South Africa's competition authorities have been very busy since its introduction in the late 90s. This is especially true in the realm of investigating mergers and acquisitions for possible violations of the Competition Act. It is only in recent times that the competition authorities have made headlines in the area of prohibited practices

(such as collusion and price fixing), with investigations launched, for example, in the agricultural, banking and automobiles sectors. There is however a general sentiment that South Africa faces a much bigger competition problem than these cases illustrate. Deputy Trade and Industry Minister, Rob Davies, believes the new draft of the Competition Amendment Bill will ?tighten up capacity to deal with collusive behaviour?.

There are areas in the economy where there are either inherent monopolies or complex monopolies. Inherent monopolies are typically privately owned monopolies which attained monopoly status before the effective date of the Competition Act whilst complex monopolies are co-operative arrangements between competitors that can be maintained without resort to an easily discernible anti-competitive conduct. Accordingly the draft Competition Amendment Bill aims to insert provisions into the Competition Act to effectively deal with these scenarios.

The current draft Competition Amendment Bill (April 2008) does exactly that by stipulating that a complex monopoly is present in a market where at least 45% of the goods or services in that market is supplied to, or by two or more firms and these firms conduct their respective business affairs in a co-ordinated manner, irrespective of whether they do so voluntary or not or with or without agreement or concerted practice. Participation in such a complex monopoly is prohibited if the complex monopoly has the effect of substantially preventing or lessening competition in that market and the market in which the complex monopoly subsists is characterised by either a restriction on supply, a lack of innovation, exploitive pricing, exclusionary acts, high entry barriers, uniform pricing, similar trading conditions or other indicators of parallel conscious conduct.

To give more teeth to the investigations into the so-called complex monopolies, the Bill introduces a new section which allows the Competition Commission to initiate a market enquiry in order to study the general state of competition in a market for a particular good or service. This may happen without exclusive reference to the conduct or activities of any particular named business enterprise. This new section amplifies the Commission's powers under the current Act and gives more structure, efficiency and transparency to these powers. Based on the outcome of the market enquiry the Commission may initiate a complaint against the whole market or just one or a few active enterprises, enter into a consent order with any respondent or initiate and refer the complaint directly to the Competition Tribunal. However the Commission may also report to the Minister of Trade and Industry and recommend new or amended policy, legislation or regulation or make recommendations to other authorities.

The Competition Amendment Bill also introduces individual liability for directors and individuals directly responsible for engaging in price fixing or cartel-like behaviour. Under the current Act, directors would not be held liable for such involvement, and the final penalty will be paid by the company and ultimately the shareholders whilst the directors escape liability. The new section 73A proposes that involvement by persons, under certain conditions, in price fixing or cartel- like behaviour would constitute a penalty under the Competition Act and be punishable either a fine of up to R500 000 or imprisonment of up to 10 years or both. The new penalty should therefore move directors to at least consider the provisions of the Competition Act, especially given the widened scope of the current draft Competition Amendment Bill.