the agreement. Therefore, while the effect of
the agreement continues to be felt, the contravention continues to
exist for purposes of section 4.
This issue may have significant implications for firms in
concentrated markets where firms may have behaved in a coordinated
If found guilty of contravening section 4(1)(b) of the Act, firms
may face an administrative penalty of up to 10% of annual turnover
and in future directors may be exposed to criminal liability.
The Competition Commission recently found a dual distribution restraint to amount to a market allocation agreement between competitors, which is outright unlawful under the Competition Act, 89 of 1998.
Sub-Saharan Africa is primed for an era of sustainable growth. As other markets across Latin America and Asia face short-term challenges and many advanced economies decelerate, the outlook remains encouraging for sub-Saharan Africa to gather speed and create greater opportunities for its rapidly growing population.
Previous updates summarised the main provisions of the United Arab Emirates Federal Competition Law (Federal Law No. (4) of 2012) which came into force on 23 February 2013.
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