Tag: CAC

Cartel, Courts, and Currency: Inside South Africa’s Longest-Running Bank Collusion Case

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By Matthew Freer, Astra Christodoulou and Natasha Reib

Background

After a decade-long battle over allegations made by the Competition Commission, alleging that up to 18 local and foreign banks had participated in a Single Overarching Conspiracy (“SOC”), the Constitutional Court of South Africa delivered its judgment on the multi-application dispute on 30 June 2026 in BNP Paribas v Competition Commission of South Africa; Credit Suisse Securities (USA) LLC v Competition Commission of South Africa; Competition Commission of South Africa v Bank of America Europe Designated Activity Company and Others [2026] ZACC 28.

The matter arises from the Competition Commission’s complaint that a number of South African and international banks contravened section 4(1)(b) of the Competition Act, which prohibits restrictive horizontal practices. The section provides that such an agreement or concerted practice is prohibited if:

“(b) it involves any of the following restrictive horizontal practices:

(i) directly or indirectly fixing a purchase or selling price or any other trading conditions;

(ii) dividing markets by allocating customers, suppliers, territories, or specific types of goods or services; or

(iii) collusive tendering.”

The Commission alleged that up to 18 local South African banks and foreign banks, which were identified in the February 2017 referral, colluded to manipulate the United States Dollar/South African Rand (USD/ZAR) exchange rate between 2007 and 2013.

Leniency and settlements

Leniency was granted to three respondents, Absa Bank Limited and the two Barclays entities, on the basis of cooperation with the Commission in prosecuting the complaint. A fourth respondent, Citibank NA, reached a settlement with the Commission. This left 14 of the original 18 remaining respondents as active parties in the referral proceedings.

The Joinder Battles: Adding Banks After Referral

In January 2018, the Commission served an application to join another 5 respondents to the matter. An exception was filed arguing that the Commission could not add more respondents to the matter after the referral had been made. The Constitutional Court held that neither the Competition Act nor the Tribunal Rules impose an absolute prohibition on post-referral joinder. Furthermore, it was confirmed that there is no need for the Competition Commission to initiate an entirely new complaint every time a new respondent is identified post-referral.  A second joinder application followed in September 2020, adding a further five respondents, including Standard Americas Incorporated (“SAI”), which brought the total number of respondent banks to 28.

Pleading a Single Overarching Conspiracy

The respondents filed further exceptions to challenge the referral made in February 2017. They argued that the Commission had not pleaded its case properly; that the Tribunal lacked personal jurisdiction over foreign banks, and that the alleged collusion was not adequately explained. The Constitutional Court had to consider the exceptions raised but mainly focused on the issues regarding pleading, jurisdiction, and the addition of respondents post-referral rather than the allegations of collusion.

As to whether the Commission pleaded its case properly, the Constitutional Court clarified the legal principles governing an SOC and explained that the Commission must plead enough material facts, and not just vague allegations, to make out a prima facie case that each respondent intentionally participated in the collusion.  The order handed down in the earlier Competition Appeal Court judgment illustrates just how granular this pleading standard is. The Commission was required to “provide the facts that are relied on to prove that the particular respondent joined or had joined the SOC” (paragraph 19).

The Court clarified the standard applicable to exceptions of this kind. The question is whether, assuming all the facts pleaded by the Commission to be true, the Tribunal could reasonably conclude that the Commission has established a prima facie case for the relief it seeks. Respondents are generally confined to the Commission’s pleaded case when raising an exception, save where fairness justifies a limited departure.

Jurisdiction Over Foreign Banks: Section 3(1) and the Doctrine of Res Judicata

In terms of the exception regarding the Tribunal’s jurisdiction over foreign banks, section 3(1) of the Competition Act is relevant.  The section provides that “this Act applies to all economic activity within, or having an effect within, the Republic.” The Commission’s own position was that section 3(1) displaced the common law requirements of personal and subject matter jurisdiction entirely, so that any effect within South Africa sufficed to found the Tribunal’s jurisdiction, even over banks with no presence here. That argument was rejected by both the Tribunal and, on appeal, the Competition Appeal Court, which held that personal jurisdiction over foreign banks was still required, while developing the common law so that it could be established where there were “adequate connecting factors” between the Commission’s complaint and the Tribunal as a forum (paragraph 17), such as whether the alleged conspiracy connected pure foreign banks, local foreign banks, and South African banks in a single scheme targeting the rand.

