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Legal framework

Antitrust law

What are the legal sources that set out the antitrust law applicable to vertical restraints?

The key legal source that regulates vertical restraints in South Africa is the Competition Act 1998 (the Act). Section 5(1) of the Act provides that ‘an agreement between parties in a vertical relationship is prohibited if it has the effect of substantially preventing or lessening competition in the market, unless a party to the agreement can prove that any technological, efficiency or other pro-competitive gain resulting from that Agreement outweighs that effect’. This provision applies a ‘rule of reason’ test to vertical restraints and parties can raise efficiency, technological or pro-competitive justifications for these restraints even if they substantially lessen or prevent competition.

Section 5(2) provides that ‘the practice of minimum resale price maintenance is prohibited’. This practice is prohibited outright and cannot be justified on the basis that it leads to efficiency, technological or pro-competitive gains. However, section 5(3) provides that a supplier or producer may recommend a minimum resale price to the reseller of a good or service provided that the supplier or producer makes it clear to the reseller that the recommendation is not binding; and if the product has its price stated on it, the words ‘recommended price’ appear next to the stated price.

In cases where a vertical restraint involves a firm (or firms) considered ‘dominant’ as defined in section 7 of the Act, the restrictions on abuses by dominant firms set out in sections 8 and 9 of the Act may also apply, but these are dealt with in the separate section relating to abuse of dominance.

Types of vertical restraint

List and describe the types of vertical restraints that are subject to antitrust law. Is the concept of vertical restraint defined in the antitrust law?

The Act defines a vertical relationship as a ‘relationship between a firm and its suppliers, customers or both’. The provisions of section 5 apply to agreements, understandings or arrangements between firms that operate at different levels of the supply chain (for example, between a manufacturer and a dealer, or between a wholesaler and a retailer). Examples of vertical restraints imposed in vertical agreements that are subject to section 5 of the Act include exclusive or long-term supply contracts, exclusive distribution arrangements, territorial restrictions, customer restrictions, exclusive purchase obligations and non-compete obligations.

Legal objective

Is the only objective pursued by the law on vertical restraints economic, or does it also seek to promote or protect other interests?

The main purpose of the restriction set out in section 5 of the Act is to promote and maintain competition in South Africa, in accordance with section 2(a) and (b) of the Act. However, this section of the Act also states that the purpose of the Act is to promote employment and advance the social and economic welfare of South Africans; ensure that small and medium-sized enterprises have an equitable opportunity to participate in the economy; and promote a greater spread of ownership, in particular, to increase the ownership stakes of historically disadvantaged persons. These ‘public interest’ factors may influence the approach of the Competition Commission to investigation and prosecution of complaints concerning these restrictions, as well as the level of administrative penalties that may be imposed for a contravention of section 5 of the Act.

Responsible authorities

Which authority is responsible for enforcing prohibitions on anticompetitive vertical restraints? Where there are multiple responsible authorities, how are cases allocated? Do governments or ministers have a role?

The South African Competition Commission (the Commission) is responsible for investigating complaints about a contravention of section 5 of the Act. It receives complaints from third parties and may also initiate its own complaints. It refers complaints for adjudication by the Competition Tribunal (the Tribunal).

Jurisdiction

What is the test for determining whether a vertical restraint will be subject to antitrust law in your jurisdiction? Has the law in your jurisdiction regarding vertical restraints been applied extraterritorially? Has it been applied in a pure internet context and if so, what factors were deemed relevant when considering jurisdiction?

The Act applies to ‘all economic activity within, or having an effect within, South Africa’. No cases involving extraterritorial application of section 5 of the Act, or the application of this section of the Act in the pure internet context, have yet been determined by the Tribunal.

Agreements concluded by public entities

To what extent does antitrust law apply to vertical restraints in agreements concluded by public entities?

The Act applies to ‘all economic activity within, or having an effect within, South Africa’. If public entities, such as government or municipal entities, or state-owned enterprises such as the national electricity supplier Eskom, are engaged in economic activity, then section 5 will apply to their conduct.

Sector-specific rules

Do particular laws or regulations apply to the assessment of vertical restraints in specific sectors of industry (motor cars, insurance, etc)? Please identify the rules and the sectors they cover.

