The Complaint Procedure Reconsidered after Competition Commission v Yara
| Jurisdiction | South Africa |
| Pages | 311-345 |
| Published date | 20 August 2019 |
| Author | Ilke Meissner |
| Date | 20 August 2019 |
THE COMPLAINT PROCEDURE
RECONSIDERED AFTER COMPETITION
COMMISSION V YARA
1
ILKE MEISSNER*
LLM student, University of Stellenbosch
PHILIP SUTHERLAND**
Professor of Mercantile Law, University of Stellenbosch
I INTRODUCTION
This article analyses the complaint procedure in South African competi-
tion law. This procedure is the principal mechanism for enforcing the
provisions on prohibited practices.
2
The Competition Act 89 of 1998 (as
amended) (the ‘Act’) merely defines a prohibited practice as ‘a practice
prohibited in terms of Chapter 2’,
3
which means that the term covers
‘those types of conduct which the Act prohibits because they have or
may have anti-competitive effects or are the product of unacceptable
uses of market power’.
4
The complaint procedure has been the subject of several prolonged
legal challenges. The Competition Appeal Court (‘CAC’) referred to
these attempts to escape responsibility as the ‘Stalingrad’ method of
litigation after the attritional methods of warfare used during the siege of
that city (now Volgograd) in World War II.
5
The CAC observed with
1
Competition Commission v Yara (SA)(Pty) Ltd 2013 (6) SA 404 (SCA).
*BAcc LLB (Stell).
**BComm LLB (Stell) PhD (Edinburgh).
2
Competition Act 89 of 1998 ch 5, part C, ss 49B–51.
3
Competition Act s 1(1)(xxiv).
4
For summaries of these basic concepts, see Premier Foods v Manoim NO (20147/2014)
[2015] ZASCA 159 (4 November 2015) para 10 and Sutherland & Kemp, Competition Law of
South Africa (LexisNexis RS 11 2012) 5–3.
5
Senwes Ltd v Competition Commission (87/CAC/Feb09) [2012] ZACAC 3 (3 February
2010) para 4; Woodlands Dairy (Pty) Ltd & another v Competition Commission 2010 (6) SA 108
(SCA) para 8: ‘a veritable forest of interlocutory paper is generated in order to prevent cartel
disputes from being determined on their merits’. See also Woodlands Dairy (Pty) Ltd &
Milkwood Dairy (Pty) Ltd v Competition Commission 88/CAC/Mar09 07/12/2009 at 17 where
the CAC stated that ‘litigation appears to be developed like a jurisprudential chain novel’ and
then observed: ‘How, I ask, will we ever implement the promise of the Competition Act with
this kind of conduct?’. See also the observations of Munyai, ‘The interface between
competition and constitutional law: Integrating constitutional norms in South African
competition law proceedings’ (2013) 25(3) SAMLJ 326 at fn 9 and his previous view ‘Making
administrative penalties work’ (2008) 16 JBL 23 at 24.
311
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concern in South African Breweries Ltd and others v Competition
Commission
6
that, as a result of prolonged procedural challenges, a large
number of prohibited practices complaints will never be heard or
decided on their merits.
7
These challenges are indicative of competing
expectations of the competition authorities on one side and the respon-
dents on the other.
Structures and procedures of competition law should allow for
expeditious and effective enforcement of substantive competition rules,
8
if this area of the law is to achieve the multifarious purposes envisaged by
the Act.
9
Procedures that continually invite legal challenges threaten ‘to
undermine the right of complainants and the public... to get access to
justice’.
10
It could allow respondents who contravened the Act to escape
liability
11
or receive light fines.
12
Moreover, unnecessarily formalistic
13
or technical procedures increase the cost of achieving the goals of
competition law and will make it more difficult to protect competition,
both for the Commission and complainants.
However, these concerns have to be weighed against the need to act
fairly towards respondents who have been accused of contravening the
Act. Powerful sanctions in the form of large fines may be imposed for
contravention of competition law, while the powers of competition
authorities to investigate contraventions of competition law are inva-
6
South African Breweries Ltd & others v Competition Commission (114/CAC/Nov11) [2012]
ZACAC 8 (14 November 2012).
7
South African Breweries (SCA) para 99.
8
In the words of the chair of the Competition Tribunal, Norman Manoim: ‘Slow justice is
no justice’, as quoted from a speech delivered to the Law Society of the Northern Provinces
Competition Law Committee at a breakfast on 19 October 2010. See Coetser & Raath, ‘A Long
and Expensive Wait — Assessing the Procedure for Adjudicating Complaints’, Paper for
Eighth Annual Competition Law, Economics & Policy Conference (2014) 1.
9
Competition Act preamble and s 2.
10
South African Breweries & others v Competition Commission (134/CR/DEC07) [2011]
ZACT 73 (16 September 2011) para 98.
