The Competition Commission has lost three cartel cases before the Competition Tribunal in the last two months.

These cases involved alleged price-fixing and collusion against Natal Portland Cement Cimpor (NPC), eleven furniture removal truck companies including Stuttaford Van Lines and Pickfords Removals, and Tourvest Goldings and Trigon Travel.

The tribunal determined in these cases that the commission had insufficient proof of cartel arrangements in the cases, respectively.

Law firm Werkmans Attorneys director Pieter Steyn says the three cases lost before the tribunal are instructive that they support a trend whereby firms are increasingly opposing cases brought against them by the commission.

He explains that, in the past, the commission primarily relied on leniency applications and settlement agreements to prosecute cartels. However, the commission has started to increasingly take action against firms that do not settle with it.

Steyn highlights that the criminalisation of cartel conduct since May 2016 may be a partial explanation for this trend.

The directors and managers of a successful leniency applicant, or a firm which settles with the commission, are not guaranteed immunity from personal criminal prosecution. Reputational damage and the risk of civil damages claims must also be taken into account before a firm decides to apply for leniency or settle with the commission, he adds.

Steyn further avers that a careful and thorough analysis of the facts, as well as the strength and weaknesses of available defences, is vital.

“The cases indicate that the ‘checks and balances’ in the structure of the competition authorities in terms of the Competition Act is functioning effectively and fairly. The tribunal is acting independently and holding the commission accountable to prove its cases on the facts.

“Drawing inferences is not sufficient. In future, the commission may be more circumspect in assessing which cases it brings before the tribunal – particularly given the costs, resources and time involved in opposed tribunal referrals.”

“It is interesting that the commission lost the NPC and furniture removal cases even though firms involved in the conduct had admitted liability in terms of a leniency applications and settlement agreements. These firms would have been obliged to fully cooperate with the commission in its prosecution of the cases,” Steyn points out.

He adds that the fact that the commission was unsuccessful indicates that the commission’s reliance on such firms is not necessarily a decisive factor favouring a commission “win”.

The contestation by firms of cases brought against them by the commission is to be welcomed as it helps to develop the case law and set precedents which assists firms and their advisers to regulate their future conduct.

“Of course, the commission has the right to appeal against the tribunal decisions to the Competition Appeal Court. Any such appeal would, however, have to be carefully considered having regard to the tribunal’s findings on the facts.”