The Competition Commission (Commission) has withdrawn the complaint referral in the so-called milk case, against the remaining respondents being Clover, Parmalat, Nestle and Ladismith Cheese. The withdrawal follows the judgment of the SCA in the milk case during September 2010 that the Commission exercised its duties under the Competition Act unlawfully as regards its powers of inspection and interrogation.
Petra Krusche, director in the Competition and Regulatory Practice at Cliffe Dekker Hofmeyr noted that it had taken the Commission about six months to reach this decision, after specific calls for withdrawal and applications to seek a dismissal of the complaint referral by the respondents.
The SCA’s decision was premised on the correct process under the Competition Act, namely that a valid complaint referral must be preceded by a valid complaint investigation. The Commission had initiated a complaint into the milk industry, a matter beyond its jurisdiction under the Competition Act. This initial unlawfulness invalidated all subsequent actions undertaken by the Commission, notably the complaint referral against the milk processors, now withdrawn.
Jurisdictional considerations of a similar kind have recently led to the collapse of other complaint referral proceedings such as the case against Omnia & Yara in the fertilizer collusion case, and the abuse case against SAB.
Said Krusche, “All of these matters (the milk case, as well as the SAB and fertilizer cases) were initiated several years ago, when the Commission’s focus had just shifted to prosecuting prohibited practices and well before this part of the application of the Act had been tested.
“It would be surprising if future complaint investigations and subsequent referrals by the Commission will exhibit similar jurisdictional flaws as it is not unduly burdensome to ensure that proper process under the Competition Act is followed.”
She added that it was essential for the rule of law that bodies that have a mandate and duty to promote public interest and welfare, nevertheless act within the statutory and constitutional framework.
Cliffe Dekker Hofmeyr acted for Parmalat and Ladismith