There are specific South African laws applicable to sectors like energy and telecommunications, but none are targeted specifically at vertical restraints.

General exceptions

Are there any general exceptions from antitrust law for certain types of agreement containing vertical restraints? If so, please describe.

The Act applies to ‘all economic activity within, or having an effect within, South Africa’ regardless of whether the vertical restraint has an appreciable effect or not. The Act does not apply to agreements between employers and employees that constitute a ‘collective agreement, as defined in section 213 of the Labour Relations Act’.

Types of agreement

Agreements

Is there a definition of ‘agreement’ - or its equivalent - in the antitrust law of your jurisdiction?

An agreement is defined as a ‘contract, arrangement or understanding, whether or not legally binding’.

In order to engage the antitrust law in relation to vertical restraints, is it necessary for there to be a formal written agreement or can the relevant rules be engaged by an informal or unwritten understanding?

It is not necessary for there to be a formal or written agreement - even an informal or unwritten understanding or arrangement may contravene section 5 of the Act.

Parent and company-related agreements

In what circumstances do the vertical restraints rules apply to agreements between a parent company and a related company (or between related companies of the same parent company)?

No cases involving the application of section 5 of the Act to a parent company and a related company have yet been determined by the Tribunal. However, it is likely that the Tribunal would consider that a parent company and its wholly owned subsidiary (or firms within a single economic unit) are not ‘in a vertical relationship’.

Agent-principal agreements

In what circumstances does antitrust law on vertical restraints apply to agent-principal agreements in which an undertaking agrees to perform certain services on a supplier’s behalf for a sales-based commission payment?

There is no Tribunal case law dealing with this question yet, but it seems unlikely that section 5 of the Act would apply to an agreement concluded between a principal and its ‘true’ agent, as defined in South African Common Law.

Where antitrust rules do not apply (or apply differently) to agent-principal relationships, is there guidance (or are there recent authority decisions) on what constitutes an agent-principal relationship for these purposes?

The South African Common Law recognises that a genuine agency relationship is created when an agent, duly authorised to do so, performs acts on behalf of its principal, and thereby confers rights and duties directly on the principal. There is no South African case law applying this concept in the online sector.

Intellectual property rights

Is antitrust law applied differently when the agreement containing the vertical restraint also contains provisions granting intellectual property rights (IPRs)?

The Act applies to all economic activity within or having an effect within the Republic of South Africa, and this would include the exercise of intellectual property rights. There is no provision in the Act that is similar to the European Commission’s Vertical Block exemption.

However, section 10(4) of the Act provides that a firm may apply to the Commission to exempt an ‘agreement or practice, or category of agreements or practices’ from the application of section 5 of the Act, if these relate to ‘the exercise of intellectual property rights’ including in terms of legislation in South Africa such as the Patents Act, Copyright Act, Trade Marks Act and Designs Act. An example of an application for exemption in terms of section 10(4) of the Act is the application by VISA South Africa, a branch of VISA International Services Association Incorporated, to establish a new entity, VISA National Organisation (VISA NO). This provides a payment processing system in terms of which the member banks that belong to VISA effect payment between themselves in respect of goods and services purchased by members of the public through the use of VISA credit cards. The Commission granted this exemption application on the basis that the agreement that established VISA NO involved the exercise of intellectual property rights.

Analytical framework for assessment

Analytical framework for assessment

Framework

Explain the analytical framework that applies when assessing vertical restraints under antitrust law.

Section 5 of the Act identifies only one kind of vertical restraint that is per se unlawful: section 5(2) imposes an outright prohibition on minimum resale price maintenance. An attempt by an upstream supplier to control or maintain the price at which its product is resold is prohibited, irrespective of the supplier’s reasons or motives for imposing the price restriction. All that is required to establish a contravention is evidence that a supplier has, as a matter of practice (habitual conduct), unilaterally imposed a price at which goods are to be resold, and the customer has been induced to comply with the minimum price on pain of a sanction for non-compliance (see the decision of the Competition Appeal Court in Federal Mogul Aftermarket Southern Africa (Pty) Ltd v Competition Commission; Case No. 33/CAC/Sep03, as well as Competition Commission v South African Breweries Ltd and others; Cases Nos. 134/CR/Dec07 and 129/CAC/Apr14). Fines have been imposed on several companies for contravening the outright prohibition in section 5(2) of the Act (see, for example, the consent orders entered into by Toyota South Africa and various other motor vehicle manufacturers).

