A recent amendment to South Africa's competition laws (the South African Competition Amendment Act, 2009, amending the South African Competition Act, 1998) provides for criminal sanctions to be imposed against directors and certain managers who are involved with prohibited practises.
Although common in other jurisdictions, this is a new development under South African competition law. In the past, only the actual companies involved in prohibited practices could be sanctioned (by means of fines imposed by the South African Competition authorities, the “Regulator” ).
On the other hand, the provisions relating to the prosecution of directors and managers places a higher burden of proof on directors and managers than would ordinarily be the case in criminal proceedings. This is likely to be challenged in the South African Constitutional Court, as it may be deemed to contravene an individual’s constitutional right to a fair trial.
A less problematic amendment is the provision for the regulation of so called “complex monopolies”, namely, where at least three quarters of goods and services in a particular market are supplied to or by five or fewer companies and these companies are acting in the same manner, whether or not by agreement. This amendment greatly increases the powers of the Regulator to promote competition, but it is not clear what the Regulator's approach would be in circumstances where this situation arises from a change in market circumstances (for example, increased transport costs).
On the whole, the recent amendments to South Africa's competition laws are in line with the Regulator’s recent policy of taking a more active role in opposing prohibited practises. Whilst these amendments would focus the minds of directors and managers, it remains to be seen how these provisions would be applied in practice given the sanctions involved and possible challenge from a constitutional perspective.