The basis for challenging cartel conduct or effects in Zimbabwe is the Competition Act (the Act) [Chapter 14:28], (ref Section 28(1) and Section 42). The Act prohibits any type of business agreement, arrangement, understanding or method of trading that – in the opinion of Zimbabwe's main competition regulator, the Competition and Tariff Commission (the Commission) – is being or may be adopted for the purpose of the creation or maintenance of a restrictive practice or any monopoly situation, which the Commission has reason to believe exists or may come into existence.
The public enforcement agency for cartel matters in Zimbabwe is the Competition and Tariff Commission (the Commission), a statutory body established under the Act. The present Commission is a product of the merger, in 2001, of the former Industry and Trade Competition Commission (ITCC) and Tariff Commission (TC). The ITCC had been established in terms of Section 4 of the Act, while the TC had been established under the Tariff Commission Act [Chapter 14:29] as a trade tariffs advisory authority. The merger of the ITCC and TC was provided for under the Competition Amendment Act (No 29) of 2001, which also repealed the Tariff Commission Act.
The Commission is therefore responsible for implementing Zimbabwe’s competition policy and the execution of the country’s trade tariffs policy, with the primary objective of enforcing the Act. In carrying out its mandate, the Commission is not subject to the direction or control of any other person or authority.
The Commission acts as the investigative arm and is the primary point of contact between the competition authority and the public at large. The Commission is the recipient, in the first instance, of merger filings and complaints relating to alleged restrictive practices. In investigating matters, the Commission may invoke its very broad investigative powers under the Commissions of Inquiry Act [Chapter 10:07], which include the right to summon witnesses for examination and subpoena any person to give evidence or to produce any book, plan or document necessary to the investigation.
When carrying out an investigation into a restrictive practice and monopoly situation, the Commission may give written notice to any person engaged in any business or industry to furnish it with information regarding, inter alia, any:
A person who fails to provide this information to the Commission will be liable to a fine not exceeding level six (ZWL4,800), imprisonment for a period not exceeding six months, or both.
After carrying out an investigation into a restrictive practice or a monopoly situation, the Commission has the power to make orders prohibiting or regulating a restrictive practice that exists, may come into existence, or that will be contrary to the public interest. These orders can be enforced through the High Court, and they include, inter alia:
The Commission does not have specialist appeal and review authority in competition matters. Appeals against a decision of the Commission are determined by the Administrative Court, which court operates in a similar manner to a civil court. In a competition-related appeal, the bench will be composed of a judge of the Administrative Court and two assessors with ability and experience in commerce, industry, agriculture, administration or who have professional qualifications.
Unfair Business Practice
In addition to prohibiting and regulating restrictive practices, Section 42(3) of the Act also prohibits any person from engaging in or giving effect to an unfair business practice. Any person who engages in such an activity will be guilty of an offence and liable:
Any person who suffers injury, loss or harm as a result of any agreement, arrangement, undertaking, act or omission may recover damages, by proceedings in a court of competent jurisdiction, from every person responsible for the agreement, arrangement, undertaking, act or omission. The loss or harm must result from an agreement, arrangement, undertaking, act or omission which constitutes an unfair business practice, is entered into in furtherance of an unfair business practice, or is entered into in contravention of this Act or any order or notice under this Act. Such an agreement shall have no legal effect.
If the Commission, after investigating a complaint by a party regarding an alleged restrictive practice or a complaint regarding an unfair business practice, decides that the complaint cannot be substantiated or that it is without sufficient merit, that party may note an appeal to the Administrative Court against the Commission’s decision.
The Act does not expressly define or refer to "cartels" or "cartel conduct", instead, the Act makes reference to a “monopoly situation”, which means a situation in which a single person exercises, or two or more persons with a substantial economic connection exercise, substantial market control over any commodity or service.
The variety of competition law violations that can be classified as cartel conduct are restrictive practices, mergers and monopoly situations under Section 28 of the Act. These are considered using a rule-of-reason approach. Section 42 also prohibits unfair business practices that are referred to as per se offences.
A “restrictive practice” is broadly defined in terms of Section 2(1) of the Act, and includes:
which restricts competition directly or indirectly to a material degree.
An agreement or arrangement will be considered as a restrictive practice if it has any of the following effects;
Abuse of Dominance
Anti-competitive agreements and other concerted action, as well as unilateral conduct of an abusive nature, are proscribed. Abuse of dominance, or monopolisation, is therefore covered in this definition. The Commission may regard a restrictive practice as contrary to the public interest if it is engaged in by a person with substantial market control over a commodity or service to which the practice relates.
