Weeks, Keith --- "Enforcement Priorities for New Agencies: Lessons from South Africa on the Deterrence of Cartel Conduct" [2012] ELECD 832; in Whish, Richard; Townley, Christopher (eds), "New Competition Jurisdictions" (Edward Elgar Publishing, 2012)

Book Title: New Competition Jurisdictions

Editor(s): Whish, Richard; Townley, Christopher

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9780857939517

Section: Chapter 7

Section Title: Enforcement Priorities for New Agencies: Lessons from South Africa on the Deterrence of Cartel Conduct

Author(s): Weeks, Keith

Number of pages: 29

Extract:

7. Enforcement priorities for new
agencies: lessons from South Africa
on the deterrence of cartel conduct
Keith Weeks

1. INTRODUCTION

Achieving effective deterrence is a particular challenge for new agencies,
which are often confronted with highly concentrated markets where anti-
competitive conduct is deeply embedded in the culture of doing business.
These structural and behavioral characteristics provide fertile ground for
cartels to flourish. However, cartels are notoriously difficult to detect.
It is commonly understood that this is a consequence of the secretive
nature of collusive arrangements.1 However, in developing countries the
problem is further exacerbated by the fact that such conduct is entrenched
in the culture of doing business. This has certainly been the case in South
Africa where, prior to 1999, effective enforcement of competition law
had been weak or non-existent. To make matters worse, cartels in certain
sectors had been sanctioned by law or facilitated by government agencies
during the apartheid era. With the transition to democracy most of these
cartels were formally disbanded and the relevant producers, suppliers

1 This secretiveness naturally arises in a context where firms understand that

their conduct is harmful and illegal. In new jurisdictions, where there has not been
a history of competition law enforcement, firms that are unaware of the implica-
tions of their activities may be more rather than less open about their involvement
in restrictive horizontal practices. This may be the case, for example, where health-
care providers have justified collective setting of tariffs as necessary to ...