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Characteristics of Prosecuted Cartels and Cartel Enforcement in South Africa

Author

Listed:
  • Wawa W. Nkosi

    (Stellenbosch University)

  • Willem H. Boshoff

    (Stellenbosch University)

Abstract

This paper provides a comprehensive and detailed quantitative characterisation of 118 detected cartels and the underlying enforcement process in South Africa for the period 1998 to 2019. The paper also employs survival analysis to investigate the effect of different cartel and enforcement characteristics on the probability of cartel breakdown. The analysis reveals that South African cartels are mostly similar to international cartels, with an average duration of 6.2 years, which is comparable to European and American cartels; however, South African cartels are on average smaller: They involve fewer participants. Furthermore, the data support a hypothesis of increased activity in the anti-cartel sphere over the sample period. We find that the corporate leniency policy has contributed to the prosecution of about 30% of the cartels that were prosecuted in our sample, while penalties are on average below 5% of total revenue—which is below the statutory limit of 10%. Moreover, the survival analysis suggests that the corporate leniency policy may have shortened the expected duration of detected cartels—at least when we consider cartels that came into existence after the introduction of the policy.

Suggested Citation

  • Wawa W. Nkosi & Willem H. Boshoff, 2022. "Characteristics of Prosecuted Cartels and Cartel Enforcement in South Africa," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(3), pages 327-360, May.
    • Handle: RePEc:kap:revind:v:60:y:2022:i:3:d:10.1007_s11151-022-09862-1
    DOI: 10.1007/s11151-022-09862-1
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    References listed on IDEAS

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