Competition Commission fights for its powers

The Constitutional Court heard two cases last week, in which the Competition Commission appealed against decisions made.

The Constitutional Court heard two cases last week, in which the Competition Commission appealed against decisions made in favour of grain storage and trading company Senwes as well as fertiliser companies Omnia and Yara South Africa.

This came after the companies posted legal challenges to the scope and full extent of the Competition Commission’s powers. If the Constitutional Court finds against the commission, it could directly affect the commission’s ability to investigate and prosecute anti-competitive behaviour.

Thami Bolani, chair of the National Consumer Forum, said it is crucial that the commission retains its powers to investigate and prosecute anti-competitive practices.

“Consumer rights and interests in our country will be undermined greatly if the commission’s powers are curtailed,” Bolani said. “It should not only retain its current powers but be given even more powers in exercising its role as a consumer protector.”

The Yara and Omnia case stems from a decision by the Competition Appeal Court (CAC), which upheld the companies’ appeal against a decision by the Competition Tribunal. The CAC decision prevented the commission from introducing new complaints against the companies, based on evidence about collusive meetings given by Sasol witnesses during the course of investigations into cartel activity.

Yara and Omnia argued the new complaints were not covered by the original complaint, laid by Nutri-Flo against Sasol, and contended that the commission did not have the authority to go beyond that complaint.

The CAC found in favour of the companies, and released them from appearing before the tribunal to answer charges of operating a cartel. The commission applied for leave to appeal the CAC decision and to appeal in the Constitutional Court.
Similarly, in the Senwes case, Senwes allegedly charged grain traders more for grain storage than farmers, and the tribunal found it guilty of anti-competitive practices. But Senwes contended that the margin squeeze fell outside the ambit of the original referral and also outside the scope of the tribunal.

Senwes’s appeal was refused by the CAC, but upheld by the Supreme Court of Appeal (SCA) in June. If these rulings are upheld, the commission’s ability to uncover unlawful anticompetitive conduct and have it adjudicated and penalised will be seriously constrained.

“It is unrealistic to suggest that after investigations, the referral should still be confined to the allegations in the initiating complaint,” the commission said in court papers. – Robyn Joubert