Business Practices Committee Report 67

The Committee, a statutory body within the Department of Trade and Industry, administers the Harmful Business Practices Act, 71 of 1988, (the Act). The purpose of the Act is to provide for the prohibition or control of harmful business practices, and for matters connected therewith.

A "business practice" includes any type of advertising and a "harmful business practice" is any business practice which, directly or indirectly, has or is likely to have the effect of harming the relations between businesses and consumers, unreasonably prejudicing any consumer or deceiving any consumer;

In terms of section 4 of the Act the Committee may undertake such preliminary investigation as it may consider necessary into, or confer with any interested party in connection with, any harmful business practice which allegedly exists, or may come into existence. The Committee may, in terms of section 8(1) of the Act, and subject to section 8(2), on its own initiative undertake such investigation as it may consider necessary into any harmful business practice which it has reason to believe exists or may come into existence.

The Committee has wide investigative powers. It may undertake a section 4(1)(c) or a section 8(1)(a) investigation in terms if the Act into the business practices of specific entities or persons. Section 4(1)(c) investigations are known as "informal" investigations and section 8(1)(a) investigations are called "formal" investigations. An informal investigation enables the Committee to undertake such preliminary investigation as it may consider necessary into, or confer with any interested party in connection with, any harmful business practice which allegedly exists or may come into existence. Notice of informal investigations is not published in the Government Gazette, as opposed to formal investigations. The purpose of an informal investigation is to enable the Committee to make a more informed decision as to whether a formal investigation is called for. The Minister of Trade and Industry is not empowered to make any decisions on the strength of an informal investigation. He may do so in terms of a section 8(1)(a) or formal investigation.