Competition's bite sharpens

Business as usual as Manoim takes over tribunal and Mastercard and Visa probed.

The Competition Commission is serious about rooting out cartels and making sure that not even fools rush in where angels fear to tread.

Since the beginning of the year, the commission has launched more than ten investigations (see table) into various cartels. The commission initiated six cases in 2006/07 and ten in 2007/08 compared with 23 in 2008/09. New chairperson of the Competition Tribunal Norman Manoim told Moneyweb Radio, "One of the big things that has changed has been this commission's leniency policy which affects cartels."

This basically means that the first guy in the room who squeals gets off, as long as he tells on the others. "That has brought a whole lot of new cases through," he added. Nandi Mokoena, manager of strategy & stakeholder relations said, "While we cannot answer for the parties who lodge complaints with the commission, it is likely that a combination of factors lead to such an increase."

"For example, there is more awareness of the commission's work therefore more parties provide information to the commission," she added. Competition matters are being addressed more vigilantly by the commission ensuring an environment for fair competition and that consumers are protected.

Manoim said, "Our job is not to make it easier for people who are breaking the law, so we'll carry on business as usual."

Although the number of cartels being investigated has increased significantly, Mokoena said the commission also includes advocacy. This means it educates business about their rights and obligations in terms of the Competition Act, "we want businesses to comply". So the commission is not in the business of catching businesses out but getting them to comply.

Moreover, the commission has been making specific efforts to intervene in its priority sectors - with sector studies and advocacy. Hence the increase in the number of initiations, Mokoena added.

Manoim also told Moneyweb Radio  that the commission has got a number of cases but quite a lot of these cases actually get settled at commission level, and it's just a matter for the Competition Tribunal to supervise a consent order.

He explains that this means that people enter a plea and do a plea bargain. In other words they say: "Look, we'll plead guilty and we'll agree to this remedy." And it's then taken to the tribunal to see if that is a fair remedy in those circumstances; that obviates the need for going to trial. "It means the matter can be settled within a morning."

"To give another perspective though, that doesn't mean that every case that is being investigated is going to find a conviction at the end of the day," said Manoim.

According to Manoim, the tribunal is gathering momentum in the sense that it is getting more experience in running the procedures in the institution and how it should work. "Our biggest challenge at the moment is to hear cases more quickly. They are taking too long to get from where a complaint is lodged to finality," said Manoim.  He continued to say that it doesn't matter whether someone is eventually going to be found guilty or not or acquitted. "If cases are taking too long it's got an adverse effect on the market."

These have varied from price fixing in the bread industry to bike cartels that have gone bust.

Here is a look at the progress of the cases that have been initiated this year.

 
Write to Khosie Thom: khosie@moneyweb.co.za

 [K1]The original amount was R188 010 00 which was 6% of total turnover but the fine was increased to 8% after Sasol admitted fully to contravening Section 4(1)(b) of the Competition Act and identified additional related conduct that goes to the heart of the Commission's collusion case in the Nutri-Flo referral.

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