Section 5(1) of the Act provides that an agreement between parties in a vertical relationship is only prohibited if it has the effect of substantially preventing or lessening competition in the market, unless a party to the agreement can prove that any technological, efficiency or other pro-competitive gain resulting from that agreement outweighs that effect. The standard against which a non-price vertical restraint agreement must be tested is whether or not it will have the effect of substantially preventing or lessening competition in any relevant markets. This requires economic analysis of the relevant upstream and downstream markets, and if a substantial lessening or prevention of competition results from a vertical restraint, the parties to the agreement would need to prove that any technological, efficiency or other pro-competitive gain resulting from the agreement outweighs its detrimental effects. This inquiry is essentially a factual one, and necessarily involves the balancing of any pro-competitive effects of the vertical agreement against negative or anticompetitive effects. In line with the approach taken by the American courts, section 5 is generally interpreted to require a consideration of whether or not the agreement results in a party acquiring an ability to exercise market power that it would not otherwise enjoy, for example, insofar as it facilitates horizontal collusion between dealers or manufacturers or permits an abuse of market power by a manufacturer or a dealer. The Competition Appeal Court has held that section 5(1) requires ‘some likely effect on price, output and/or quality of product which diminishes consumer welfare’.

Accordingly, vertical restraints, even where they create an exclusive dealership, will usually be judged lawful. Difficulties will only arise where there is some potential for market power or horizontal collusion. Absent market power, however, strong inter-brand competition will usually ensure that anticompetitive effects do not arise.

Even if a non-price vertical restraint leads to a substantial lessening or prevention of competition, the parties to the agreement may still be able demonstrate that it leads to efficiency, pro-competitive or technological gains that outweigh this effect, and accordingly, that the agreement is permissible.

Market shares

To what extent are supplier market shares relevant when assessing the legality of individual restraints? Are the market positions and conduct of other suppliers relevant? Is it relevant whether certain types of restriction are widely used by suppliers in the market?

Supplier market share is relevant when assessing the legality of individual restraints, but the market positions and conduct of other suppliers in the market are also relevant. For example, in the case of Competition Commission v South African Breweries Ltd (SAB) and others; Cases Nos. 134/CR/Dec07 and 129/CAC/Apr14, SAB operated a dual distribution model for distribution of beer, in terms of which it used the services of certain independent dealers (depots), as well as ‘authorised’ SAB distributors who were allocated exclusive geographic territories. The Commission alleged that the exclusive distribution agreements between the authorised dealers and SAB reduced intra-brand competition. The Competition Appeal Court dismissed this complaint, including on the basis that the exclusive distribution agreements related to only 10 per cent of SAB’s distribution, and 90 per cent of SAB’s beer was distributed from the depots.

To what extent are buyer market shares relevant when assessing the legality of individual restraints? Are the market positions and conduct of other buyers relevant? Is it relevant whether certain types of restriction are widely used by buyers in the market?

Buyer market shares are relevant when assessing the legality of individual restraints, as are the market positions and conduct of other buyers. In a recent case, for example, the Commission referred a complaint against Rooibos Ltd, the largest processor of rooibos tea in South Africa, in relation to long-term supply agreements it entered into with farmers of rooibos tea in South Africa, which required them to supply stipulated volumes of rooibos tea, and only those honouring a supply commitment were granted access to its research. This case has yet to be adjudicated by the Tribunal.

Block exemption and safe harbour

Function

Is there a block exemption or safe harbour that provides certainty to companies as to the legality of vertical restraints under certain conditions? If so, please explain how this block exemption or safe harbour functions.

No.

Types of restraint

Assessment of restrictions

How is restricting the buyer’s ability to determine its resale price assessed under antitrust law?

Minimum resale price maintenance is prohibited outright by section 5(2) of the Act. There have been numerous cases in which substantial administrative penalties have been imposed in South Africa on companies that have contravened this section of the Act, and this practice is the subject of significant enforcement activity by the Commission.

