There have been no publicised noteworthy penalties that have been imposed on any entities for engaging in prohibited practices that we are aware of.

Yes. In May 2020, the ESCC issued its decision on the School Uniform Suppliers case. The case relates to conduct by various suppliers in terms of which they concluded exclusive supply agreements with some schools for the supply of school uniforms. The ESCC found that these agreements had the object or effect of restricting competition in the market for the supply of school uniforms. The ESCC also found that the exclusive supply agreements created barriers to entry for new participants, and were detrimental to consumers as they increased prices for school uniforms, which would otherwise be lower in a competitive environment.

The ESCC further found that certain suppliers engaged in discussions on prices to be charged for school uniforms and price increases, which further distorted competition in the market. The above non-compete conduct was deemed inconsistent with the Competition Act and various directives were issued against both, the schools, and the uniform suppliers in order to remedy the effects of the conduct. 

1. Exclusivity Clauses

In terms of the Competition Act, agreements, decisions or concerted practices that seek to distort or have the effect of significantly distorting competition in the country, or a particular part of it, are prohibited. The ESCC will, therefore, seek to establish the following elements in an inquiry relating to the legality exclusivity clauses:

• whether an agreement exists;
• the object or effect of that agreement; and
• if the object or effect is the distortion or prevention of competition, whether it does so to an appreciable extent.

In August 2019, the ESCC published a report on its investigation into exclusivity agreements between various schools and school uniform suppliers. The findings revealed that 192 schools, both, in the public and private sectors, concluded exclusive supply agreements with uniform suppliers, which in turn, compelled parents to purchase school uniforms from only that supplier. The ESCC, in assessing the agreements, considered various aspects of the market for school uniforms, applying the above methodology and an effects analysis, which looked at:

• the foreclosure effects of the exclusivity clauses;
• the exit of certain suppliers from the market for school, uniforms as a result of the exclusivity arrangements;
• the limited choice of suppliers for consumers seeking to procure uniforms;
• limited access to the market by competitors; and
• the barriers to entry in the market for school uniforms.

The ESCC concluded that the agreements entered into by the schools and school uniform suppliers have the effect of restricting, preventing or distorting competition to an appreciable extent and that the adverse effects of the supply agreements outweigh the procompetitive effects in the market. The ESCC also found that the supply agreements resulted in the creation of barriers to entry, foreclosed competitors in the market, limited access of competitors in the market and limited choice of school uniform suppliers to consumers in the market.

2. Non-Compete Restraints

Non-compete clauses will be analysed on a case-by-case basis. Where non-compete clauses are aimed at market allocation or division, these will be automatically prohibited. However, where these clauses exist in the context of a sale of business, they may be justifiable.

As mentioned above, in April 2021, the ESCC launched an investigation into a price increase by Dups Funeral Home and Cremation (Pty) Ltd, after the funeral home announced that it would be charging an additional fee for all COVID-19 related deaths.

No.

Yes. That being said, we are not aware of any criminal sanctions being imposed or prosecutions pursued, for anticompetitive conduct.