Competition law compliance: what businesses need to know

The Competition Act 89 of 1998 is the primary statute governing competition in South Africa. It prohibits anti-competitive conduct, regulates mergers above certain thresholds, and establishes the Competition Commission, Competition Tribunal and Competition Appeal Court.

The Act's core prohibitions fall into two categories: restrictive practices (horizontal and vertical) and abuse of dominance. Restrictive horizontal practices include agreements between competitors to fix prices, divide markets, or collude on tendering. Abuse of dominance occurs where a firm with market power engages in exclusionary or exploitative conduct.

Merger notification is required where a transaction meets defined financial thresholds. Small mergers generally do not require notification, while intermediate and large mergers must be notified to the Commission before implementation. Failing to notify a notifiable merger can result in penalties and the transaction being declared void.

The Commission also operates a corporate leniency policy, which may offer immunity or reduced penalties to firms that self-report cartel conduct and cooperate with investigations. The availability of leniency depends on the timing of self-reporting and the firm's position in the alleged cartel.