Almost every industry and profession in SA has a trade association and their activities range from research to lobbying.
There are also various export councils, which were established by the Department of Trade and Industry to create a platform for companies to co-operate on export development and promotion.
Werksmans competition law director Paul Coetser said in some cases the commission had found industry associations were being used as forums for price fixing but that should not happen if the associations were fully aware of competition law.
“I think trade associations are definitely within the commission's sights, but I would be very surprised if steps were taken to outlaw them,” he said.
Competition commissioner Shan Ramburuth said in an interview 10 days ago that the commission had no problem if companies worked within South African industry associations for legitimate purposes, such as discussing policy issues or interacting with the government.
As far as export activity was concerned, Coetser said the Competition Act provided for companies to apply for an exemption to promote exports. That implicitly recognised there could be occasions when it would be good for the country if companies were allowed to engage in certain practices that might otherwise appear to be anticompetitive, such as forming joint ventures to bid for projects.
There were divergent views on whether collusion in overseas markets was acceptable, Coetser said. One argument was that colluding in overseas markets had no negative economic effect on SA. But the Competition Commission would probably argue that any form of collusion in SA was subject to their jurisdiction and that it indirectly affected the country because companies colluding in overseas markets could emerge stronger in SA.
Riaan le Roux, chief operating officer of Trade and Industry SA, which is a division of the Department of Trade and Industry, said emphatically that “any export councils that engage in anticompetitive behaviour such as price fixing, forming cartels and collusion are in contradiction of the law and will be liable to prosecution”.
He said the mandate of the export councils was very clear. They were expected to strive to increase the growth of exports, try to grow the number of exporters in SA, and promote the entry of small and black exporters into the arena.
Coetser said if, for example, South African construction companies were considering co-operating on a tender for a project in Dubai, he would strongly advise them to approach the commission first. “They should say this is what they intend to do, and does the commission approve? The best thing is to take no chances but play open cards,” he said.
Su Birch, CEO of Wines of SA, the wine industry's export council, said she believed there was no chance for South African wine companies to co-operate in foreign countries in setting prices, dividing markets or engaging in other uncompetitive practices.
“The wine market is one of the most ferociously competitive, overtraded markets in the world, with the power resting with supermarkets in most countries,” she said.
Source: Business Day
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