Maximum resale price maintenance is judged by the rule of reason standard set out in section 5(1) of the Act, so this practice may be justified if any technological, efficiency or other pro-competitive results from the agreement could be shown to outweigh the anticompetitive effects (see Cancun Trading No. 24 CC and others v Seven Eleven Corporation SA (Pty) Ltd; Case No. 18/IR/Dec99).

Have the authorities considered in their decisions or guidelines resale price maintenance restrictions that apply for a limited period to the launch of a new product or brand, or to a specific promotion or sales campaign; or specifically to prevent a retailer using a brand as a ‘loss leader’?

No - minimum price maintenance is prohibited outright, regardless of the period over which this restriction is imposed.

Relevant decisions

Have decisions or guidelines relating to resale price maintenance addressed the possible links between such conduct and other forms of restraint?

No.

Have decisions or guidelines relating to resale price maintenance addressed the efficiencies that can arguably arise out of such restrictions?

No - minimum price maintenance is prohibited outright in South Africa, and a supplier that engages in this practice cannot justify it on the basis that it leads to efficiencies.

Explain how a buyer agreeing to set its retail price for supplier A’s products by reference to its retail price for supplier B’s equivalent products is assessed.

The Tribunal has not considered any cases of this kind to date, but since minimum resale price maintenance is prohibited outright, it is likely that an instruction by a supplier to a retailer to set its prices with reference to another retailer’s equivalent products would be regarded as a form of minimum resale price maintenance in contravention of section 5(2) of the Act.

Suppliers

Explain how a supplier warranting to the buyer that it will supply the contract products on the terms applied to the supplier’s most-favoured customer, or that it will not supply the contract products on more favourable terms to other buyers, is assessed.

The Tribunal has not decided any cases involving clauses of this nature to date, but it is likely that they would be assessed using the rule of reason test applied by section 5(1) of the Act.

Explain how a supplier agreeing to sell a product via internet platform A at the same price as it sells the product via internet platform B is assessed.

The Tribunal has not decided any cases involving clauses of this nature to date, but it is likely that they would be assessed using the rule of reason test applied by section 5(1) of the Act.

Explain how a supplier preventing a buyer from advertising its products for sale below a certain price (but allowing that buyer subsequently to offer discounts to its customers) is assessed.

The Tribunal has not decided any complaints involving this practice to date, but in 2016, the Tribunal approved a consent order in which Premium Brands Distributors, the sole authorised distributor of Nikon branded products in South Africa, agreed to pay a fine of 300,000 rand because it had restricted advertising by its network of retailers in South Africa.

Explain how a buyer’s warranting to the supplier that it will purchase the contract products on terms applied to the buyer’s most-favoured supplier, or that it will not purchase the contract products on more favourable terms from other suppliers, is assessed.

The Tribunal has not decided any cases involving clauses of this nature to date, but it is likely that they would be assessed using the rule of reason test applied by section 5(1) of the Act.

Restrictions on territory

How is restricting the territory into which a buyer may resell contract products assessed? In what circumstances may a supplier require a buyer of its products not to resell the products in certain territories?

Territorial restrictions on resellers are evaluated in terms of the rule of reason standard envisaged by section 5(1) of the Act. There are no cases in which the Tribunal has considered these restrictions to date. In general, however, the Commission recognises that territorial restrictions address the problem of one distributor or reseller free-riding on the marketing and promotion efforts of another distributor or reseller.

Have decisions or guidance on vertical restraints dealt in any way with restrictions on the territory into which a buyer selling via the internet may resell contract products?

No.

Restrictions on customers

Explain how restricting the customers to whom a buyer may resell contract products is assessed. In what circumstances may a supplier require a buyer not to resell products to certain resellers or end-consumers?

Active sales refer to sales that a distributor may make outside the territory where the distributor has actively promoted and sought the sale of the goods through, for example, a promotional campaign or where the distributor has made a direct approach to an exclusive customer group. Passive sales refer to unsolicited requests from individual customers. The Act makes no distinction between active and passive sales, nor has this issue arisen in any Tribunal cases to date.

Restrictions on use

How is restricting the uses to which a buyer puts the contract products assessed?

There are no cases in which the Tribunal has considered these restrictions to date. However, if the supplier and the buyer are considered to be competitors or potential competitors, there is a risk that the Commission would take the view that such restrictions contravene the outright prohibition on market allocation by competitors imposed by section 4(2) of the Act.

