SMALL BUSINESSES: BLOCK EXEMPTION FROM COMPETITION ACT’s HORIZONTAL, VERTICAL PRACTICE PROHIBITIONS

SMALL BUSINESSES: BLOCK EXEMPTION FROM COMPETITION ACT’s HORIZONTAL, VERTICAL PRACTICE PROHIBITIONS

• 03 June 2024
• Trade, Industry & Competition
• SA Legal Academy

The Department of Trade, Industry & Competition has gazetted regulations under the Competition Act, 1998, exempting certain categories of agreements or practices between small and medium businesses from provisions in the Act’s sub-sections 4(1) and 5(1). These sub-sections respectively prohibit horizontal and vertical practices found to have restricted competition.

Immediately in force, the regulations apply to:

• research and development agreements entailing outsourcing to and/or cooperation with third parties
• production agreements that ‘do not result in the removal of a competitor from the market’
• joint purchasing agreements that include ‘collective purchasing by a subset of firms in a market’
• the joint selling of goods or services ‘to and through intermediaries or other business customers by a subset of firms in a market’
• commercialisation agreements that include ‘co-operation between firms relating to the selling, distribution or promotion of their products’
• standardisation agreements entailing setting the technical or quality requirements with which current or future products, production processes, services or methods should comply, and
• collective negotiations with large buyers or suppliers on the terms and conditions for purchasing or supply.

Among other things, the regulations also prescribe the exemption application procedures to be followed, as well as related approval and revocation processes.

They will be in force for at least 10 years.

• regulations

Published by SA Legal Academy Policy Watch

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