Monopolies and the Role of the Competition Board
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board
E E BEKKER*
1 Introduction
The advantages and disadvantages of monopolies have been debated through
the ages and have evoked different reactions at different times. Economic
strength, even more so than political strength, is a source of power and this
power has clouded the issue time and again. At certain times governments and
monarchs have granted exclusive trading rights and privileges relating to
specific commodities, and at other times statutes have declared such grants
unlawful.
Of special interest to South Africa are the monopolies granted by the Dutch
to the East India Company in 1602 for trade between the Cape of Good Hope
and the Magellan Straits. Twenty-one years later similar grants were declared
unlawful in England by the Statute of Monopolies.1
South Africa has also known monopolies since its early days and, as a result,
a few families have amassed fortunes of considerable proportions. Many of the
roots of monopolies can be traced back to state intervention in the economy.
A considerable number of the South African conglomerates came into being
either as a creature of statute or through the granting of concessions.
Especially in the last few decades, notwithstanding the fact that many mines
and other industries were controlled by a few major conglomerates, the
preservation of the free market system has been seen by the government as the
cornerstone of the country's economic life. The government's policy has been
to promote competition and monitor any situation or behaviour which may
restrict competition.
The term monopoly has a technical meaning in most statutes, but is
commonly used to indicate any situation where somebody has the sole power,
or privilege, in dealing in anything.2 This definition covers not only a
monopoly, but also any other form of anti-competitive behaviour. The term
monopoly was used in this wider sense as far back as the time of the Roman
Empire.
2 Roman law
Monopolies have been with mankind for a long time and, already in the Roman
period, its possible adverse effects were evident.3 The Romans attempted to
curb monopolies by means of laws imposing criminal sanctions. The earliest
such law is the lex Julia de annona: it imposed a heavy fine for any act which
* Part time lecturer in the Department of Private Law, Rand Afrikaans University.
Reekie Monopoly: Paragon or Pariah? Optima (published by Anglo American and De Beers)
vol 38 no 2 44.
Chalmers Twentieth Century Dictionary (1966) 124-127.
3 This part is based on an article by Cowen A Survey of the Law relating to the Control of
Monopoly in South Africa 1950 South African Journal of Economics.
618
TSAR 1992.4
[ISSN 0257-7747]](ViewImageLocal?handle=hein.journals/jsouafl1992&div=85&collection=&method=preview&ext=.png&size=3)
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Monopolies and the Role of the Competition Board
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