South Africa empowered to initiate market inquiries

Published On 14/03/2013 | By Kim de Kock | Enforcement, Litigation, Reform

On Friday 8 March 2013, it was announced in the Government Gazette that legislative provisions providing the South African Competition Commission (Commission) with formal powers to conduct market inquiries will become effective on 1 April 2013.

The enactment of the provisions has been welcomed by the Commission as it enables the Commission to conduct formal inquiries into the general state of competition in a market, without necessarily referring to the conduct or activities of any particular participant within the market.

The provisions will allow the Commission to initiate an inquiry of its own accord or in response to a request from the Minister, if the Commission has reason to believe that any feature of the market prevents, distorts or restricts competition in any way.

The Commission will have more focused investigatory powers than it previously had.  Currently, the Competition Act, 89 of 1998 does not provide for market inquiries.  Rather, the Commission has had to rely on its general functions which are fairly limited in comparison to the new powers.  For example, in 2009, the Commission relied on its general powers as well as the voluntary participation of market participants for purposes of an inquiry into the Banking sector.  In contrast, the new powers will enable the Commission to issue summons to compel persons to appear before an inquiry and compel the giving of evidence under oath that may have a bearing on the subject matter of the inquiry.

Further, the Commission previously had no explicit power to act on any information arising from an inquiry or on recommendations that it made in concluding an inquiry.  Under the amendment, the Commission will be able to initiate a complaint, refer that complaint to the Competition Tribunal or enter into consent orders with persons against whom complaints are initiated.

The powers to compel persons to appear before an inquiry and compel the giving of evidence under oath are similar in nature to those that the ACCC has under section 155 of the Competition & Consumer Act (Act).  Under section 155, if the ACCC has reason to believe that a person is capable of furnishing information or providing evidence or documents in relation to a matter that may constitute a contravention of the Act, it can by notice compulsorily compel that person to furnish the relevant information or documents and appear before the ACCC to give evidence under oath.

Photo credit: arboresce / Foter.com / CC BY-SA 

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About The Author

is a Senior Associate in the Sydney office of King & Wood Mallesons where she specialises in anti-trust law, with a focus on mergers and acquisitions, access matters as well as general competition issues. Outside of the office, Kim has recently taken up surfing... but is probably not going to be appearing on the ASP tour any time soon.

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