The concept of “an agreement” is interpreted widely and, when used in relation to a restrictive practice, includes a contract, arrangement, understanding, or undertaking whether or not it is legally enforceable. A “concerted action” is not defined in the Act but can be interpreted to mean co-operative or co-ordinated conduct between firms, achieved through direct or indirect contact, that replaces their independent action, but which does not amount to an agreement.
Unfair Business Practice
An “unfair business practice” is another variety of competition law violation. Unfair business practices include:
These unfair business practices are deemed per se offences, and any agreement, arrangement, undertaking, act or omission which qualifies under any of the above categories of unfair business practices will be void from the date on which the conduct concerned became an unfair business practice or the order was made by the Commission.
The anti-competitive effects of a per se offence are presumed to exist and cannot be justified or defended on the basis of any alleged technological, efficiency or other pro-competitive gains flowing from the relevant conduct.
The Act applies to all economic activity within, or having an effect within, the Republic of Zimbabwe. Legitimate joint ventures between competitors or potential competitors and concerted actions designed to achieve a non-commercial, socio-economic objective or similar purpose do not amount to a violation of the Act.
The Act and Regulations do not identify or specify sectors or industries that are exempt from the provisions of the Act. However, Section 35(1) and (2) of the Act allow for any person to apply for authorisation to enter into, carry out or otherwise give effect to any agreement or arrangement, or engage in any practice or conduct, which may be prohibited, restricted or otherwise affected by the Act.
These provisions can be construed as allowing certain conduct involving joint action between competitors and the said joint action will not be considered as a violation of law.
The Act does not expressly provide specific timeframes in which a complaint in respect of restrictive practices may be made to the Commission. In practice, this means that a complaint in respect of restrictive practices may be initiated at any time, provided the restrictive practice concerned is ongoing.
The Act applies to all economic activity within, or having an effect within, the Republic of Zimbabwe. In the context of Section 28 and 42, the Act can be construed as also applying to agreements or arrangements concluded outside Zimbabwe, but that have an effect within Zimbabwe. In practice, it may be difficult for the competition authorities to act against firms domiciled outside their jurisdiction, but whose conduct has an effect in Zimbabwe, especially where foreign firms have no local office or physical presence in the country.
The Commission generally accepts the submission of documents electronically as well as the submission of written statements of individuals, where individuals may not be available in the country.
The principles of comity are generally observed and recognised in Zimbabwe through case law authority. The courts do not readily surrender their jurisdiction, especially where the principles of comity and effectiveness are satisfied. The comity principle would be satisfied where there is no danger of offending another state by exercising jurisdiction in a matter and the effectiveness of the principle would be satisfied where the court is able to reach the parties involved and so give effect to its judgment.
Therefore, the Commission would be cognisant of the principles of international comity, particularly in the event of prosecution of cartel conduct by foreign firms.
Initial investigatory steps taken by enforcement agencies include making a preliminary investigation without notice, publishing a notice in both the Gazette and a newspaper stating the nature of the proposed investigation, issuing requests for information from industry participants, subpoenaing witnesses and conducting dawn raids.
The Act allows the Commission’s investigators to conduct unannounced visits or inspections at a firm’s premises, however, these are not common in Zimbabwe.
The Act provides mechanisms by which the Commission may enter and search premises, either with the consent of the owner or person in charge of the premises, or on the basis of a warrant issued by a magistrate. Regarding the latter instance, a warrant to enter and search the premises will be granted where there are reasonable grounds for believing that it is necessary for an investigating officer to do so to prevent, investigate or detect an offence or for obtaining evidence relating to such an offence.
Any person who obstructs or refuses to comply with an investigating officer will be guilty of an offence and liable to a fine not exceeding level 6 (ZWL4, 800).
An investigating officer may require any person on the premises to disclose all information at their disposal, and produce any book, record or document that may relate to a restrictive practice, unlawful practice, merger or monopoly situation. The investigating officer may also make copies or take extracts from any document relating to a restrictive practice.
A dawn raid or surprise visit may only be executed during reasonable times, unless the warrant determines otherwise and must be conducted with strict regard to decency, freedom, security and privacy, and in accordance with the rights afforded through the Constitution of Zimbabwe.
The Act provides that an investigating officer may inspect and make copies of any book, record or documents. The term “record” is not defined in the Act but can be interpreted broadly within the purpose of inspections. Therefore, an investigating officer would be entitled to inspect and make copies of email records and other relevant electronic documentation, provided it relates to the investigation of a restrictive practice.