The Commission argued before the Constitutional Court that this interpretation was wrong and should be revisited. But the Constitutional Court did not reconsider the interpretation of the section, as the Competition Appeal Court’s earlier judgment on the point had never been appealed. This attracted the doctrines of res judicata, since the matter had already been finally decided, and peremption, since the Commission’s conduct in pleading its later case on the basis of that judgment showed it had accepted it, both of which prevented the Commission from reopening the issue in these proceedings. As the Court put it, quoting its earlier judgment in Zuma v Secretary of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector Including Organs of State [2021] ZACC 28; 2021 (11) BCLR 1263 (CC):

“the principles of legal certainty and finality of judgments are the oxygen without which the rule of law languishes, suffocates and perishes” (paragraph 99).

The previous interpretation of the section accordingly remains binding for purposes of this matter.

The outcome

As to outcome, the Constitutional Court refused BNP Paribas leave to appeal, with costs, so the Competition Appeal Court’s decision against it stands. Credit Suisse Securities (USA) LLC succeeded, its appeal was upheld, and the Commission’s application to join it was dismissed, so it is no longer a respondent. The Commission’s own appeal succeeded only against JPM Bank and SAI, whose cases were reinstated before the Tribunal. The Commission’s appeal failed against all the other banks named above, and HBEU’s cross-appeal was also dismissed.

What this means going forward

Although this judgment did not determine whether the banks participated in the alleged SOC, it is likely to set a new precedent in competition law procedure in South Africa. This is because it establishes guidance on how future multi-application disputes regarding a SOC should be investigated, pleaded, and litigated. The case discusses how exceptions should be decided, the legal requirements for a SOC pleading, the jurisdiction over foreign firms involved in anti-competitive conduct affecting South Africa, and the addition of respondents post-referral.

Tourvest wins on appeal in precedent-setting cartel case: you don’t become a ‘competitor’ solely by virtue of contracting

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CAC ruled in favour of Tourvest nine years after allegedly collusive tender for retail space at Johannesburg airport took place

By Jemma Muller and Nicola Taljaard

In a recent judgment, the South African Competition Appeal Court (“CAC”) provided clarity on the characterization inquiry necessitated by section 4(1)(b) of the Competition Act 89 of 1998. The judgment particularly elucidated the way in which the requirement that the parties must be in an actual or potential horizontal relationship at the time that the offence in issue is committed, must be construed.

The CAC set aside and replaced the Competition Tribunal’s (“Tribunal”) decision wherein it found that Tourvest Holdings (Pty) Ltd (“Tourvest”) was guilty of collusive tendering or price fixing under section 4(1)(b) in relation to tenders issued by Airports Company South Africa (“ACSA”).

The CAC found that Tourvest and the Siyanisiza Trust (“Trust”) agreed to cooperate instead of competing on a tender issued by ACSA by concluding a Memorandum of Understanding (“MoU”) before submitting their separate bids in relation to tenders issued by ACSA. In terms of the MoU, Tourvest agreed to provide the Trust with the expertise, management infrastructure, technology and training that the Trust would require to bid.

Despite the historically vertical relationship between the parties, the Tribunal found that the parties had become actual competitors by submitting separate bids for the same tender (i.e., horizontality by bidding) and potential competitors under the MoU, and alternatively, that the parties became potential competitors by virtue of holding themselves out as competitors submitting bids against one another (i.e., by creating the illusion of competition).

Before scrutinizing the Tribunal’s specific findings in relation to horizontality, the CAC found that the Tribunal misdirected itself by embarking on a characterization inquiry which failed to recognize the character of the parties’ relationship absent the impugned agreement – which relationship was clearly vertical in nature. The CAC explained that, if absent the agreement the parties were not potential competitors, then the agreement could not have removed a potential competitor from the market and could also not have harmed competition, as there was none to start with. The CAC based its reasoning on the purpose of section 4(1)(b) of the Competition Act, which stated as being to penalize ‘conduct which is so egregious that no traditional defence is permitted’. Accordingly, its purpose is not to capture conduct which, correctly characterized, does not harm competition.