Restrictions on online sales

How is restricting the buyer’s ability to generate or effect sales via the internet assessed?

There are no cases in which the Tribunal has considered these restrictions to date.

Have decisions or guidelines on vertical restraints dealt in any way with the differential treatment of different types of internet sales channel? In particular, have there been any developments in relation to ‘platform bans’?

No.

Selective distribution systems

Briefly explain how agreements establishing ‘selective’ distribution systems are assessed. Must the criteria for selection be published?

There are no specific rules or guidelines governing these arrangements in South Africa. They would be assessed in the light of the broad rule of reason standard set out in section 5 of the Act. However, it is likely that if selection criteria are published, they are more likely to be justifiable.

Are selective distribution systems more likely to be lawful where they relate to certain types of product? If so, which types of product and why?

Selective distribution systems involve the selection of a limited number of dealers by a supplier. There are no cases in which the Tribunal has considered these restrictions to date. These systems would be evaluated in terms of the rule of reason standard set out in section 5(1) of the Act. It is likely to be easier to defend such restrictions if they relate to dealers in products that require significant after-sales service or are technically complex.

In selective distribution systems, what kinds of restrictions on internet sales by approved distributors are permitted and in what circumstances? To what extent must internet sales criteria mirror offline sales criteria?

There are no cases in which the Tribunal has considered these restrictions in the context of internet sales to date. These systems would be evaluated in terms of the rule of reason standard set out in section 5(1) of the Act.

Has the authority taken any decisions in relation to actions by suppliers to enforce the terms of selective distribution agreements where such actions are aimed at preventing sales by unauthorised buyers or sales by authorised buyers in an unauthorised manner?

No.

Does the relevant authority take into account the possible cumulative restrictive effects of multiple selective distribution systems operating in the same market?

There are no cases in which the Tribunal has considered these restrictions to date.

Has the authority taken decisions (or is there guidance) concerning distribution arrangements that combine selective distribution with restrictions on the territory into which approved buyers may resell the contract products?

There are no cases in which the Tribunal has considered these restrictions to date. These systems would be evaluated in terms of the rule of reason standard set out in section 5(1) of the Act.

Other restrictions

How is restricting the buyer’s ability to obtain the supplier’s products from alternative sources assessed?

There are no cases in which the Tribunal has considered these restrictions to date. These systems would be evaluated in terms of the rule of reason standard set out in section 5(1) of the Act.

How is restricting the buyer’s ability to sell non-competing products that the supplier deems ‘inappropriate’ assessed?

There are no cases in which the Tribunal has considered these restrictions to date. These systems would be evaluated in terms of the rule of reason standard set out in section 5(1) of the Act.

Explain how restricting the buyer’s ability to stock products competing with those supplied by the supplier under the agreement is assessed.

There are no cases in which the Tribunal has considered these restrictions to date. These systems would be evaluated in terms of the rule of reason standard set out in section 5(1) of the Act.

How is requiring the buyer to purchase from the supplier a certain amount or minimum percentage of the contract products or a full range of the supplier’s products assessed?

There are no cases in which the Tribunal has considered these restrictions to date. These systems would be evaluated in terms of the rule of reason standard set out in section 5(1) of the Act.

Explain how restricting the supplier’s ability to supply to other buyers is assessed.

There are no cases in which the Tribunal has considered these restrictions to date. These systems would be evaluated in terms of the rule of reason standard set out in section 5(1) of the Act.

Explain how restricting the supplier’s ability to sell directly to end-consumers is assessed.

There are no cases in which the Tribunal has considered these restrictions to date. These systems would be evaluated in terms of the rule of reason standard set out in section 5(1) of the Act.

Have guidelines or agency decisions in your jurisdiction dealt with the antitrust assessment of restrictions on suppliers other than those covered above? If so, what were the restrictions in question and how were they assessed?

No.

Notification

Notifying agreements

Outline any formal procedure for notifying agreements containing vertical restraints to the authority responsible for antitrust enforcement.

Not applicable. Parties to an agreement that may fall foul of section 5 of the Act may apply for an exemption of their agreement, but the grounds for exemption are narrow.

