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The Democratic Alliance (DA) welcomes the innovative approach taken by the Competition Commission in their investigation into the construction sector. We understand that the large number of cases of alleged collusion by the firms under investigation means that the customary fine structure would be unworkable in this case, so the Commission has recommend a new fast-track approach to incentivise compliance. This is the right approach to follow as it will likely speed up the conclusion of these cases, and eliminate lengthy and costly court procedures. 

The Competition Commission has two objectives: to prevent collusion from recurring; and to extract any ill-gotten gains from colluding firms and return it to the state coffers. Employing a fast-track approach should strengthen the Competition Commission’s efforts to achieve these objectives.

The DA has faith that the Commission will recommend appropriate penalties based on these two objectives. Appropriate penalties will avoid the risks of moral hazard and will help to ensure that similar incidents do not recur, whilst also ensuring the continued viability of the corporate entities involved. The construction sector is of crucial importance to the continued development of infrastructure, and is also an important source of employment for many of our people. The Commission’s approach is therefore appropriate for an industry of this nature. 

The DA also welcomes the Competition Commission’s increased activism in recent years, which has contributed to a more robust, competitive economic environment. Last year the Competition Tribunal levied fines totalling almost R500m, compared to R300m in 2009 and R100m the year before. The DA supports the promotion of competition in our economy, as it lowers prices for consumers and ensures that public funds are not wasted.