The Competition Act of 2007 has been in operation for almost a decade. Accordingly the Commission expects Eswatini corporate entities operating within the kingdom to have a better understanding and awareness of the conduct required by companies.
The scope of Cartels and Enforcement covers the administration of Sections 30, 31, 32, and 34 of the Competition Act of 2007. This includes investigating cartels, vertical restrictive practices, abuse of dominance, and anti-competitive conduct by associations.
A cartel is an agreement or a concerted action of a group of similar, independent companies which join together to fix prices, to limit production or to share markets or customers between them. Instead of competing with each other, cartel members rely on each other’s’ agreed course of action, which reduces their incentives to provide new or better products and services at competitive prices. As a consequence, consumers and other businesses end up paying more for less quality.
In Eswatini, cartel behavior is specifically prohibited by Section 30 of the Competition Act of 2007.
Since cartels are illegal, they are generally highly secretive and evidence of their existence is not easy to find. The ‘leniency‘ encourages companies to submit evidence of cartels activity to the Commission. The first company in any cartel to do so will be granted immunity from any fine if the conditions attached to leniency are met. This results in the cartel being destabilised.
The Commission also encourages individuals to report any inside knowledge they may have of a cartel existence. If a company is found by the Commission to have participated in a cartel it can settle their case by acknowledging their involvement in the cartel and getting a smaller fine in return. Cartels investigations are resolved either by referral to the Board or by settlement agreement.
Whilst cartels remain an enforcement priority, the Commission is therefore empowered with investigative powers amongst others to summon witnesses; require delivery of documents and conduct dawn raids.
The penalties for companies that breach the competition rules can be very severe. For cartel infringements, the highest penalty is a 5 year imprisonment term for participating in a cartel or a fine not exceeding E250 000 or both. Cases may be referred to the Director of Public Prosecutions (DPP) for criminal prosecution.
However, companies that have participated in illegal cartels have a limited opportunity to avoid or reduce a fine. The Commission is in the process of developing an operative leniency policy and guideline whereby companies that provide information about a cartel in which they participated might receive full or partial immunity from fines. .