Will criminalising cartel conduct be effective?

New provisions to the Competition Amendment Act (1998) which became effective on 1 May, indicate that price fixing, market allocation and collusive tendering between competitors could result in criminal liability for directors or managers.

Although the new provisions attempt to deal with collusion and ensure fair competition, Martin Versfeld, Competition Law Partner at Webber Wentzel, argues that the provisions may discourage company directors or managers from making full disclosures.

Versfeld spoke to #NightTalk's Gugs Mhlungu and Sizwe Dhlomo about the impact of the new Competition Amendment Act provisions.

Listen to the full conversation:

Directors were encouraged to make full disclosure to competition authorities in exchange for leniency or reduced penalties. The system was hugely effective

Martin Versfeld, Competition Law Partner at Webber Wentzel

One of the reasons I think why this criminal provision took nine years to come into play is for the most part, the competition authorities themselves had been resistant to it coming force, because now you have a director who is conflicted

Martin Versfeld, Competition Law Partner at Webber Wentzel

I fear this will serve as a massive disincentive on a forward looking basis, and competition authorities ultimately becoming less effective at managing these cartels

Martin Versfeld, Competition Law Partner at Webber Wentzel

This article first appeared on 702 : Will criminalising cartel conduct be effective?


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