Neutrality legislation safeguards the conditions for healthy and functional competition on the market. In practice, this means that the FCCA will not (cannot) intervene in a given situation, if protection against a public sector competitor is only being sought on the basis of neutrality provisions. It must therefore be proven that the public sector competitor is distorting the conditions for competition or preventing the establishment or development of competition on the market. Although the burden of proof for this lies with the FCCA if it intervenes in the situation, the undertaking interfering with neutrality must "provide information as to the grounds for his/her demands...(and) otherwise contribute to the clarification of a matter filed by him/her." (Administrative Procedure Act, Section 31).
Simply listing the problems encountered will not necessarily launch an investigation.
In practice, intervention in a case also requires that it be manifestly justified, which is expressed by a decision to not investigate, as stipulated in Section 32(4) of the Competition Act.
Competitive neutrality legislation also has another dimension. The FCCA is also responsible for ensuring that municipal pricing is market-based in exceptional situations where the Local Government Act does not require business activities to be corporatised.