OPINION | Bid-rigging and price-fixing: When has a company left a cartel? | Fin24

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The Competition Appeal Court has shed light on a key part of understanding cartel conduct - when exactly a company has left a cartel. Nyiko Mathebula and Ahmore Burger-Smidt of Werksmans Attorneys explain. | Fin24

Outgoing Competition Comissioner Tembinkosi Bonakele said last month that a source of pride was the body's crackdown on anti-competitive behaviour. And as an investigation continues into alleged life insurance sector collusion and possible price-fixing among several prominent companies, the question arises not only of when a company is engaging in cartel conduct, but if and when they have left a cartel.

• Complementary bidding, where competitors agree to have one of them submit the lowest bid or only bid containing acceptable terms; This, together with price fixing and market allocation, falls within a class of conduct referred to as"cartel activity". The Tribunal found that Cross Fire had engaged in bid rigging and an administrative penalty of approximately R12.8 million was imposed on it. Cross Fire then appealed this decision to the CAC. The main dispute before the CAC was whether, for a number of years, Cross Fire had been party to the bid rigging cartel.

The CAC found that Cross Fire, through its conduct of not participating in further collusive tenders, exited the bid-rigging cartel. It further found that such an exit had occurred more than three years prior to the Commission referring its complaint to the Tribunal.The Constitutional Court in Pickfords held that section 67 of the Competition Act was a time-bar provision and that in terms of section 58 the Tribunal could condone non-compliance with the time limit.

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