Cartel Regulation 2009 - ENS

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contents ® Cartel Regulation 2009 Contributing editor William Rowley QC and Martin Low QC, McMillan LLP Business development manager Joseph Samuel Marketing managers Alan Lee Dan Brennan George Ingledew Edward Perugia Robyn Hetherington Dan White Tamzin Mahmoud Elle Miller Marketing assistant Ellie Notley Subscriptions manager Nadine Radcliffe Subscriptions@ GettingTheDealThrough.com Assistant editor Adam Myers Editorial assistants Nick Drummond-Roe Charlotte North Senior production editor Jonathan Cowie Production editor Jo Morley Subeditors Jonathan Allen Laura Zúñiga Kathryn Skegg Sara Davies Editor-in-chief Callum Campbell Publisher Richard Davey Cartel Regulation 2009 Published by Law Business Research Ltd 87 Lancaster Road London W11 1QQ, UK Tel: +44 20 7908 1188 Fax: +44 20 7229 6910 © Law Business Research Ltd 2009 No photocopying: copyright licences do not apply. ISSN 1473-3420 The information provided in this publication is general and may not apply in a specific situation. Legal advice should always be sought before taking any legal action based on the information provided. This information is not intended to create, nor does receipt of it constitute, a lawyer–client relationship. The publishers and authors accept no responsibility for any acts or omissions contained herein. Although the information provided is accurate as of January 2009, be advised that this is a developing area. Printed and distributed by Encompass Print Solutions. Tel: 0870 897 3239 Overview David E Vann Jr and Ellen L Frye Simpson Thacher & Bartlett LLP 3 Australia Michael Corrigan and Sarah Godden Clayton Utz 5 Austria Astrid Ablasser-Neuhuber and Florian Neumayr bpv Hügel Rechtsanwälte 11 Belgium Hans Gilliams Eubelius 17 Brazil Mauro Grinberg Barcellos Tucunduva 23 Canada D Martin Low QC, A Neil Campbell, J William Rowley QC and Mark Opashinov McMillan LLP 28 China Xu Rongrong Janet and Yu Yongqiang Jun He Law Offices 36 Cyprus Thomas M Keane Chrysses Demetriades & Co LLC 41 Czech Republic Lucie Bányaiová Salans Europe LLP 46 Denmark Jan-Erik Svensson Gorrissen Federspiel Kierkegaard 52 European Union John Boyce and Anna Lyle-Smythe Slaughter and May Hans-Jörg Niemeyer and Boris Kasten Hengeler Mueller 58 Finland Christian Wik and Inga Korpinen Roschier, Attorneys Ltd 69 France Hugues Calvet and Ning-Ly Seng Bredin Prat 76 Germany Alf-Henrik Bischke and Thorsten Mäger Hengeler Mueller 85 Greece Angela Nissyrios M & P Bernitsas Law Offices 92 India Atul Chitale Chitale & Chitale Partners 98 Ireland Louise Carpendale Matheson Ormsby Prentice 104 Israel Eytan Epstein, Tamar Dolev-Green and Michelle Morrison Epstein Chomsky Osnat & Co 110 Italy Rino Caiazzo and Kathleen Stagi Ughi e Nunziante 117 Japan Eriko Watanabe Nagashima Ohno & Tsunematsu 125 Korea Hoil Yoon Yoon Yang Kim Shin & Yu 131 Latvia Dace Silava-Tomsone Raidla Lejins & Norcous 136 Luxembourg Patrick Santer and Léon Gloden Elvinger Hoss & Prussen 142 Netherlands Jolling K de Pree and Simone J H Evans De Brauw Blackstone Westbroek 147 New Zealand Sarah Keene Russell McVeagh Nick Flanagan Meredith Connell 157 Norway Frode Elgesem, Heddy Ludvigsen and Monica Syrdal Advokatfirmaet Hjort DA 166 Poland Dorothy Hansberry-Bieguńska and Sabina Famirska Wardyński & Partners 173 Portugal Mário Marques Mendes and Pedro Vilarinho Pires Marques Mendes & Associados 180 Romania Georgeta Harapcea and Adrian Ster Nestor Nestor Diculescu Kingston Petersen 187 Slovakia Soňa Hanková Salans Europe LLP 193 South Africa Justin Balkin, Marisa Coetzee and Tsakane Marolen Edward Nathan Sonnenbergs 200 Sweden Tommy Pettersson, Johan Carle and Stefan Perván Lindeborg Mannheimer Swartling 207 Switzerland Marcel Meinhardt, Benoît Merkt and Olivier Riesen Lenz & Staehelin 216 Turkey Gonenc Gurkaynak and K Korhan Yildirim ELIG Attorneys-at-Law 224 Ukraine Stanislav Gerasymenko Arzinger & Partners 230 United Kingdom Sarah Cardell and Lisa Wright Slaughter and May 235 United States Joseph F Tringali and Michael C Naughton Simpson Thacher & Bartlett LLP 245 Venezuela José Gregorio Torrealba Hoet Peláez Castillo & Duque 253 Quick reference tables 258 Law Business Research www.gettingthedealthrough.com
