Competition Act, 1998 (Act No. 89 of 1998)

Notices

Guidelines for the Determination of Administrative Penalties for Failure to Notify Mergers and Implementation of Mergers Contrary to the Competition Act No. 89 of 1998, as amended

3. Legislative Framework
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3.1. These guidelines have been prepared in terms of section 79(1) of the Act which allows the Commission to prepare guidelines to indicate its policy approach on any matter falling within its jurisdiction in terms of the Act. These guidelines are aimed at providing guidance in terms of section 79(2)(b) of the Act and are not binding on the Commission, the Tribunal or the CAC in the exercise of their respective discretion, or their interpretation of the Act.

 

3.2. Section 13A(1) of the Act obliges a party to an intermediate or large merger to notify the Commission of that merger in the prescribed manner and form.

 

3.3. Section 13A(3) prohibits parties to an intermediate or large merger from implementing that merger until it has been approved, with or without conditions, by the Commission in terms of section 14(1)(b), the Tribunal in terms of section 16(2) or the CAC in terms of section 17 of the Act.

 

3.4. In terms of section 59(1)(d) of the Act, the Tribunal may impose an administrative penalty if the parties have:
“(i) failed to give notice of the merger as required by Chapter 3 of the Act;
(ii) proceeded to implement the merger in contravention of a decision by the Commission or Tribunal to prohibit that merger;
(iii) proceeded to implement the merger in a manner contrary to a condition for the approval of that merger imposed by the Commission in terms of section 13 or 14, or the Tribunal in terms of section 16; or
(iv) proceeded to implement the merger without the approval of the Commission or Tribunal, as is required by this Act.”

 

3.5. In respect of section 59(1)(d)(iv), the need for approval only arises if the merger is notifiable under the Act. Approval is thus required prior to implementation of the merger.

 

3.6. Pursuant to sections 49D and 58(1)(b) of the Act, the Commission and the respondent may reach an agreement on the terms of an appropriate order, which may be confirmed by the Tribunal. The terms of such order may include an agreement on the payment of an appropriate administrative penalty.

 

3.7. In terms of section 27(1)(b) of the Act, the Tribunal may adjudicate on any matter that may in terms of the Act be considered by it and upon making a determination, may make any order provided for in the Act. In terms of section 58(1)(a)(iii), orders that the Tribunal may make include the imposition of an administrative penalty.