The Act does not expressly allow an investigating officer to seize or remove a firm’s computers, books, records or documents from the premises.
It is an offence to:
During a dawn raid, an investigating officer may enter premises, examine and copy documents (both in hard and electronic format) and request evidence from employees in order to obtain information regarding suspected restrictive practices.
Section 2 of the Constitution of Zimbabwe prescribes that the Constitution is the supreme law of the land and that any law inconsistent with it will be invalid. Thus, the Act must be interpreted in a manner consistent with the Constitution.
Persons under investigation by the Commission are afforded all the constitutional rights available to any participant in judicial proceedings, including the right to be represented and assisted by counsel. Generally, a firm may elect to have its in-house counsel or external counsel perform this role.
The Act does not prescribe that persons under investigation must obtain separate counsel.
Principal steps to undertake during the initial phase of a Commission investigation or complaint referral include obtaining all the relevant facts and corroborating evidence, and obtaining clarity from the Commission as regards the prohibited practice being investigated and the time period relevant to the complaint. If any concerns are identified during the initial phase, consideration should be given to engaging in "without prejudice" settlement negotiations with the Commission.
The Commission can issue requests for information. The Commission can also utilise its statutory investigative powers, such as entry and inspection of premises, subpoenaing witnesses and requiring them to provide documents and/or appear for interrogations by the Commission’s investigators.
The Commission can also obtain information from persons under investigation who have settled or are engaged in settlement negotiations with the Commission.
The Commission can obtain oral evidence through subpoena witnesses or through oral submissions or proffers provided by informants.
The Act applies to agreements or concerted practices concluded outside Zimbabwe by foreign firms, in so far as they have an effect within Zimbabwe. Foreign firms have a duty to reply to requests for documents and information. In general, firms are required to produce documents and evidence in their possession including documents and information located outside Zimbabwe.
The Commission’s powers of inspection are subject to claims of privilege. Privileged documents are not required to be produced during discovery or in response to a request for information. If a firm claims privilege over a document during an entry and inspection, the Commission may make an application to the High Court for determination on whether that document is indeed privileged.
Individuals may be summoned to provide documents and respond to questions from the Commission. However, a question does not have to be answered if it is self-incriminating. The only criminal proceedings in which self-incriminating information may be used are those relating to perjury.
Firms under investigation generally co-operate voluntarily with the Commission. In the event that firms elect not to co-operate nor to respond to requests for information, the Commission can utilise its investigative powers or enter and inspect premises. Nonco-operation with the Commission’s legitimate and lawful requests is an offence and creates criminal penalties ranging from fines to imprisonment.
The Act does not define confidential or proprietary information, nor does it expressly provide that persons subject to investigations are entitled not to disclose confidential or proprietary information; however, confidential or proprietary information that does not relate to an alleged restrictive practice does not have to be disclosed.
Defence counsel may raise legal and factual arguments once a Notice to Investigate has been issued. The Notice will stipulate the timeframes for submissions. The validity and scope of the notice to investigate can be challenged upon publication in the Gazette or in a newspaper. The validity of a warrant of entry and inspection of premises can be challenged during or at the conclusion of the entry and inspection.
The Act does not expressly provide a leniency regime or policy for cartel participants.
The Commission may direct requests for information to employees and may subpoena employees to give evidence. The only limitation is that no person shall be required to disclose information that he or she could not be required to disclose when giving evidence in a court of law.
The Commission may direct requests for information to firms and may subpoena a target company to give evidence.
There are no specific provisions in the Act on the Commission's power to seek information from companies or individuals located outside its jurisdiction. However, the court rules provide for an order of Edictal Citation which allows for a process or document whereby proceedings are instituted to be served outside Zimbabwe with the leave of the court or a judge.
There is significant inter-agency interaction between the Commission and other regulators, in so far as the Act applies to an industry or sector that is subject to the jurisdiction of another regulatory authority.
The Commission co-operates with foreign enforcement agencies, including the Common Market for Eastern Southern Africa (COMESA). Unfortunately, no information on this activity is in the public domain.
Criminal prosecution is not conducted by the Commission, but through the National Prosecuting Authority (NPA) and the criminal justice system. The law relating to criminal prosecution for cartel conduct is undeveloped in Zimbabwe.
Any person or firm that has suffered loss or damage as a result of a prohibited practice may institute action through civil court proceedings for the assessment and awarding of damages in terms of Section 44 of the Act.