South Africa Edward Nathan Sonnenbergs South Africa Justin Balkin, Marisa Coetzee and Tsakane Marolen Edward Nathan Sonnenbergs Legislation and jurisdiction 1 Relevant legislation What is the relevant legislation and who enforces it South African competition law is regulated by the Competition Act, 89 of 1998, as amended (the Competition Act). Various regulations have been promulgated under and in terms of the Competition Act, including the Rules for the Conduct of Proceedings in each of the Competition Commission, the Competition Tribunal and the Competition Appeal Court, as well as various threshold notices. The Competition Act establishes three competition authorities: the Competition Commission (the Commission), the Competition Tribunal (the Tribunal) and the Competition Appeal Court (the CAC). The Commission’s role is both investigative and prosecutorial, whilst the Tribunal’s role is adjudicative. In this regard, the Commission investigates cartel complaints. If the Commission believes that there is merit to a complaint, it will refer the matter to the Tribunal for adjudication. Generally speaking, the Commission will act as prosecutor in the Tribunal, but there is scope for co-prosecution by the complainant or, if the Commission declines to refer the matter to the Tribunal, self-prosecution by the complainant. The CAC’s role is primarily to hear appeals against, and reviews of, decisions made by the Tribunal. In addition, in American Natural Soda Ash Corporation and another v Botswana Ash (Pty) Ltd and others [2005] (the Ansac/ Botash decision), the Supreme Court of Appeal (the SCA) held that the CAC did not have final jurisdiction in relation to competition law matters because its decisions were capable of being taken on appeal and review to the SCA. Finally, the Constitutional Court may also hear appeals of competition matters if they raise constitutional issues. 2 Substantive law What is the substantive law on cartels in the jurisdiction Cartel regulation in South Africa is governed by section 4 of the Competition Act, under the heading of ‘restrictive horizontal practices’. Section 4(1)(a) of the Competition Act provides that an agreement between parties in a horizontal relationship is prohibited if it has the effect of substantially preventing or lessening competition in a market, unless a party to an agreement can prove that any technological, efficiency or other pro-competitive gain resulting from that agreement outweighs that effect (namely, the rule of reason test). The prohibitions contained in section 4(1)(b) are as follows: • directly or indirectly fixing a purchase or selling price or any other trading condition; • dividing markets by allocating customers, suppliers, territories or specific types of goods or services; and • collusive tendering. Distinct from section 4(1)(a), the prohibitions in section 4(1)(b) of the Competition Act are referred to as per se prohibitions. These prohibitions are automatically and absolutely prohibited and cannot be justified on the basis of the rule of reason test. Accordingly, section 4(1)(b) of the Competition Act provides that, if firms in a horizontal relationship are found to have contravened the provisions thereof, they will be held to have engaged in a restrictive horizontal practice and will face the applicable sanctions. In the Ansac/Botash decision, the Supreme Court of Appeal held that it is necessary to first ‘characterise’ the conduct as falling within the prohibitions contained in section 4(1)(b). This ‘characterisation’ test requires the relevant provisions of section 4(1)(b) of the Competition Act to be construed so as to determine precisely the ambit and characteristics of the legislative prohibition under scrutiny. Once there is clarity on what the legislation prohibits (and on what is permissible), an evidential enquiry can commence in order to determine whether the prohibited conduct has, as a matter of fact, occurred. Section 4(5) of the Competition Act permits a company and its wholly owned subsidiary, as well as groups forming part of a single economic entity, to cooperate in manners that, but for the relationship between the companies in question, would be prohibited in terms of section 4(1) of the Competition Act. 3 Industry-specific offences and defences Are there any industry-specific offences and defences There are no industry-specific offences or defences. The Commission does, however, enjoy concurrent jurisdiction over competition matters together with other industry-specific regulators. Concurrent jurisdiction is to be regulated by way of agreements between the Commission and the industry regulators. To date, the Commission has entered into such agreements with each of the South African telecommunications, electricity and postal regulators. 4 Application of the law Does the law apply to individuals or corporations or both Section 4 of the Competition Act refers to arrangements between ‘firms’. ‘Firms’ are in turn defined to include ‘a person, partnership or a trust’. Accordingly, the Competition Act applies to both individuals and corporations. Although amendments in this regard are in the process of being passed (dealt with in more detail in Question 6 hereof), the Competition Act does not currently provide for criminal or civil sanctions against individuals involved in cartel activities. Once these amendments become law, individuals may be held personally liable for anticompetitive conduct. 200 Getting the Deal Through – Cartel Regulation 2009
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