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South Africa: Immediate Response To Anti-Competitive Conduct During The State Of National Disaster

 |  March 23, 2020

With several confirmed cases of COVID-19 in the Republic, President Cyril Ramaphosa declared on 15 March 2020, a State of National Disaster and announced several immediate measures that should be undertaken to prevent the spread of the virus and to allow for immediate management of those already affected. Some of these measurers have been given effect by the Regulations published in the Government Gazette of 18 March 2018 by the Minister of Cooperative Governance and Traditional Affairs.

With heightened concerns about COVID-19, the Competition Commission has noted several complaints from the public about rising prices for essential products in particular some food, healthcare and hygiene products. There are also concerns of suppliers inflating prices as government, retailers and private healthcare companies embark on emergency procurement of products related to the curbing and managing the spread of COVID-19.

The Competition Act prohibits various acts of excessive pricing and collusive behaviour by suppliers and retailers which artificially inflates prices and exploits consumers. The penalties for such offences are severe, including a 10% of the firm’s annual turnover for a first time offence and 25% of annual turnover for a repeat offence. For collusive behaviour, the directors of companies which engage in such acts face potential imprisonment for a period of up to 10 years.