Friday, September 16, 2011

Upping the ante: administrative penalties after southern pipeline contractors and conrite walls (Pty) Ltd / competition commission
On 4 August 2011, the Competition Appeal Court (“CAC”) delivered judgment in an important case concerning the imposition of administrative penalties by the Competition Tribunal (“Tribunal”) on firms that are guilty of the worst of competition law contraventions: the hard-core cartel behaviour of price fixing, market allocation or bid-rigging.
If recent media reports about Julius Malema’s influence over the awarding of tenders are to be believed, the case should be of great interest to him.
The CAC’s decision is a welcome attempt to bring clarity to an area which has caused confusion. Unfortunately, the judgment ultimately fails to provide a clear answer to the question which needed answering: How are the penalties to be calculated? Nevertheless, the decision has expensive consequences for businesses guilty of competition law contraventions. The financial risks of entering into a cartel, or failing to uncover and report it to the Competition Commission (“Commission”) have become even greater – particularly for cartels that endure for a number of years.

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