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Directors beware! Antitrust criminal liability arrives in South Africa

31 August 2009 Paul Coetser, Werksmans Incorporating Jan S. de Villiers

The Competition Amendment Act, No 1 of 2009 has now been signed by the President and will shortly be published in the Government Gazette. This is despite persistent calls for the President to refer it to the Constitutional Court.

The Amendment Act brings with it the most far-reaching amendments to South African competition law since the Competition Act became effective ten years ago. The amendments will introduce the following noteworthy provisions:

• criminal liability for a director or a person having "management authority" where he/she either caused a firm to engage in a prohibited practice in terms of section 4(1)(b) of the Competition Act or knowingly acquiesced in the firm engaging in such conduct. A sentence of up to ten years' imprisonment or a fine not exceeding R500 000 can be imposed against each person convicted;
• the creation of a prohibited practice of "complex monopoly" conduct by two or more sizeable firms in a concentrated market which conduct their affairs in a conscious parallel or co-ordinated manner without agreement between or among themselves;
• the ability of the Competition Commission to conduct a formal enquiry into the general state of competition within particular markets. The Commission will have the power to summon any person believed to be able to furnish any information in respect of the enquiry to appear before the Commission for interrogation or to deliver any documents.

The exact date on which the Amendment Act will come into operation is not yet known; it is still to be fixed by proclamation by the President. The date will be an important one for directors and managers because from that date they become vulnerable to criminal prosecution if their companies are found to be involved in price-fixing, market division or bid rigging.
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