Answer:

For the first time in South Africa, directors and managers will face jail time for participation in a cartel. Amendments to the Competition Act which introduce PERSONAL criminal liability for cartel conduct came into effect from 1 May 2016.

The amendment introduces criminal liability for directors and individuals with ‘management authority’ who are responsible for - or knowingly acquiesce in - cartel conduct. Cartel conduct includes the direct or indirect fixing of prices (INCLUDING purchase prices) and trading CONDITIONS, market division, and collusive tendering among competitors or potential competitors. All members of the management chain (not only directors) are potentially at risk of prosecution.

An individual can only be CHARGED if the company involved has already been found to have contravened the cartel provisions by the Competition Tribunal, or it has admitted a contravention in a formal consent order. The vast majority of cartel cases investigated by the Competition Commission in South Africa to DATE have been resolved through consent agreements. This development means that firms accused of engaging in cartel conduct will have to think more carefully before admitting to a contravention to settle a case for commercial reasons.