12 September 2011

Commission to appeal CAC decision allowing it to amend complaint referrals

The Commission has lodged an application for leave to appeal the decision of the Competition Appeal Court (the CAC) in the Loungefoam matter (Commission v Loungefoam (Pty) Ltd, Vitafoam SA (Pty) Ltd and others). The CAC upheld appeals by Loungefoam, Gommagomma, Steninhoff International and Steinhoff Africa against a Tribunal decision allowing the Commission to amend its complaint referral and join Steinhoff as a party to the case.

The appeal follows applications filed by the Commission against the CAC's decisions in the Yara/Omnia and Netstar matters. The Commission views the cumulative effect of these decisions as constraining its ability to investigate anticompetitive conduct and to compromising the rights of third parties to lodge complaints of anti-competitive conduct.

In the event that the Commission is granted leave to appeal the CAC decision and ultimately succeeds, the implications for players in an industry are significant. Once an investigation has been duly initiated into the conduct of certain players in the industry, those 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. Where an investigation is drawn out, players implicated late in the game may 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.

Nick Altini, Director, Competition

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