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Competition Act, 1998 (Act No. 89 of 1998)

Notices

Guidelines for the Determination of Administrative Penalties for Prohibited Practices

7. Ability to pay the administrative penalty

 

7.1 The Commission may, after determining an appropriate administrative penalty and in exceptional circumstances, consider the firm's ability to pay the administrative penalty. This will be the exception and there must be no expectation that the administrative penalty will be adjusted on this basis. In these circumstances, the Commission will be mindful of the firm's financial position and market circumstances in order to avoid imposing substantial hardship on a particular firm that may lead to a significant reduction in competition. This does not negate the need for consideration of the principle of proportionality and fairness.

 

7.2 To be considered for this, the firm must provide the Commission with objective evidence12 that the imposition of the administrative penalty as provided for in these guidelines would irretrievably jeopardise the ability of the firm concerned to continue trading and exit. This evidence may include, but will not be limited to, audited financial statements attesting the veracity of the firm's financial position. The Commission will consider the financial viability of the firm as a whole and not of any specific division(s).

 

7.3 The mere existence of a loss making financial situation will not suffice for purposes of obtaining special discounts under this consideration.

 

7.4 If a firm is able to demonstrate its inability to pay the administrative penalty in accordance with paragraphs 7.1 and 7.2 above, the Commission may consider the use of favourable payment terms. The Commission will only consider a discount on this basis if a firm can objectively demonstrate that, even in the long term, it will still not be in a position to pay the administrative penalty.

 

 

12 For example information relating to business rescue proceedings, insolvency proceedings etcetera