Action proceedings are instated by way of summons. The summons must be filed with the court and served on the defendant. In Zimbabwe, the High Court has original jurisdiction to hear any civil matter irrespective of the monetary value of the claim, however, the Magistrate's Court has jurisdiction to determine civil matters where the monetary value of the claim does not exceed ZWL300,000. In the High Court, evidence is presented to a judge and in the Magistrate's Court, to a magistrate.
As for some of the applicable pre-trial procedures, parties must give each other notice to make discovery, inspection and production of any relevant documentation in their possession that they intend to present to the court. Thereafter, parties must attend a pre-trial conference before a Judge or magistrate to determine the issues for trial, number of witnesses to be called, and the proposed duration of the trial.
In terms of Section 6 of the Access to Information and Protection of Privacy Act [Chapter 10:27], any person who requires access to a record that is in the custody or control of a public body (ie, Competition and Tariff Commission) must make a request, in writing, to the public body concerned, giving adequate and precise details to enable the public body to locate the information so requested.
It is, however, worth noting that the right to access to information does not extend to:
Enforcement actions involving cartels may be brought against multiple parties in a single proceeding. Generally, separation of trials will be applied in terms of the court rules if claims in respect of two or more causes of action are included by a party in the same action or by a defendant in a claim in reconvention, or if two or more plaintiffs or defendants are parties to the same action, and it appears to the court that the joinder of causes of action or of parties, as the case may be, may embarrass or delay the trial or is otherwise inconvenient, the court may order separate trials or make such other order as may be expedient.
The standard of proof is the balance of probabilities, similar to the standard of proof in civil law matters.
A judge or magistrate acts as the principal finder of facts. Parties who have been granted the right to intervene and participate in litigation proceedings may, subject to the discretion of the court, produce and discover additional documents, and may call for further discovery by other participants in proceedings.
Section 28 of the Civil Evidence Act [Chapter 8:01] permits the admission into evidence of a certified transcript or sworn affidavit produced in other proceedings; if the person who gave the evidence has died, cannot be found, cannot be compelled to give evidence, or for some other good and sufficient cause cannot be called to give evidence.
In terms of Section 16 of the same Act, a foreign document which has been prepared, attested, certified, compiled or executed in a designated country is admissible in evidence; provided that the foreign document has been prepared, attested, certified, compiled or executed, as the case may be, by an equivalent person in the designated country concerned.
The basic prerequisites of admissibility are relevance, materiality, and competence. In general, if evidence is shown to be relevant, material, and competent, and is not barred by an exclusionary rule, it is admissible. The burden of proof in civil matters is on a balance of probabilities, and the onus or duty to begin usually rests on the plaintiff; however, the defendant may lead evidence first on issues which he or she bears the onus to prove.
Generally, the plaintiff will lead examination in chief of his or her witness(es), followed by cross examination by the defendant, and then re-examination by the plaintiff. At the close of the plaintiff’s case, the defendant is entitled to apply for dismissal of the plaintiff’s claim if the plaintiff has not adduced sufficient evidence to establish a cause of action. If such an application is granted, then the claim is dismissed. If not, the defendant will proceed to lead examination in chief of his or her witness(es), followed by cross examination by the plaintiff, and then re-examination by the defendant.
Experts may be used by the Commission, or by the person or firm under investigation, to provide economic and business analysis in respect of the effects of an alleged restrictive practice or unfair business practice.
Privileged documents are not required to be produced during discovery or in response to a summons. A question does not have to be answered if it is self-incriminating, unless it relates to criminal proceedings relating to perjury.
The Act does not provide for a multiplicity of actions arising out of the same or related facts.
The Commission may impose any remedy or sanction provided for in the Act, including interdicting any prohibited practice or ordering a party to terminate a monopoly situation.
The Act does expressly provide that a party under investigation may negotiate and agree with the Commission at any time on the terms of an appropriate settlement. The terms of settlement agreements are the subject of negotiation between the Commission and the party concerned, but will usually include an admission of guilt and the development of a compliance programme, and the Commission will reduce any such settlement to an order.
A finding that a firm has engaged in a restrictive practice, unfair business practice or a monopoly situation could result in a claim for civil damages or criminal prosecution (in the event that a firm does not comply with the necessary disclosure requirements under an investigation). However, there is no provision in the relevant procurement legislation which provides that a company and its officers may be blacklisted or debarred from the governmental bidding process if liability or responsibility for cartel conduct is established.
If liability or responsibility is established, a firm can initiate negotiations with the Commission at any time as provided by the Act, which can be used to mitigate the collateral effects of liability in terms of the Act.
