Powers of the Competition Commission Extended – Market Inquiries

The provisions of the Competition Amendment Act 1 of 2009 (the Amendment Act) were signed into law on 28 August 2009 and on 8 March 2013 the Minister of Trade and Industry announced an effective date of 1 April 2013 for the provisions relating to market inquiries.

A market inquiry is a formal inquiry into the general state of competition in a market for particular goods or services, without necessarily referring to the conduct or activities of any particular named firm. The market inquiry provisions are set to broaden the scope of the Competition Commission to investigate a key sector as a whole. Until now, if the Commission was concerned about the state of competition in a market, it was obliged to investigate the activities of the individual firms in the market that it suspected might be involved in anti-competitive practices.

The Commission may conduct a market inquiry on its own initiative or at the request of the Minister, if it reasonably believes that any feature of a market prevents, distorts or restricts competition, or if it believes that the inquiry will achieve the purposes of the Competition Act.

The Commission must, at least 20 business days before the commencement of a market inquiry, publish a notice in the Government Gazette announcing the establishment of the market inquiry, setting out its terms of reference and inviting members of the public to provide information. The Commission may amend the terms of reference, including the scope of the inquiry, or the time within which it is expected to be completed, by further notice in the Gazette.

The Commission will have extensive investigative powers in terms of the market inquiry provisions, including the power to summon individuals to answer questions on oath and deliver or produce documents to the Commission.

Upon completing a market inquiry, the Commission must publish a report of the inquiry in the Gazette, and must submit the report to the Minister with or without recommendations.

The remaining provisions of the Competition Amendment Act, which provide, among others, for criminal prosecution of firms and individuals suspected of being engaged in anti-competitive practices, have not yet been brought into effect, and it is not known at this stage when this is likely to happen.

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