Towards Clarity

This article analyses the recent developments in South African competition law regarding the calculation of administrative penalties.

In any penalty regime, it is said that the most important consideration is deterrence. After weighing up the likely gains from the prohibited conduct and the probability of being caught and successfully prosecuted, it must not make commercial sense for a firm to engage in the prohibited conduct.

In South Africa, the tools which exist to promote deterrence should combine an administrative penalty with the threat of civil damages, reputational harm and criminal prosecution. However, the civil damages aspect remains largely unexplored and criminal sanctions are not yet in force. The authorities are therefore heavily reliant on administrative penalties to deter potential competition infringers.