In South Africa, agreements, concerted practices, or decisions by an association of competitors, are prohibited if it has the effect of substantially lessening or preventing competition in a market.

In terms of section 4(1)(b)(i) of the Competition Act No 89 of 1998 (“the Act”):

“An agreement between, or concerted practice by, firms, or a decision by an association of firms, is prohibited if it is between parties in a horizontal relationship and if – (a) it has the effect of substantially preventing, or lessening, competition in a market, unless a party to the agreement, concerted practice, or decision can prove that any technological, efficiency or other pro-competitive gain resulting from it outweighs that effect”.

This prohibition can be overcome by a showing that the pro-competitive gains outweigh the anti-competitive effect of the agreements. However, in practice, the agreements that threaten the most serious anti-competitive effects like price fixing, market division, and collusive tendering, are prohibited per se, without the Act requiring a show of actual harmful effect.

The question thus arises, if you, as a competitor, do not actively participate in an agreement or the making of a decision, can it still be considered a contravention of the Act as aforesaid?