Enforcing the Competition Law in Namibia A Toolkit - cuts ccier

investigate managers and employees of firms and to demand information frombusiness entities, where there is suspicion of violation. There should also be ahigh penalty for failing to comply with investigative efforts.Last but not least, the authorities should be able to impose high penalties foranticompetitive conduct. The level of deterrence of a law is largely determinedby the probability of detection of a violation and the height of sanction imposedupon the violator. If sanctions were not sufficiently high, then it would still berational for market players to engage in anticompetitive conduct, and thenwillingly pay fine if caught. This is particularly true in the case of largemultinational companies, or serious violations where economic rents earnedare enormous. Accordingly, the law should provide the enforcing bodies withsanctions that are high enough to act as a disincentive to engage inanticompetitive conduct, when taking into account enforcement levels.The Competition Act of Namibia does not meet the above-mentionedconditions. The Namibian competition authority, which has been established,but it is still not operational has the powers to entry and search premises,undertake, premise raids and individual searches, but the it does not havepower to declare the conduct constituting infringement of the Act or to restrainthe undertaking from engaging from that. In such cases the Commission mustinstitute proceedings in the Court against the undertaking for obtaining anorder. The same rule applies interim orders restraining the undertaking fromengaging in anticompetitive conduct.As regards sanctions for anticompetitive practices, the penalties for failure tocomply with order of Court include both pecuniary and criminal nature.Pursuant to Section 62 a person commits an offence who contravenes or failsto comply with an interim or final order of the Court given in terms of theCompetition Act. If the person is convicted, he or she is liable to a fine notexceeding N$500 000 or to imprisonment for a period not exceeding 10 years,or to both a fine and imprisonment. However, even the maximum pecuniarypenalty may sometimes be disproportionate with regard to profit gained fromengaging in anticompetitive practices. In many jurisdictions, instead of fixinga certain amount of fines, the relevant agencies have right to impose fines upto 10 percent of total turnover earned by the violating undertaking in theprevious fiscal year.ESSENTIAL ELEMENTS FOR SUCCESSOn the other hand, an introduction of criminal sanctions against individualswho engage in anticompetitive practices has a strong deterrent effect, especiallyin cases of hard-core cartels. The individuals who set up and maintain cartels,and also senior executives or directors who either condone or encourage thearrangement can be thus directly sanctioned. One US study indicates thatmore than half of firms convicted of price-fixing would go into liquidation ifrequired to pay the optimal fine. This would not be fair, because in manycases, the cartel will only have covered one aspect of the firm’s business andthe real participants will have been the few executives involved. Very largeEnforcing the Competition Law in Namibia: A Toolkit 99