Exemptions

In terms of Section 10 of the Competition Act, 1998 (Act No.89 of 1998), an exemption may be granted if an agreement or practice constitutes a prohibited practice in terms of Chapter 2 of the Act and is found to contribute to the following objectives: Maintenance or promotion of exports; Promotion of the competitiveness of small businesses or firms controlled or owned by historically disadvantaged persons Changing the productive capacity to stop decline in an industry Maintaining economic stability in an industry designated by the Minister. Therefore, if a firm or group of firms contravene any provisions of Chapter 2 of the Act and can show that they contribute to one of the objectives outlined above, the firm or group of firms may apply for an exemption. In addition, exemptions may be granted for an agreement or practice that relates to the exercise of a right, which falls within the ambit of specific laws, enumerated in Section 10 (4) of the Act. Furthermore, professional associations may apply to have all or part of their rules exempted from Part A of Chapter 2 of the Act (relating to restrictive practices). Exemptions may be granted if the rules are not found to be anti-competitive in nature, or, if they are anti-competitive, can be justified as being reasonably required to maintain professional standards or the ordinary function of the profession. Professional associations, which may apply for an exemption have been designated in Schedule 1 of the Competition Act, 1998 (Act No.89 of 1998).

Who qualifies for an exemption?

An Exemption is a written permission by the Competition Commission to engage in a prohibited practice, should the application meet the criteria set out in the Act.

An Exemption may be granted if an agreement or practice constitutes a prohibited practice, in terms of Chapter 2 of the Act, but is found to contribute to:

  • Maintenance or promotion of exports;
  • Promotion of the competitiveness of small businesses or firms controlled or owned by historically disadvantaged persons;
  • Changing the productive capacity to stop decline in an industry;
  • Maintaining economic stability in an industry designated by the Minister.

Therefore, if a firm or group of firms contravenes any provisions of Chapter 2 of the Act and can show that they contribute to one of the objectives outlined above, the firm or group of firms may apply for an Exemption. In addition, Exemptions may be granted for an agreement or practice that relates to the exercise of a right acquired or protected in terms of specific legislation, such as intellectual property legislation, as stipulated in Section 10 (4) of the Act. Finally, Professional Associations may apply to have all or part of their rules exempted from Part A of Chapter 2 of the Act (relating to restrictive practices).

Exemptions may be granted if the rules are not found to be anti-competitive in nature, or, if the rules are anti-competitive, they can be justified as being reasonably required to maintain professional standards or the ordinary function of the profession.

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