The Competition Act, 89 of 1998 regulates competition in South Africa. It deals with mergers and anticompetitive conduct.

Mergers (and don’t be fooled into thinking that this is limited to conventional share sales or sale of business transactions, the definition of a merger in the Act covers any change in control of all or a significant part of a business) which hit specified turnover and asset value thresholds have to be approved by the Competition authorities before implementation. Party to implement without approval will be penalized.

The Act also prohibits anticompetitive conduct between competitors, firms and their customers or suppliers and abuses of dominance by firms having a substantial market share. Price fixing, market division, tender collusion, minimum resale price maintenance, excessive pricing, exclusion from an essential facility and specific exclusionary acts are “red card” offences attracting penalties for first contraventions.

From 1 May 2016, directors and executive managers who permit a firm to fix prices, divide markets or engage in tender collusion or turn a blind eye to these offenses can be charged criminally in their personal capacities in terms of section 73A(1) to (4) of the Act.

The Commission also has extensive information gathering powers including search and seizure and interrogation powers. The Commission regularly makes headlines for carrying out “dawn raids” on suspected offenders.