Cartel conduct now a criminal activity

The South African Minister of Economic Development, Ebrahim Patel, announced last month that any cartel conduct, including price fixing, market allocation and collusive tendering, now constitutes criminal activity. The amendments to the Competition Act giving effect to this announcement came into effect on 1 May 2016.

The effect of the amendment is that any person who participates in cartel conduct or who knowingly acquiesced to such conduct, may be criminally prosecuted with the possibility of being imprisoned for up to 10 years and/or liable for a fine not exceeding R500 000. This means that directors or managers who have knowledge of cartel activity but fail to come forward to the competition authorities, may be criminally liable.

If the firm has admitted to having engaged in cartel conduct or the Competition Tribunal or Competition Appeal Court finds that a firm has engaged in cartel conduct, the matter is then dealt with by the National Prosecuting Authority.

It has now become extremely important that the directors and managers of firms make sure to avoid cartel conduct and that, should they become aware of such activity, they notify the competition authorities as soon as possible.