This article considers the potential for changes in the
treatment of vertical agreements under South African competition
law as a result of recent amendments to the Competition Act, as
well as current policy views within the law-makers and
regulators.
Section 5(1) of the South African Competition Act prohibits
vertical agreements that substantially prevent or lessen
competition, unless technological, efficiency or other
pro-competitive gains arising from the agreement outweigh the
anti-competitive effect. This provision is not dissimilar from
corresponding prohibitions in competition laws elsewhere.
Since the advent of the Competition Act, contraventions of
section 5(1) have been punishable with an administrative penalty
only for a repeat offence. A first-time offender could be the
subject of a behavioural order, most likely to revise the agreement
in question to remove the restrictive restraints.
