THE Competition Commission’s procedure regarding its initiation and referral of complaints to the Competition Tribunal has been a thorn in its side since the Supreme Court of Appeal’s decision in the milk cartel case in 2010. The decision — that the commission’s investigation and complaint had to be reflected in the ultimate referral to the tribunal — led to several challenges by firms of the commission’s procedure.
This resulted in the commission abandoning several cases purely on the discrepancies between the initiation of the investigation and the ultimate case referred for adjudication.
The appeal court found the commission involved the entire milk industry in its referral to the Competition Tribunal, despite there being initial complaints only against Parmalat, Ladismith Kaas and Clover. It le d to the commission abandoning its case against all the milk producers, which opened the door for several other challenges.
Beer brewer SAB was one of the companies that last year successfully challenged the anticompetitive case against it and its independent distributors.
The commission continued its fight to obtain clarity on how to approach its investigations and referrals. The matter that turned the tide was the Constitutional Court’s decision in the Senwes case, involving the company’s alleged abuse of dominance in the grain storage market.
The Constitutional Court judgment in April meant the commission did not have to be so precise in how it formulates its "referral" — the document that sets out its complaint.
It may have been a victory for the commission, but competition law practitioners are not convinced that the Senwes judgment is the final word.
Martin Versveld, head of competition practice at law firm Webber Wentzel, says the decision is not a model of clarity. "There is a lot of criticism against the decision. I suspect that parties that have a lot at stake, such as SAB, are likely to escalate the matter and have it determined. The Senwes decision recognises the fact that the tribunal has an inquisitorial function and has the right to interrogate and supplement the course of complaints, but equally recognises that parties have a right to know the case they have to meet."
Daryl Dingley, a partner at Webber Wentzel, says there are still two opposing approaches: the commission wants flexibility to have a broad complaint referral and to refine its case and pleadings as the proceedings unfold before the tribunal. Companies have the right to know what case they have to meet before the hearing starts.
Commissioner Shan Ramburuth last year tried to assuage some of the concerns of competition law practitioners about the level of flexibility the commission would allow itself in its investigations and subsequent referrals. The formalistic approach, where the commission’s initiation and referral had to correspond, was one extreme, he said. He did not anticipate that the Senwes judgment would take matters to the opposite extreme, where a firm was left in the dark as to what the commission’s case against it was.
Mr Versveld is still concerned that if the referral to the tribunal is not "well articulated", the case can become a "massive fishing expedition" and the commission can use the referral to "shake the tree" to see what falls out.