Thursday, September 15, 2011

The fight against cartels: an evaluation of the current and prospective legislative framework for combating cartels in South Africa.
The recent exposure of extensive cartel activity throughout the South African market in the motor, bread, milling, milk, tyre and pharmaceutical industries has sparked a sense of outrage amongst various groups including the competition authorities, consumers and even trade unions. The sense of injustice is only heightened when the services or products in question are not considered luxury commodities, but rather basic needs or consumables. The ongoing level of prohibited cartel activity in the South African market might suggest that the legislative framework and punitive measures currently in force are not serving as a sufficient deterrent to curb anti-competitive conduct.
What is a cartel?
A cartel is “an association by agreement (which would include an understanding [or concerted practice]) between competing firms [or firms in a horizontal relationship] to engage in price fixing, division or allocation of markets, and/or collusive tendering”. Cartel activity occurs when people of the same trade or competitors decide to co-operate with one another, rather than to compete. 

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