INVESTIGATIONS for cartel conduct have been intensified from market surveys to confiscating suspected computers, the Competition and Consumer Protection Commission (CCPC) chief investigator (cartels and restrictive business practices RBPs), Naomi Fulaza has said.
A business cartel is an illegal, secret association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.
A cartel can also be defined as an agreement between competing firms to control prices or exclude entry of a new competitor in the market.
It is a formal organisation of sellers or buyers that agree to fix selling prices, purchase prices, or reduce production using a variety of tactics.
Ms Fulaza said at a media training workshop organised by the CCPC and the World Bank that the commission was also checking emails for suspected companies engaged in a business cartel in a bid to find information circulated among members.
“Cartels are prohibited according to the CCPC Act because they restrict competition and consumers suffer in the end. Cartels control prices on the market and agree to settle for those that benefits them instead of consumers,” she said.
She also said the commission had two penalties for would-be offenders engaged in the cartel which were criminal and administrative.
“We have two penalties for cartels under our Act and the first one is the criminal sanctions where the State prosecutes offenders, and then we also have administrative penalties where we fine offenders 10 percent of the annual turnover,” she said.
Ms Fulaza said those penalties only effected after offenders were convicted.
Meanwhile, Ms Fulaza said CCPC had a leniency programme which covered 100 and 50 percent deduction of fines for companies engaged in cartels which provided evidence to the commission.
“There is also the leniency programme; with this programme companies that have engaged in a cartel conduct come to the commission and gives information and evidence on any of the activities that took place.
“This programme is where the ‘first through the door’ actually have leniency for 100 percent and the second one gets 50 percent leniency meaning you get 50 percent deduction of the fine,” she said.
She explained that the third company to produce evidence to the commission did not qualify for the leniency programme.
“Then there are others who come afterward, those will not get any leniency from the commission. This programme begun last year and we have so far not had any companies that have come through for this programme,” she said.
She said CCPC was currently carrying out an investigation for millers suspected to be in a cartel.
“We have handled many cases at CCPC, we are almost done with the investigation for stockbrokers, and we have also done for frozen fish. We are currently carrying out an investigation for millers,” she said.