THE COMPETITION TRIBUNAL’S NEW SIX STEP APPROACH TO THE CALCULATION OF PENALTIES UNDER THE COMPETITION ACT

Tuesday, May 29, 2012
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In the recent judgment of the Competition Tribunal in the Competition Commission v Aveng Africa Limited et al, the Tribunal established a six step guideline on the calculation of penalties. The Competition Act provides that an administrative penalty may not exceed 10% of a firm’s annual turnover in the Republic and its exports from the Republic during the firm’s preceding financial year.rnrnThe previous absence of guidelines was criticised by the Competition Appeal Court in its judgment in Southern Pipeline Contractors v the Competition Commission.rnrnThe Tribunal used the judgment in Southern Pipeline and the European Union (“EU”) guidelines to formulate its six step approach, recognising that the EU guidelines do not correspond exactly with the factors set out in the Competition Act and therefore require adaptation.

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