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PREFACE Finally in the United Republic of Tanzania, whether or not a procedure into an alleged prohibited practice has started, the complainant may apply to the Authority for an interim order in order to stop the allegedly anticompetitive practice. The Authority, after having given the respondent a reasonable opportunity to be heard, may grant an order (usually a cease and desist order) according to the collected evidence relating to the alleged prohibited practice and considering the need to prevent serious or irreparable damage to the applicant. These orders are rightly appealable and are followed by a full investigation by the Authority. These interim powers are particularly important when the alleged anticompetitive practice originates in interrupting unilaterally a commercial practice that had existed in the past, for example refusing access to a port or to an essential infrastructure after such access had been made available for some time in the past. In such circumstances, if there is some evidence that there are no objective reasons for the refusal, granting an interim order may be necessary in order to keep the refused competitor in business until a full investigation is completed. It is particularly important that such powers are vested also in the competition authority and not only with judge, as is the case in all three jurisdictions. Deciding on antitrust issues requires a certain amount of expertise; the more so on interim issues that are decided short of a full investigation. The Authority has all the necessary skills, much more than a non specialized judge. Furthermore, since the objective of antitrust enforcement is the protection of the competitive process, not the power to issue interim orders only to the judge may lead to an over application of the law, being the judge probably more sensitive to the reasons The enforcement powers of an antitrust authority should not be exclusive. Antitrust prohibitions are rules like all the others and administrative authorities are created in order to make enforcement easier, overcoming all sort barriers that otherwise gather the necessary evidence, free riding issues associated with the fact that anticompetitive practices may damage many people while the damage action may be initiated by only some of the 11 damaged parties, etc.). In other words, without the Authority the disciplining effect of the law would be much reduced, not eliminated. This implies that the possibility of privately enforcing the antitrust rules should not be ruled out, since with the possibility of damage actions the deterrent role of 3 . This does not mean that private enforcement would in any case ways been directly enforceable, the number of private litigations has been extremely small. However, especially for interim measures, any persons damaged by an anticompetitive action should also be allowed to take the case in front of a judge. Very often the violation of competition law is not stand alone and the judge would be better positioned to assess all the law violations (not just antitrust) in a given case. 3. Sanctions Sanctions are necessary to make sure that legal provisions are respected. All three authorities have powers to impose procedural sanctions. In the United Republic of Tanzania and Zambia the Authorities can also impose sanctions for violations of antitrust provisions: as noted in Zimbabwe the Law does not foresee any sanctions on anticompetitive business agreements, aside from declaring them null and void. Sanctions have to be credible in order for them to serve any deterrent function. The risk that criminal sanctions would remain just a hope rather than a reality leads many jurisdictions to remain with pe- information or for providing false information is in the United Republic of Tanzania quite low, while in Zambia and Zimbabwe very high (imprisonment on anyone who obstructs or delays the Authority’s investigation or gives false or misleading information). It is clear that imprisonment is an excessive sanction for it to function as an effective deterrence, since in order for it to be enforced it would just simply misleading the Authority or delaying the answer. As a result, even if the sanction is serious, compliance may not be achieved because the sanction is too high and a judge would hardly be convinced to put someone in jail for seriously mis- COMPARATIVE ASSESMENT
12 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE be enforced. Its existence may nonetheless have a negative effect on investment, scaring foreign investors and keeping them out of the country. Even much more effective. The law in the three jurisdictions should allow for competition Authority or for not providing all the information available. For example in the Euro- Commission an incorrect, incomplete or misleading information may go up to 1 per cent of the total turnover in the preceding business year. should be pecuniary or criminal, it has to be acknowledged that many jurisdictions around the participated in a cartel, the most serious antitrust violation. While there are good reasons to introduce criminal sanctions for cartels, there are also good reasons for not to do so. The good reason is that very often it is the individual employee that sets up a cartel, while the company board is unaware of it (for example when cartels are set up at the local level by local managers of competing companies). If this is the case criminal sanctions just punish the individual responsible for the crime, not the unaware corporation and the even more unaware shareholder. A second good reason is that criminal sanctions deter individuals that otherwise be levied against the corporation. A third good reason is that the deterrent level of a pecuniary would ever decide it. The negative reason is that the burden of proof for criminal sanction is much of proof being beyond any reasonable doubt versus the balance of probability), so that the actual level of deterrence may not be as high as originally thought. Furthermore, in many jurisdictions white collar crimes are not considered very serious and judges tend to give lenient punishments for such offenses, further weakening the deterrent function of imprisonment. Finally, since the individual is responsible for the violation, corporations may respond by not caring whether their employees participate in a cartel, since they would not be liable as a corporation. With criminal sanction, it may well be that the legal provision against cartels are less, not more respected. bwe that are particularly troublesome are the fact that many petty violations are subject to criminal for the possibility of imprisonment of the manager ity, including not notifying a merger. Similarly in Zambia imprisonment can be imposed to anyone who delays or obstructs the Authority’s investigation or gives the Commission false or misleading information. This extension of the criminal nature of sanctions is clearly not advisable because judges are not likely to condemn anybody to serve a prison term for not being cooperative enough in the course of the investigations. As a result the threat of imprisonment may not be taken seriously and, to the contrary may lead to regulatory capture (between the companies and competition authority). As a result the threat of imprisonment may deter foreign direct investment, hardly a ben- Among the three countries only the United Republic of Tanzania does not have criminal sanctions. It is suggested that also Zambia and Zimbabwe im- oblige imposing of criminal sanctions. In the case of lack of cooperation with the Authority, a proper easier to administer and to decide. As for pecuniary sanctions for the punishment of the violations of the substantive parts of the law, the offending enterprise annual turnover, is in line with international best practices. On the other fact that antitrust violations are not subject to any thority itself but by a different body that does not have a precise representation of the seriousness of antitrust offenses. The best solution in Zambia and in Zimbabwe would be to change the law, eliminating the possibility of imprisonment for petty violations. In alternative the Authority could well issue a statement on when criminal sanction will be used, strictly limiting the possibility of impris-
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ZIMBABWE FULL REPORT ZIMBABWE
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ZIMBABWE TABLE OF CONTENTS PREFACE
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ZIMBABWE This report is part of the
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ZIMBABWE With the growing political
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ZIMBABWE of restrictive practices,
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ZIMBABWE competition authorities do
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ZIMBABWE divided according to geogr
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ZIMBABWE The Commission in 2006 whi
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ZIMBABWE to take care of themselves
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ZIMBABWE (under Section 9); basical
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ZIMBABWE Full scale investigation i
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ZIMBABWE (ii) to produce any book,
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ZIMBABWE The fact that CTC has a co
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ZIMBABWE tariat of technocrats, who
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ZIMBABWE Table 2: Number of Competi
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ZIMBABWE Regarding the handling of
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ZIMBABWE (Emphasis by the author) b
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ZIMBABWE Section 5 (1) (f) that pro
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ZIMBABWE Whilst the arguments can b
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ZIMBABWE Anti competitive agreement
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ZIMBABWE by conducting its case det
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