Come 1 April 2013, our Competition Commission can wield its brand new superpower – the right to carry out market inquiries without an initial complaint. 

Any “market” displaying features which prevent, distort or restrict competition is open to investigation by the Competition Commission in terms of the new chapter of the Competition Act.

 If you aren’t faithfully reading the Government Gazette, you’d better start now because the first market participants will know of a forthcoming inquiry is a notice which the Commission has to publish in the Government Gazette. 

The Commission is supposed to include in its notice terms of reference for the market inquiry (which have to set out the scope of the inquiry and the time it is expected to take) as well as an invitation to the public to provide information about the market inquiry.  Bearing in mind that the infamous bread cartel investigation started with a complaint from a small business, imagine what where these public invitations may lead…

One saving grace is that the Competition Commission may not descend on hapless market participants in dawn raids.  It can, however, summons them to provide information and to attend interrogations and those summoned have to attend or face contempt charges.  Beware those summonses though because the Commission is allowed to use information obtained in the course of its market inquiry to initiate complaints against firms resulting in consent orders, further investigation or a direct referral to the Tribunal for hearing.  That is the really scary part of these powers.

Those powers are really, after all, what this is all about.  Yes, the Commission must report to the Minister on its findings and publish that report in the Government Gazette but who really cares about that?  At the end of the day when the Commission starts a market inquiry, every firm in the affected market had best take a long hard look at itself before the Commission starts rummaging through its records.  Rumour has it that the healthcare industry is first on the hit list.  Only time will tell.

Jennifer Finnigan, Partner and Competition Law Specialist

Contact: 031 575 7406 and finnigan@wylie.co.za