Most Read Contributor in South Africa, September 2016
A judgment just handed down by the Supreme Court of Appeal
appears to have opened the door to a somewhat more permissive
approach regarding the initiation, investigation and referral of
complaint proceedings by the Competition Commission.
In the case of Competition Commission v Yara (South Africa)
(Pty) Ltd, an appeal of a decision of the Competition Appeal
Court, the SCA unanimously affirmed not only that the Commission is
entitled to informally initiate a complaint in terms of section
49B(1) of the Competition Act, but that an initiation made by the
Commission can also be made tacitly.
In terms of the Competition Act, a formal complaint can be
initiated either by the Commission or a private complainant by way
of the completion of a statutory Form CC1, detailing the alleged
anti-competitive conduct as well as the parties alleged to have
engaged in such conduct. The court's decision in Yara
confirmed, however, that where the anti-competitive conduct alleged
in a private complainant's complaint has been expanded upon by
the Commission to include allegations of additional
anti-competitive conduct in its subsequent referral to the
Tribunal, the Commission can be understood to have initiated
further informal or tacit complaints, incorporating the additional
anti-competitive conduct not initially contemplated in the original
complaint. The determination as to whether a tacit or informal
initiation has taken place would, according to the court, be a
question of the most likely inference drawn from all of the facts
During the infancy of competition law enforcement in South
Africa, the Commission and private complainants initiated
complaints in respect of alleged prohibited practices in broad
terms, often without specifically naming or detailing the firms
suspected of involvement and/or without specifying their alleged
contraventions. However, a number of decisions in both the CAC and
SCA handed down prior to the SCA's decision in Yara,
(including the Glaxo, Woodlands and Loungefoam
cases, as well as the previous CAC decision concerning
Yara), appeared to have taken a more formalistic approach
to the procedural requirements to which the Commission must adhere
in order to validly initiate and refer complaints, effectively
requiring initiating documents to conform to prescribed standards
not dissimilar to those applicable to formal pleadings.
The Yara judgment would appear, therefore, to reflect
something of a reversion by the SCA towards the handling and
interpretation of initiation and complaint proceedings in terms of
section 49B of the Competition Act. The SCA's judgement allows
far greater flexibility to the Commission to add to complaints new
causes of action through the initiation (informally or tacitly) of
additional complaints, and looks to a far more nuanced
interpretation of the Competition Act. This, we presume, is
designed to better give effect to the purpose of the Competition
Act, although, in our view, this same outcome could well have been
achieved if the Commission had followed the very simple formal
So we find ourselves flung back into a rather more uncertain
world. What will be sufficient to comprise an
'informal' or 'tacit' complaint initiation?
Will the Commissioner lying in the bath thinking about a potential
contravention be enough? Or will something more be required?
And what evidence will be needed to prove the fact of such informal
or tacit initiation and the date on which it occurred? What
effect will this have on prescription (which is calculated with
reference to the effluxion of time between the cessation of
contravening conduct and the date of initiation of a
The door is certainly now wide open to the continuation of the
saga of the complaint initiation and referral process litigation
which has become so much a part of our competition law
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