In criminal proceedings, the penalties are imposed by the magistrate or judge presiding and as a product of an adversarial proceeding with the leading of evidence and argument.
Generally, sanctions are proposed by the National Prosecuting Authority in the normal course of prosecuting a matter, but for offences under the Act, the court may impose fines ranging from level 6 up to level 14 (from ZWL4,800 to ZWL120,000) and periods of imprisonment ranging from six months to two years depending on the nature of the offence committed.
In civil proceedings, Section 44(1) of the Act provides that any person (ie companies and individuals) that engages in an unfair business practice that causes damage or loss to another person will be liable to pay appropriate damages as assessed by the court. This provision, however, does not limit a person’s remedy under any other law for injury, loss or harm that has been or may be occasioned to him or her by any agreement, arrangement, undertaking, act or omission which constitutes an unfair business practice. There are no special circumstances where this sanction is also available.
Damages in civil proceedings are imposed by the magistrate or judge presiding and as a product of an adversarial proceeding with the leading of evidence and argument.
According to the case of Innscor Africa Ltd v The Competition and Tariff Commission AC-016-15, the Commission may not impose a civil penalty order in relation to a restrictive practice or a monopoly situation. However, Section 31(1) provides that the Commission may impose "orders" to regulate future restrictive practices or monopoly situations created by companies or individuals. In particular, the Commission may:
Therefore, where liability or responsibility is established, the orders provided under Section 31(1) of the Act generally follow.
The existence of and the extent to which a firm has applied a compliance programme may be a factor taken into consideration by the court in mitigation of sentence.
Section 31(1)(f) of the Act is wide enough to allow consumer redress. It provides that, the Commission may make provision as reasonably necessary to terminate a restrictive practice or alleviate its effects.
A decision or order made by the Commission may be appealed against by any person affected by the same, which appeal is to the Administrative Court. If a party is aggrieved by the decision of the Administrative Court, the decision may be taken on review or appealed against to the High Court. Thereafter, a party may only take the decision of the High Court on appeal to the Supreme Court, which is the highest court in non-constitutional matters.
In appeal proceedings, the standard applied is whether the Commission/court failed to appreciate a fact at all or made a finding of fact that is contrary to the evidence actually presented. In addition, another standard is whether the Commission/court made a gross misdirection on the facts, amounting to a misdirection in law.
In review proceedings, the two main grounds upon which the High Court can interfere with the Administrative Court’s proceedings are, firstly, that the Administrative Court acted beyond the powers allocated to it (ultra vires) and, secondly, that it did not comply with the principles of natural justice.
Generally, litigation on competition matters is uncommon, however, when punitive action has been taken parties have sought recourse on appeal.
Please refer to 1.3 Private Challenges of Cartel Behaviour/Effects.
Class actions are possible within the Zimbabwean legal system in terms of the Class Actions Act [Chapter 8:17] and consumer associations and public interest groups have legal standing to bring them; however, the substantive and procedural aspects of class action suits in competition matters have not been tested by the country’s courts.
The underlying objective of damages claims and the civil court’s determination of the quantum of damages is to return the plaintiff to the position that it would have been in, had it not been for the competition law infringement.
In developed countries passing-on defences are a live issue when assessing damages in cartel issues. However, Zimbabwean jurisprudence is not as developed owing to inactivity, hence there are no developed principles on the issue in our jurisdiction.
The High Court, in particular, has inherent jurisdiction and may control its own process, which means it has a wide discretion and may accept as evidence any relevant oral testimony, document or article. This could include evidence from governmental investigations.
The law relating to civil damages claims relating to unfair business practices is undeveloped in Zimbabwe.
Costs are awarded according to the discretion of the court and are generally awarded to the successful party.
Please refer to 5.6 Compensation of Legal Representatives.
Decisions of the civil courts in relation to civil damages claims in the Magistrate's Court may be appealed or reviewed in the High Court in accordance with the High Court (Civil) Rules, 1979; and an appeal from the High Court is determined by the Supreme Court in terms of the Supreme Court Rules, 2018.
There are no other items of information that are pertinent to an understanding of the process, scope and adjudication of claims involving alleged cartel conduct in Zimbabwe.
The Commission issues guidelines from time to time, but these are not binding on the Commission or the courts.
The global COVID-19 pandemic has had a crushing impact on most businesses with the world in a forced lockdown. The result being that many businesses are struggling to get regular shipments of their products and this may create a monopoly situation for those businesses that are able to get regular shipments into the country.