The Business Practices Committee (the Committee) was established in terms of section 2 of the Harmful Business Practices Act, 1988 (Act No. 71 of 1988) ("the Act"). The purpose of the Act is to provide for the prohibition or control of harmful business practices. A "harmful business practice" is any business practice which, directly or indirectly, has or is likely to have the effect of harming the relations between businesses and consumers, unreasonably prejudicing any consumer or deceiving any consumer.

The Committee has wide investigative powers. It could undertake a preliminary investigation in terms of section 4 (1) (c) of the Act into the business practice as applied by any entity. A section 4 (1) (c) investigation enables the Committee to make such preliminary investigation as it may consider necessary into, or confer with any interested party concerning, any harmful business practice which allegedly exists or may come into existence. Notice of section 4 (1) (c) investigations are not published in the Government Gazette as opposed to section 8 (1) (a) investigations. The purpose of section 4 (1) (c) investigations is to enable the Committee to decide whether a section 8 (1) (a) investigation is called for. The Minister of Trade and Industry is not empowered to make any decisions to prohibit a practice on the strength of a section 4 (1) (c) investigation. He may do so in terms of a section 8 investigation.