ÎçÒ¹Ó°Ôº

South African Competition Law Compensatory Damages: Lessons from the United States’ Direct and Indirect Purchaser Antitrust Doctrine

Host institution: ÎçÒ¹Ó°Ôº School of Law
Dates of visit: 27 October 2025-16 December 2025

Introduction and purpose of the report

The purpose of the report is to provide an account of the research activities undertaken, the objectives achieved, the outputs produced, and the overall value of the funding support provided by UMSAEP. The research sought to address a critical gap in South African competition law concerning the treatment of direct and indirect purchasers in claims for compensatory damages arising from anti‑competitive conduct. The project adopted a comparative legal approach, drawing extensively on United States antitrust jurisprudence to generate insights relevant to South African law, policy, and enforcement practice.

Overview of the research objectives

The research was guided by five core objectives, all of which were achieved during the project period:

• To investigate the legal definitions and distinctions between direct and indirect purchasers in United States antitrust law.
• To analyse American case law and judicial interpretations that have shaped the awarding of compensatory damages to different categories of purchasers.
• To evaluate the economic theories and principles underpinning damages awards in antitrust law.
• To identify the challenges and opportunities faced by direct and indirect purchasers seeking compensatory damages under South African competition law.
• To develop recommendations for legal and policy reforms aimed at enhancing the effectiveness and fairness of competition law damages in South Africa.

These objectives were pursued through a structured programme of doctrinal research, comparative analysis, and scholarly engagement at the ÎçÒ¹Ó°Ôº Columbia.

In the first week upon my arrival, Prof Uphoff accompanied me to the law school library and introduced me to Cindy Shearrer (Law Librarian for Collection Management) who gave me a tour of the library and its resources. During the research stay, I was also assisted by Cindy Basset (the Director of the Law Library), to access some electronic databases. The host, Prof Lambert, also assisted me with some books, journal articles and treatise. Therefore, during the research stay I made extensive use of the law library electronic databases and print collections. Michelle Rapp (Assistant to the Registrar) also loaned me an access card to the law faculty so I could access the library outside of working hours.

Summary of research findings

The research confirmed that United States antitrust law has historically drawn a firm distinction between direct and indirect purchasers for the purposes of claiming compensatory damages. 
However, the research also demonstrated that this doctrine has been subject to sustained criticism and gradual qualification. The study examined the economic rationale for limiting damages claims to direct purchasers, including concerns about pass on analysis, causal attribution, and administrative efficiency. While these concerns remain relevant, the research found that advances in economic modelling, statistical analysis, and empirical methods have significantly reduced the force of earlier objections to indirect purchaser claims. The research further highlighted that excluding indirect purchasers from damages claims may undermine both compensation and deterrence objectives, particularly in cases involving consumer goods where overcharges are routinely passed down the supply chain.

The research makes several important contributions to scholarship, policy, and practice:

Doctrinal Clarification: the study provides a structured analysis of how direct and indirect purchaser distinctions may be interpreted within the South African legal framework.

Policy Insight: by critically assessing the rationale for excluding indirect purchasers, the research challenges assumptions that have historically shaped damages jurisprudence and highlights alternative approaches that better align with South Africa’s constitutional and public interest objectives.

Comparative Methodology: the research demonstrates how foreign jurisprudence can be used cautiously and contextually, rather than mechanically transplanted, when interpreting South African competition law.

Public Interest Orientation: the findings underscore the importance of compensatory damages as a mechanism for advancing consumer welfare, access to justice, and socio economic rights, particularly in markets affecting basic necessities.

Assessment of the research collaboration

The academic exchange and collaboration with the ÎçÒ¹Ó°Ôº Columbia was a central strength of the project. Access to institutional resources, exposure to US antitrust scholarship, and direct engagement with Prof Lambert, an expert in the field significantly enhanced the quality and credibility of the research. The collaboration fulfilled the objectives of the linkage programme by facilitating meaningful knowledge exchange, capacity building, and long term institutional relationships. The project demonstrates the value of international academic mobility in addressing complex legal and policy challenges in the Global South. A primary challenge encountered during the project was the density and volume of comparative material, particularly given the evolving nature of US antitrust jurisprudence. This was mitigated through focused scoping of case law, prioritisation of landmark decisions, and academic consultation with Prof Lambert.

The research has enhanced scholarly understanding of competition law damages in South Africa and has provided a framework for courts and policymakers to engage more critically with foreign jurisprudence. By foregrounding the position of indirect purchasers, the study contributes to broader debates about fairness, deterrence, and access to justice in competition law enforcement.

Looking ahead, the research opens avenues for further empirical work on damages quantification in South African class actions and for comparative engagement with other jurisdictions that have adopted more inclusive approaches to indirect purchaser claims.

Outputs and dissemination

The principal academic output of the research is a full length scholarly article that has been prepared for submission to De Jure, a peer reviewed law journal accredited by the South African Department of Higher Education and Training. The article presents the core findings of the study and advances a normative argument for a more inclusive approach to competition law damages in South Africa. Once published, the research aligns with the researcher’s role as a non governmental expert adviser at the Competition Commission of South Africa and supports the translation of scholarly work into enforcement practice. The research has also strengthened the foundation for future academic collaboration between the University of the Western Cape and the ÎçÒ¹Ó°Ôº Columbia.

Conclusion and acknowledgement of support

The research project was completed successfully and in alignment with the objectives of the UM–UWC Academic Exchange Programme. The funding support provided by the sponsors was instrumental in enabling the research that would not have been possible without international academic collaboration. The principal investigator wishes to express sincere appreciation to the sponsors for their support, which has contributed meaningfully to advancing scholarship, strengthening institutional partnerships, and promoting the development of competition law in South Africa.