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Report 76 Business Practices Committee

2. The Business Practices Committee



The Committee, a statutory committee within the Department of Trade and Industry, administers the Harmful Business Practices Act, 71 of 1988 (the Act). This is an enabling act. The Act makes provision for the prohibition or control of harmful business practices, and for connected matters. A "harmful business practice" means 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 Chairman of the Committee reports to the Minister of Trade and Industry (the Minister).


In terms of the Act the Committee may conduct two types of formal investigations. First, in terms of section 8 of the Act, the Committee may on its own initiative, and shall on the directions of the Minister, undertake such investigation as it may consider necessary into any harmful business practice of particular individuals or persons that the Committee believes exists or may come into existence. Secondly, the Committee may investigate any business practice being applied by persons in general for the purposes of creating or maintaining a harmful business practice. The first type of investigation is a section 8(l)(a) investigation in terms of the Act and the second a section 8(1)(b) investigation. These types of investigations are known as formal investigations.


The Committee can also undertake preliminary investigations in terms of section 4(1)(c) of the Act into the business practice of an entity. A section 4(1)(c) investigation enables the Committee to undertake such preliminary investigation as it may consider necessary into, or confer with any interested party in connection with, 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 make a more informed decision as to whether a section 8(1)(a) investigation should be undertaken. The Minister is not empowered to make any decisions on the strength of a section 4(1)(c) investigation, but he may do so in terms of a section 8 investigation.


The Committee reports to the Minister on the result of any investigation undertaken by it in terms of section 8. If the Committee, after an investigation, believes a harmful business practice exists, or may come into existence and is not satisfied that the harmful business practice is justified in the public interest, the Committee in its report recommends to the Minister the action that should be taken to ensure the discontinuance of the harmful business practice. The powers of the Minister are set out in section 12 of the Act. The orders of the Minister are published in the Government Gazette and a contravention of the Minister's order constitutes a serious criminal offence.