The Competition Commission is soon expected to release a draft report from its public passenger transport inquiry, the last of four separate market inquiries it will have concluded over the past year . Once the transport inquiry is finalised, the commission will have cleared its slate of all pending market inquiries initiated under the Competition Act before its amendment past year.
However, a full trial before the tribunal would still be required to determine whether this is in fact the case, and only then will the relevant firm be obliged to change its behaviour. The commission could not compel a firm to alter its conduct without such a finding, nor could it implement sector-wide remedies with which all firms must comply.
In many cases, given the ambiguous economic effect of firms’ conduct, there is a high standard of proof on the prosecuting authority to demonstrate that conduct has in fact resulted in effects that are deleterious to competition and ultimately bad for consumers. This rigour is necessary to ensure firms are held liable only for truly anticompetitive conduct.
Ex-ante interventions therefore proactively anticipate undesirable market outcomes and require that firms behave in accordance with a certain set of rules to avoid or at least mitigate those outcomes. This has traditionally been the realm of sector-specific regulators — such as the Independent Communications Authority of SA in the telecom sector — which look to tools such as licensing regimes and sometimes direct pricing regulation to achieve these outcomes.
It is against this background that the commission has been granted greater powers to impose sector-wide remedies in the context of market inquiries. Apart from orders to break up firms , the commission can now impose wide-ranging requirements on firms within a particular market or sector. Firms will be bound to comply, unless they successfully appeal against these findings.