South Africa Competition Act 89 of 1998 5-1: No vertical agreements that substantially lessen competition

What does 5-1 require?

Agreements between firms at different levels of the supply chain (supplier and customer, franchisor and franchisee, licensor and licensee) are prohibited where they substantially weaken competition in a market, unless one of the parties proves that the arrangement's technological or efficiency benefits, or other gains for competition, outweigh that effect (section 5(1)). Exclusive dealing, exclusive territories, non-compete and most-favoured-customer clauses are assessed under this rule.