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Says DTI director-general Tshediso Matona: "There are certain markets where you see very co-ordinated behaviour." He highlights Reserve Bank governor Tito Mboweni's remarks of how the prime lending rates of the big commercial banks ? Standard, Absa, Nedbank and First National Bank ? always mirror each other.

Banking Council MD Cas Coovadia is "surprised" by the possibility of a fresh probe into the industry's practices. "We co-operated with the commission in its banking inquiry. We are still in that process."

After the recent crackdown a host of companies have sought leniency (immunity or lower fines) from the commission ? with 41 applications coming in the past 18 months. SAA, Tiger Brands, Sasol, ArcelorMittal, Aveng, the Reclamation Group, Adcock Ingram, and milk producers are on the growing list of offenders that have been fined since the commission was launched 10 years ago.

Says Matona: "The damage that antitrust behaviour causes in the economy is incalculable. We will leave no stone unturned to ensure that we eliminate this conduct."

Protecting the consumer

Competition law is about protecting the consumer and promoting greater access and participation of small entrants into the economy. The lack of contestability of a market blocks foreign investment. "Economies where there's a fair level of market contestability will receive more investment," says Matona.

Government's bid to break the stranglehold of cartels is in line with an international crackdown. Cartels in SA are the bastard children of the apartheid economy, which was built on close relationships among established players in key sectors ? the operations, literally, of the "Old White Boys' Club".

With state approval, industry associations often agreed on how to regulate their activities. In some sectors, such as cement, the state explicitly sanctioned a cartel so that production volumes were planned collectively. In other sectors, industry bodies were forums for planning a common approach and monitoring members' activities and outputs, including their sales volumes.

In SA, the high levels of concentration in many sectors, together with the tight oligopolies ? a small number of large firms that collectively exert control over supply and a market ? provided favourable conditions for anticompetitive conduct.

Policy makers are now taking a stand against this behaviour. "SA businesses have been getting away with too much," says Ramburuth. "Things are worse than I thought. It was only when we started the investigations that we realised how bad things were. SA is steeped in cartels. Most of these guys/businesses don't know that they've been doing wrong because they've been doing it for so long they think it's normal."

Glamorous to bust and easier to prove

In 1998, the new Competition Act was promulgated, changing the landscape entirely. The competition commission, which emerged from the act, kicked off with the focus on merger control. Later it shifted to examining prohibited practice. "The first port of call was cartels ? they are glamorous to bust and easier to prove," says Cliffe Dekker Hofmeyr director Chris Charter. Edward Nathan Sonnenberg director Mark Garden adds: "The problem was the behaviour. People had been doing things for 30 years, there was little education to say that these practices were now illegal."

In the US, the competition regime is 120 years old. In Europe, it's 60 years old. "So when cartels develop there, they are the real thing ? secretive meetings in airport lounges and smoke-filled rooms. In SA, people have done them for so long they don't realise the behaviour is illegal," says Charter.

Government acknowledges this. "We are an industrial modern economy, sophisticated and complex," says Matona. "If you compare us with similar economies, competition law has a long way to go in SA. It's only now coming of age."

The commission is now moving on to more technical and complicated investigations that attempt to prove abuse of dominance. "This requires a sophisticated level of economic analysis because one needs to go a step beyond proving the conduct exists. One needs to prove that the dominant conduct had a negative effect on competition," says Charter.

In the case against the supermarkets, there is no allegation of price-fixing and cartel-like behaviour. Rather the commission alleges that the retailers are using their size to distort the market. "This is not easy. The investigation is far more nuanced and subtle from a regulatory point of view. There is nothing wrong with being dominant ? as long as you offer the best product at the cheapest price. The problem comes in when you use your size to compete. One needs to gather data, understand the theories of harm, and so on," says Charter.

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