Administrative Penalties as they Relate to Consumer Redress

Abstract

Although consumer welfare is one of the main objectives of the South African Competition Act, the current administrative penalties for which it provides do not deal with consumer redress. Consumers who are disadvantaged by the anti-competitive conduct of firms receive no compensation or other assistance. The administrative penalties paid by firms that contravene the Act do not aid consumers; in fact, firms often increase the price of their goods or services to finance these penalties. So the Act does not meet its objective as it does not provide adequately for consumer redress. I suggest that the Act be revised to clarify the powers of the competition authorities and to enable them to impose penalties that will directly benefit affected consumers. I also suggest that the Act provide for private means of redress through the implementation of class actions specifically relating to anti-competitive conduct.