Authority guidance

If there is no formal procedure for notification, is it possible to obtain guidance from the authority responsible for antitrust enforcement or a declaratory judgment from a court as to the assessment of a particular agreement in certain circumstances?

It is possible to apply to the Commission for an advisory opinion, but these opinions merely provide guidance on the Commission’s likely approach, and are not binding.

Enforcement

Complaints procedure for private parties

Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?

Yes. The party to a vertical agreement, or third parties, can file a complaint with the Commission, which then has one year to investigate this complaint (although this period may be extended with consent from the complainant by up to 12 months at a time). At the end of the investigation, the Commission must either issue a certificate of non-referral or refer the complaint for adjudication by the Tribunal.

Regulatory enforcement

How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?

The Commission enforces the outright prohibition on minimum resale price maintenance in section 5(2) of the Act relatively infrequently, and the Tribunal has confirmed relatively few consent orders relating to this practice to date. However, the Tribunal has emphasised in a decision involving a consent order in relation to SBS Household Appliances t/a SMEG that despite the global trend towards considering minimum resale price maintenance as justifiable in certain circumstances, this practice is still prohibited outright in South Africa and there is no intention to amend the Act at present.

Very few cases involving a contravention of the rule of reason prohibition in section 5(1) of the Act have been adjudicated by the Tribunal. There is currently no penalty imposed for a first-time contravention of section 5 of the Act and this has apparently impacted on the Commission’s appetite to pursue these complaints to date. Note, however, that an amendment to the Act, which was passed by Parliament in December 2018 (but which has not yet been signed into law by the president), will enable the imposition of a fine for even a first-time contravention of section 5(1). Also, many cases involving vertical restrictions in agreements with a dominant firm are dealt with as an abuse of dominance, rather than a contravention of section 5 of the Act. The Commission remains more focused on cartels and far more complaints involving restrictive horizontal practices (price-fixing, market allocation and collusive tendering by competitors) are investigated and referred for adjudication by the Tribunal.

What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?

The Tribunal can declare all or part of an agreement that contravenes section 5 of the Act to be invalid. However, where it is possible to sever the offending clauses from the agreement, the rest of the agreement can remain valid.

May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?

After investigating a complaint concerning a contravention of section 5 of the Act, the Commission may refer the complaint for adjudication by the Competition Tribunal, which can currently impose an administrative penalty for a first-time contravention of section 5(2), and a second-time contravention of section 5(1), of up to 10 per cent of the turnover of the parties to the agreement. Note, however, that an amendment to the Act, which was passed by Parliament in December 2018 (but which has not yet been signed into law by the president), will enable the imposition of a fine for even a first-time contravention of section 5(1).

Significant penalties for contraventions of section 5(2) have been imposed on companies in South Africa to date: Pentel South Africa (Pty) Ltd (2.8 million rand); Daimler Chrysler South Africa (8 million rand); and General Motors South Africa (12 million rand).

Investigative powers of the authority

What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?

The Commission’s powers when conducting an investigation are set out in Chapter 5 of the Act, and include the power to conduct searches of business premises with or without a warrant (sections 46, 47 and 48) and summons individuals for questioning under oath (section 49A). The Commission does demand information from suppliers domiciled outside South Africa, although its ability to enforce compliance is yet to be considered by the Tribunal or any South African court.

Private enforcement

To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?

A party that sustains a loss as a result of a restrictive vertical agreement can claim damages in the South African High or Magistrates courts, as envisaged in section 65 of the Act. However, a finding by the Tribunal that section 5 of the Act has been contravened is a prerequisite for a claim of this nature. To date, no claims for damages arising from contraventions of this section of the Act have been decided by the civil courts.

Other issues

Other issues

Is there any unique point relating to the assessment of vertical restraints in your jurisdiction that is not covered above?

No.

Update and trends

Recent developments

What were the most significant two or three decisions or developments in this area in the last twelve months?

Anticipated developments

An amendment to the South African Competition Act was passed by Parliament in December 2018. Although it has not yet been signed into law by the President, it is expected to come into force in 2019. The amendment will allow the Competition Tribunal to impose a fine of up to 10 per cent of turnover for any contravention of section 5 of the Act (not only for minimum resale price maintenance). As a result, the South African Competition Commission may be inclined to investigate and refer more complaints regarding restrictive vertical restraints in the future.