Competition among firms is a central feature in all free market economies such as South Africa. One of the biggest threats to competition is the presence of cartels in markets. Cartels are firms which collude and compete unfairly in order to obtain monopoly-like profits. For more than fifty years South Africa’s economic landscape has been dominated by a vast network of cartels invital industries, such as bread, cement and fertiliser. South Africa promulgated the Competition Act 89 of 1998 to eradicate cartels and promote and maintain competition within the South African economy. The Competition Act 89 of 1998 prohibits cartel activity and provides for a fine of 10% of turn over for firms found to have engaged in cartel activity. For a variety of reasons, these administrative fines have failed to deter firms from commencing and/or continuing to engage in cartel activity. This is evidenced by the increasing number of firms engaged in large -scale cartels in essential industries, such as construction and food. Public outcry and global trends have persuaded legislators to enactment more stringent penalties in the Competition Amendment Act 1 of 2009. Section 12 of the Competition Amendment Act , which inserts section 73A, creates a cartel of fence in terms of which a director who causes his firm to engage in cartel activity faces ten year imprisonment or a fine of R500, 000. This research shall critically analyse the Competition Amendment Acts effect on deterring cartel activity in South Africa. Despite the legislators’ aim to provide a bigger deterrent for engaging in cartel activity, section 73A of the Competition Amendment Act arouses scrutiny. Firstly, the promulgation of the new cartel offence is contrary to the decimalisation trend in South African company law which recognises the difficulty in enforcing complex regulatory offences with criminal provisions. Secondly, Section 73(5)A appears to infringe an accused director's right to be presumed innocent. Lastly there are co-ordination issues between the National Prosecuting Authority and the Corporate Leniency Policy relating to the granting of prose cutorial immunity for firms which cooperate with the Competition Commission. There search will out line these problems in full. With regards to the problems caused by section 73A, the research will use a comparative analysis with the positionin the United States. Of all the jurisdictions which criminalise cartel activity, the United States was one of the earliest and the most prolific insecuring convictions for directors who cause their firms to engage in cartel activity. The United States has taken innovative steps to supplement their public cartel enforcement drive such as the prosecution of international cartels and the use of private actions. In this regard, the research will extrapolate favourable cartel enforcement measures from the United States for recommendation in order to assist with South Africa’s cartel enforcement and alleviate the problems caused by section 73A, outlined above.

Thesis (MBA)--Stellenbosch University, 2001. / ENGLISH ABSTRACT: The recent enactment of the Competition Act 89 of 1998, has resulted in a world of speculation and discussion. The reason seems to be that the previously 'protected' monopolies who were allowed to continue with business without fear of retribution, have now been stopped in their tracks with the new legislation. South African legal application and protection has been rather one sided in previous years with specific reference to the protection of minorities. This was exasperated by the political and economical situation in South Africa in the eighties. Sanctions led to consolidation of companies and industries, because companies were not allowed to take money of the country. This had a negative result on the competitive situation and the little guys had to survive on the dregs. The new Act is based on the American anti-trust legislation as well as the competition law of the European Union. It is therefore of utmost importance to take note of this international law with specific reference to the interpretation of the Competition Act due to the fact that the Act is so recent. The Competition Act expressly provides for the use of foreign law in the interpretation of the Act. This project is not a comparative study between current competition legislation available in the world. It purports to be a more user friendly guide to business people to make the Act more useful and understandable. The project focuses on some helpful hints to assist the reader with interpretation and application. The project gives a short description of the development of competition legislation in South Africa in Chapter 2. Chapter 3 is a discussion on the main sections of the Act that deal with prohibited practices, dominant position, mergers and remedies and enforcement. A few examples are given of uncompetitive behaviour. Chapter 4 deals with the helpful hints and illustrates thresholds as determined in section 11, with the help of diagrams, it also lists a few helpful references of handy resources. The project ends off with a short conclusion. / AFRIKAANSE OPSOMMING: Die onlangse inwerkingtreding van die Wet op Mededinging 89 van 1998, het 'n wêreld van spekulasie en bespreking ontketen. Die rede hiervoor is dat die voorheen "beskermde monopolieë" tot op hede kon voortgaan met besigheid sonder stoornis, hierdie stuk wetgewing het hulle egter nou tot halt geroep. Suid-Afrikaanse regswerking en -beskerming was in die vorige jare van regering effens eensydig met betrekking tot beskerming van minderhede. Die verskynsel is aangehelp deur die politieke en ekonomiese situasie waarin SA homself bevind het in die tagtigerjare. Sanksies het gely tot konsolidasie van maatskappye en industrieë, aangesien firmas nie geld uit die land mag geneem het nie. Die resultaat hiervan was monopolieë en konglomerate. Hierdie verskynsel het negatief ingewerk op kompeterende ekonomiese toestande, en die "kleiner outjies" moes die krummels van die tafel af eet. Die nuwe stuk wetgewing is gebasseer op die Amerikaanse "anti-trust" wetgewing sowel as die kompetisie wetgewing van die Europese Unie. Dit is noodsaaklik om kennis te neem van hierdie Internasionale wetgewing, veral in terme van die interprestasie van die Wet op Mededinging, siende dat ons eie wetgwing baie resent is. Die Wet maak ook daarvoor voorsiening dat Internasionale reg in ag geneem moet word vir interpretasie van enige van die artikels van die Wet. Hierdie werkstuk is nie 'n vergelykende studie tussen die bestaande wetgewing wat in die wêreld beskikbaar is nie, maar poog om 'n meer gebruikers vriendelike gids te wees vir veral besigheidsmense om die Wet makliker bruikbaar en verstaanbaar te maak. Die studie fokus daarop om 'n opsommende beskrywing te gee van die Wet sowel as die formulering van bepaalde hulpmiddels om die leser van hulp te wees met interpretasie en toepassing. Die werkstuk gee 'n kort beskrywing van die ontwikkeling van Kompetisie wetgewing in Suid-Afrika in Hoofstuk 2. Hoofstuk 3 is 'n bespreking van die hoof artikels van die Wet wat handelaar beperkende praktyke, dominansie, samesmeltings en oornames, remedies en afdwinging. Daar volg ook 'n bespreking van 'n paar tipiese voorbeelde van onkompeterende praktyke. Hoofstuk 4 handel oor hulpmiddels en illustreer by wyse van diagramme, die drempels vir vasstelling van welke firma onderhewig is aan artikel 11, sowel as 'n paar verwysings van handige bronne. Die werkstuk sluit af met 'n kort gevolgtrekking.

One of the recognised ways through which a firm may increase its market share or reorganise its presence in a market is through a merger. A merger occurs when independent firms combine their businesses. Section 12A of the Competition Act, 1998, provides two grounds in terms of which mergers must be evaluated by competition authorities. These are competition and public interest considerations. The Act is reticent on which, between the two considerations, should take precedence in the event that the two conflict. The anterior purpose of this study is therefore to provide an in-depth analysis on which consideration must take precedence in the event of conflict. On analysis, the majority of case law suggests that the competition considerations must take precedence. This observation is also buttressed by a significant amount of literature, which holds that in merger analysis, the public interests only play a secondary role to the competition inquiry. / Mercantile Law / LL.M. (Mercantile Law)