South Africa: Cartels criminalised in South Africa


For the first time in South Africa, directors and managers will face jail time for participation in a cartel. Amendments to the Competition Act which introduce personal criminal liability for cartel conduct came into effect from 1 May 2016.

The amendment introduces criminal liability for directors and individuals with 'management authority' who are responsible for - or knowingly acquiesce in - cartel conduct. Cartel conduct includes the direct or indirect fixing of prices (including purchase prices) and trading conditions, market division, and collusive tendering among competitors or potential competitors. All members of the management chain (not only directors) are potentially at risk of prosecution.

An individual can only be charged if the company involved has already been found to have contravened the cartel provisions by the Competition Tribunal, or it has admitted a contravention in a formal consent order. The vast majority of cartel cases investigated by the Competition Commission in South Africa to date have been resolved through consent agreements. This development means that firms accused of engaging in cartel conduct will have to think more carefully before admitting to a contravention to settle a case for commercial reasons.

It is intended that individuals will be able to apply for leniency from the competition authorities the same way that companies currently can. The current policy allows only the firm "first through the door" to be granted immunity from an administrative penalty if it can provide sufficient information to enable the Competition Commission to successfully prosecute other firms for cartel conduct. It is therefore not clear whether an individual can be granted leniency if the firm they work or worked for has not applied for leniency. Amendments are required to the Competition Commission's Corporate Leniency Policy to cater for this development. Because enforcement of this offence will be handled by the Department of Public Prosecutions and the criminal courts, immunity from the competition authorities may not be enough to shield managers from prosecutions. The amendment does provide that the Competition Commission may make submissions to the National Prosecuting Authority that an individual should not be prosecuted when the Commission views that individual as "deserving of leniency".

The Competition Commission is in the process of negotiating a memorandum of understanding with the National Prosecuting Authority to determine how the criminal prosecution of these offences will be handled, including the leniency regime. There is some suggestion that the Competition Commission will ramp up its internal capabilities and work collaboratively with the National Prosecuting Authority on the criminal aspect of cartel investigations as is done in some other jurisdictions with both civil and criminal consequences for collusive conduct. Notably however, the competition authorities are subject to a strict confidentiality regime. In circumstances where individuals are interrogated by the Competition Commission as part of the investigation, nothing they say may be used against them in criminal proceedings. Accordingly the practical implementation of the criminal provisions and the scope of cooperation between the National Prosecuting Authority and the competition authorities will need to be carefully determined.

At the time that the amendments were signed, concerns were raised about whether the criminal provisions are in line with the South African Constitution, and particularly whether they uphold an accused's right to be considered innocent until proven guilty. However, those parts of the amendments which caused the greatest concern have not been brought into effect (including those which state that a finding of the Tribunal of cartel conduct or a consent order constitutes proof for the purposes of the criminal prosecution that the company engaged in cartel conduct). The amendments preventing companies from paying fines or legal fees of their Directors and employees criminally charged also have not been brought into effect. However, the constitutionality of the criminal provisions may still be raised as a defence by anyone charged under the new law.

The criminal provisions will not have retrospective effect. It remains to be tested whether a cartel initiated before 1 May 2016 but with ongoing effects after that date could land its participants in jail. Anyone engaging in cartel conduct should desist immediately.

The Competition Act applies to any conduct having an economic effect in South Africa, which means that even if collusive arrangements are entered into offshore (if there is an effect in South Africa) foreign individuals who are present in South Africa could also face criminal prosecution.

What should companies and their directors do to protect themselves against these increased risks? Recommendations include:

  • Take advice on any conduct that may be cartel activity and stop any conduct that is.
  • The implementation of a suitable competition law compliance programme.
  • Development of robust monitoring and reporting procedures so as to establish an early warning system for leniency applications.
  • A regular internal review of all agreements and practices of your business, particularly in the context of industry associations where staff interact with competitors.
  • Take advice on any submissions to be made to the Competition Authorities, even in the context of a merger investigation.
  • Roll-out of training providing guidance to any South African operations on how to react in the event of a dawn raid - search and seizure proceedings are increasingly a favourite weapon in the Competition Commission's arsenal.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions