SOUTH AFRICAN COMPETITION COMMISSION PUBLISHES DRAFT PRE-IMPLEMENTATION GUIDELINES
On 17 February 2017, the Competition Commission (Commission) published its Draft Guidelines for the Determination of Administrative Penalties for Failure to Notify a Merger and Implementation of Mergers Contrary to the Competition Act (Draft Guidelines) in the Government Gazette.
In terms of the Draft Guidelines, the Commission will consider the following four factors when determining the appropriate penalty for pre-implementation:
- The nature of the contravention.
- The following ranges of administrative penalties (without fettering the Commission’s discretion in exceptional circumstances):
- For prior implementation of intermediate mergers, the minimum penalty will be an amount equal to double the applicable filing fee for an intermediate merger (ZAR 100 000 or approximately USD 7 630) and the maximum penalty will be equal to ZAR 5 million or approximately USD 381 600.
- For prior implementation of large mergers, the minimum penalty will be an amount equal to double the applicable filing fee for a large merger (ZAR 350 000 or approximately USD 26 700) and the maximum penalty will be ZAR 20 million or approximately USD 1 526 400.
- Aggravating and mitigating factors:
- Aggravating factors include, but are not limited to, an attempt to avoid scrutiny by the regulator, or a lengthy contravention period.
- Mitigating factors include, but are not limited to, proactiveness in approaching the Commission, or the seeking of competition law advice in relation to the transaction.
- The statutory limit: Where the administrative penalty determined exceeds the maximum penalty of 10% of the combined annual turnover of the acquiring and transferred firms during their preceding financial year, the Commission will apply the maximum penalty.
The Commission has invited written comments on the Draft Guidelines to be submitted by 15:30 on 17 March 2017.
For more information, please contact the Bowmans Competition Practice.