With regard to the Tribunal’s specific findings of horizontality, the CAC found that:

  • The submission of separate bids for the same tender could not in and of itself bring the impugned conduct within the ambit of section 4(1)(b);
  • The wording of section 4(1)(b) is clear in that it requires the parties to be in an actual or potential horizontal relationship. Section 4(1)(b) cannot be interpreted to infer strict liability on parties by virtue of them ‘pretending’ to be a competitor (i.e., horizontality by illusion). If parties are ‘ineligible’ to bid as competitors by virtue of their trading environment, they may not be construed as potential competitors. In casu, the Trust was not eligible to participate in the tender as it did not meet the tender criteria; and
  • It is illogical and contrary to the provisions of section 4(1)(b) to conclude that the parties could become competitors in the future by virtue of the tender’s enterprise development purpose. The potential to compete cannot be rationalized from the impugned agreement itself. Rather, it is the (horizontal-or-not) nature of the parties’ relationship at the time the offence in issue is committed, which must be assessed.

Competition Appeal Court’s Ruling in Standard Bank Case: A Changing of the Tides?

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Threat of Referral no Longer an Arrow in the Commission’s Quiver?

By AAT Senior Contributor Michael-James Currie

In the first week of June 2018, the South African Competition Appeal Court (CAC) upheld Standard Bank’s appeal and ordered that the Competition Commission (Commission) make available its investigation record to Standard Bank. Standard Bank is a respondent in the Commission’s ForEx investigation.

Standard Bank had requested that the Commission make available its record in terms of Rule 15 of the Competition Commission Rules. Rule 15 permits any member of the public to request access to the Commission’s non-confidential record. Standard Bank therefore brought its application in terms of Rule 15 not on the basis of it being a respondent to the Commission’s investigation but as an ordinary member of the public.

Although the CAC had in an earlier case, Group 5, set out the correct interpretation and application of Rule 15 and stated that:

  1. the Commission is obliged in terms of Rule 15 to make available its record of investigation;
  2. that the Commission must do so within a “reasonable time”; and
  3. that the Commission must disregard the applicants status as a litigant when determining what a reasonable time is.

The Tribunal in the Standard Bank case, however, deviated from the CAC’s binding decision in Group 5 and held that the Commission would only need to make its record available to Standard Bank at the time of discovery.

Accordingly, the CAC in the Standard Bank case found that the Tribunal took Standard Bank’s status as a litigant into account when assessing what a reasonable time would be by which the Commission was obliged to make available its record to Standard Bank. The CAC in Standard Bank confirmed that although the Tribunal is not bound by the stare decisis principle in relation to its own decisions, the Tribunal is bound by the CAC’s decisions. The Tribunal’s decision in Standard Bank was inconsistent with the CAC’s earlier decision in the Group 5 case – where the CAC expressly stated that there is no rational basis for linking the production of the Commission’s record with discovery proceedings. The Tribunal’s departure from the CAC’s earlier precedent was noted with concern by the CAC in Standard Bank.

The Commission argued – as justification for not producing its record – that Standard Bank was abusing its position as a litigant. In this regard, the CAC expressly rejected this argument and held that simply because a plaintiff would be better placed to plead its case after receiving the Commission’s record that, in of itself, does not amount to an abuse of process. The CAC held that it would only amount to an abuse of process if an applicant sought to rely on Rule 15 in order to avoid or delay having to plead within the prescribed time periods.

Furthermore, the CAC reaffirmed that a member of the public’s right to access the Commission’s record should not be prejudiced by the fact that such a member is also a litigant.

The Court’s Standard Bank decision is important as respondents will invariably be inclined to seek access to the Commission’s record prior to pleading their case. This may have a material impact on the Commission’s settlement strategy as respondents in settlement negotiations with the Commission are likely to request the Commission’s record in order to assess the strength of the Commission’s case against it before deciding whether to settle the case or not – thereby compelling the Commission to ensure that a robust investigation is conducted prior to entering into settlement negotiations with respondents.

Says John Oxenham, ‘the “threat of a referral” is unlikely to present the Commission with the same negotiating leverage as it may otherwise have enjoyed when respondents were kept in the dark as to the evidence which the Commission may have against them.’

Whether this all plays out in practice remains to be seen although any decision which promotes transparency and legal certainty can only be positive. It is for this reason that the CAC’s express criticism of the Tribunal’s decision to depart from established case precedent is particularly noteworthy as it is a stark reminder to all adjudicative bodies of the importance of adhering to the rule of law.