11
See for example Woodlands Dairy (SCA); Loungefoam (Pty) Ltd v Competition Commis-
sion South Africa & others, Feltex Holdings (Pty) Ltd v Competition Commission South Africa &
others (102/CAC/Jun10) [2011] ZACAC 4 (6 May 2011).
12
In, for example, Competition Commission & others v American Natural Soda Ash
Corporation (49/CR/Apr00) [2008] ZACT 92 (4 November 2008), the Commission and
respondent agreed to a very low fine of R9,7 million.
13
Allegations of exaggerated formalism have often been made against the courts and the
CAC. See for instance: Woodlands Dairy (SCA) paras 11, 33; Loungefoam (CAC) paras 40, 48ff;
Yara South Africa (Pty) Ltd v Competition Commission, In re: Competition Commission v Sasol
Chemical Industries Ltd, In re Omnia Fertiliser Ltd v Competition Commission [2011] 1 CPLR
78 (CAC) para 15. See especially the long comments in South African Breweries (CT) para 97ff,
which the Tribunal itself regarded as unusual ‘but we hope not perceived disrespectful’. See
also the discussion in Davis & Granville, ‘South Africa: The competition law system and the
country’s norms’ in Fox & Trebilcock (eds) The Design of Competition Law Institutions: Global
Norms, Local Choices (Oxford 2013) 285.
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sive.
14
Although it is inaccurate to describe competition law enforce-
ment or fines as criminal in nature,
15
the analogy is not far-fetched.
16
In some cases competition authorities have not been sufficiently
meticulous in following procedures that adequately protect the rights of
respondents.
17
But the CAC, at times, and the courts have equally gone
too far in laying down strict procedural requirements.
18
For this reason,
Dennis Davis, the Judge President of the CAC and a consistent critic of
the overly technical approach, has emphasised that these interests have
to be balanced.
19
He warned against ‘austinian formalism’ and the
‘jurisprudence employed during apartheid’ which is not ‘reflective of the
purposive jurisprudence which seeks to balance the exercise of power,
captured in a doctrine of proportionality which is central to the
constitutional structure’.
20
More recent judgments in the higher courts, namely the Constitu-
tional Court in Competition Commission of South Africa v Senwes Ltd
(‘Senwes’)
21
and the SCA in Competition Commission v Yara (SA) (Pty)
14
Loungefoam (CAC) paras 44–46.
15
South African Breweries (CT) para 140 where it was noted that the major differenceis that
competition law cannot lead to imprisonment or deprivation of liberty. See also Competition
Commission of South Africa vSenwes Ltd 2012 (7) BCLR 667 (CC) para 65. See also the
criticism of Woodlands Dairy (SCA) para 11 discussed in n16 and n18 below.
16
Woodlands Dairy (SCA) paras 10–11 where it was stated that fines ‘bear a resemblance’ to
criminal sanctions; South African Breweries (CT) para 43; Loungefoam (CAC) para 44 where
powers of the Commission were compared to police powers and para 46 where the CAC
remarked that the Commission itself described its enforcement processes as ‘prosecutions’.
See Senwes (CC) para 65 where the Constitutional Court was critical of this language in the
context of Tribunal powers but not those of the Commission. See also Prins & Koornhof,
‘Assessing the nature of competition law enforcement in South Africa’ (2014) 18 Law
Democracy and Development 136 at parts 3 and 4. Munyai, (2013) 29(3) SAMLJ 326 especially
at 335 on police powers.
17
The procedures followed by the Commission as described by Woodlands Dairy (SCA) is
perhaps the clearest case. Loungefoam (CAC) paras 53–54 where it was stated that this was true
of all cases where adjudicatory bodies have intervened.
18
The highwater marks probably are: the procedural requirements laid down in Woodlands
Dairy (SCA);Loungefoam (CAC);Senwes v Competition Commission (118/2010) [2011]
ZASCA 99 (1 June 2011); Yara (CAC). See especially Woodlands Dairy para 11 where the court
refused to take the need for effective enforcement into account on the basis that ‘[t]his
approach would imply that the more difficult it is to prove a crime, such as corruption, the
fewer procedural rights an accused would have’. See also Munyai, (2013) 29(3) SAMLJ 326 at
329–330.
19
South African Breweries (CAC) para 44. See also on the balancing of interests, Munyai,
(2013) 29(3) SAMLJ 326 at 331.
20
Woodlands Dairy (CAC) at 11–12. See also South African Breweries (CAC) para 44. See
Woodlands Dairy (SCA) para 34 where this was described as ‘tar brushing’. See also the
comments of Davis JP in South African Breweries (CAC) para 54 where the court now accepted
that this has chanted thanks to the Senwes (CC). See also Davis & Granville, (Oxford 2013)
285–286 in the conclusion.
21
Senwes (CC).
THE COMPLAINT PROCEDURE RECONSIDERED 313
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