In a recent judgment (Commission v Loungefoam (Pty) Ltd, Vitafoam SA (Pty) Ltd and others) the Tribunal has again confirmed an important procedural issue in relation to the process for initiating complaint investigations.
In this instance, the Commission sought to amend the particulars of its complaint referral, inter alia to cite additional respondents and broaden the scope of its referral to include further and alternative charges. The respondents objected to the amendments on the basis that the respondents and conduct referred to were not expressly included in the complaint initiation.
In ruling in the Commission's favour, the Tribunal clarified that the initiation of an investigation is quite distinct from the complaint referral, and eventual prosecution thereof. The initiation of a complaint is, of necessity, preliminary and need not contain all averments required to make a referral.
For policy reasons rooted in the public interest, the Tribunal clearly does not wish to fetter the Commission's ability to extend the scope of its investigation at any stage to include additional conduct or alleged participants. All that is required for a valid complaint initiation is to set out (in the broadest of terms) the prohibited practice being investigated - no mention of specific facts or participants need to be specified. Provided that a "rational link" can be established between the initiation and subsequent referral (a low threshold test), then the referral is valid and the Tribunal was unequivocal in stating that "the Commission is not required to initiate a complaint against each and every respondent that it may, after its investigation wish to prosecute."
The implication of this approach for players in an industry being investigated is stark. Once an investigation has been duly initiated into the conduct of certain players in an industry, those players not at first implicated, are not secure in the knowledge that they are off the hook. As such, players might have no inkling of the investigation until much later in the process. They are at a distinct disadvantage when it comes to negotiating a settlement or even applying for leniency.
At the same time, where an investigation is drawn out, players implicated late in the game will not be able to avail themselves of the statutory prescription period, even where conduct has ceased more than three years prior to being cited as a respondent.
Chris Charter, Director, Competition
Scarlate Nkiwane, Associate, Competition