South Africa: Competition Appeal Court Sends Strong “Passive Participation” Message

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Competitors Beware of Industry Gatherings

By Charl van der Merwe

On 19 December 2016, the South African Competition Appeal Court (CAC) handed down judgment in the Omnico (Pty) Ltd; Cool Heat Agencies (Pty) Ltd vs The Competition Commission & Others matter.

The judgment details an application brought by two respondents who sought to challenge the Competition Tribunal’s finding that their participation at industry association meetings amounted to cartel conduct, despite the appellants’ contention that they did not actively participate in any anticompetitive discussions and were effectively passive participants at the meetings.

The CAC had to decide on whether or not silent participation by firms at an industry  meeting or forum of competitors where cartel activity was discussed amounts to a contravention in terms of section 4(1)(b)(i) of the Competition Act, Act 89 of 1998 (“the Act”).

south_africaSection 4 of the Act provides that “An agreement between, or concerted practice by, firms, or a decision by an association of firms, is prohibited if it is between parties in a horizontal relationship and if – (a) it has the effect of substantially preventing, or lessening, competition in a market, unless a party to the agreement, concerted practice, or decision can prove that any technological, efficiency or other pro-competitive gain resulting from it outweighs that effect”.

The Appellants are wholesalers that supply bicycle and bicycle accessories to the retail trade. The appellants attended a series of industry meetings together with various retailers and wholesalers of bicycles and bicycle accessories to discuss ways in which retailers could increase retail margins. This the CAC found was achieved by the wholesalers agreeing to increase the Recommended Retail Price, (“RRP”) for the various products sold.

In this particular case, the RRP increase was scheduled to take place on the 1st of October.

Though the appellants both increased their RRP on the effective date, the crux of the matter and the point the appellants placed great reliance on was the contention that they never actively participated in the industry meetings.

smoke_filled_room_smallThe CAC in dismissing the appeal held that it was clear that there was a cartel and that due to the complex and clandestine nature of cartel conduct, the Commission merely had to show sufficient evidence that in its entirety proves that the appellants were part of that cartel. The Commission was not required to scrutinise and evaluate each and every activity or discussion at the various meetings, and it was up to the appellants to put forward rebuttal evidence to establish that their participation at the meetings lacked any intention on their part to be a party to the collusive conduct.

Andreas Stargard, a competition lawyer with Primerio Ltd., notes that, “importantly, the CAC confirmed that the standard of proof in competition law cases is lower than that of contract and common law — a wink and a nod may in the smoke-filled-room, under the right circumstances, be sufficient proof to show collusion among competitors.  To prove a cartel, there is no need to apply the rigid principles of contract law, determining whether a meeting of the minds was reached, or to prove formal offer and acceptance in order to show that a collusive agreement was reached.”

Furthermore, he says,“the CAC found that the evidence put forward by the Commission need only be ‘sufficiently precise, consistent and convincing’ — not necessarily the ‘clear and convincing‘ evidentiary standard generally required in terms of common law.”

In addition, the CAC noted that there is no need for a single pressing piece of conduct to show that an anticompetitive arrangement has been entered into, but that the authorities will consider the cumulative effect of conduct whether active or passive in order to determine whether, on a holistic approach, the respondents had entered into a collusive agreement.

The CAC held that although the appellants did not express agreement at the meeting, the appellants did not ‘publicly’ distance themselves from the collusive proposals put forward at the meetings.

Accordingly, the CAC found that:

  • there was consensus reached at the meeting and the appellants failed to distance themselves from the discussions;
  • neither appellants gave any indication that they disagreed with the consensus reached at the meeting nor that they would not proceed along the lines as agreed during the meeting;
  • that at the very least (without even increasing their prices on the effective date) the appellants would have passively benefitted from the conduct resulting from that collusive arrangement; and
  • that neither of the appellants placed any evidence before the CAC to prove that they priced independently.

In conclusion, therefore, it is clear that firms who attend industry association meetings, forums or the like, are obliged to take active steps to denounce any anticompetitive discussions which may have taken place at such meetings.

Once a firm is party to any anticompetitive discussions, the onus rests on that firm to actively distance itself from such discussions – this is so irrespective of whether a collusive arrangement is implemented or not. It is not clear what steps need to be taken to satisfactorily distance oneself from such discussions, although it must be a ‘public’ denouncement. This could be interpreted as indicating that firms may be obliged to report to the authorities any collusive arrangements which they wish to actively distance themselves from.