Case note: The Value of Characterisation: Competition Commission V Irwin & Johnson & Another (2022) 2 CPLR 26 (CAC)

• Citation: (2024) 36 SA Merc LJ 125
• DOI: https://doi.org/10.47348/SAMLJ/v36/i1a6
• Published date: 14 January 2025
• Pages: 125-134
• Author: Schmidt, D.
• Date: 14 January 2025

JOBNAME: SAMLJ Vol 31 Part 1 PAGE: 1 SESS: 6 OUTPUT: Sat Nov 23 10:07:40 2024 SUM: 3B381515

/first/Juta−JM/SA−Merc−2024/SAMLJ−2024−V36−pt1/06Schmidt

THE VALUE OF CHARACTERISATION:

COMPETITION COMMISSION v IRWIN &

JOHNSON & ANOTHER (2022) 2 CPLR 26

(CAC)

DAMIAN SCHMIDT*

Attorney at law in Stuttgart (Germany)

I INTRODUCTION

In line with the objective of the Competition Act 89 of 1998 (‘the Act’) to

promote and maintain competition,s4oftheActprohibits restrictive

horizontal practices by firms. By contrast,s5oftheActprohibits

restrictive vertical practices. The strictest form of prohibition

concerning restrictive horizontal practices is contained in s 4(1)(b) of

the Act, taking into account that the restrictive horizontal practices laid

down in point (b) such as price-fixing, market division and collusive

tendering do not require a weighing of competition-related advantages

and disadvantages as in the case of s 4(1)(a) of the Act. If the

requirements of the provision are met, especially if firms concluded an

agreement that contains conduct covered by the per se prohibition, it will

lead to a violation of the Act.

Chapter 1 of the Act contains, inter alia, the definition of the term

‘agreement’, which ‘includes a contract, arrangement or understanding’.

Whether the agreement is legally effective is not decisive. In the context

of competition law, the legislator therefore assumes a broad

understanding of the term ‘agreement’, because the definition does not

depend on whether the common will of the acting legal entities has been

legally manifested. A broad understanding of this term was also

confirmed by the CAC in Nestar & others v Competition Commission &

another (2011) ZACAC 1 (para 25). The legislator’s position of a broad

interpretation of the term ‘agreement’ irrespective of its enforceability is

understandable. This is because the term ‘agreement’ may well be

understood differently in the context of competition law than in other

areas of the legal system.

Whether an agreement involves price-fixing, a division of markets or

collusive tendering is determined by the facts of the case, which are

evaluated in proceedings applying the standard of proof as set out in s 68

* LLD (Heidelberg) LLM (UCT).

002 - SA Mercantile Law - November 21, 2024

125 https://doi.org/10.47348/SAMLJ/v36/i1a6

(2024) 36 SA Merc LJ 125

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