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[2010] ZACT 21
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Competition Commission v BMW South Africa (Pty) Ltd t/a BMW Motorrad (97/CR/Sep08) [2010] ZACT 21; [2010] 1 CPLR 64 (CT) (17 March 2010)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No.: 97/CR/Sep08
In the matter between:
Competition
Commission
Applicant
and
BMW South Africa (Pty)
Ltd t/a BMW Motorrad First Respondent
Panel Norman Manoim
(Presiding Member);
Yasmin Carrim
(Tribunal Member); and
Andiswa Ndoni
(Tribunai Member)
Heard on 17 March 2010
Decided on : 17 March
2010
ORDER
The Tribunal hereby
confirms the settlement agreement and the addendum thereto, agreed to
between the Competition Commission and
the First Respondent, annexed
hereto marked A and B respectively.
Norman Manoim Presiding
Member
Concurring:
Yasmin
Carrim and Andiswa Ndoni
BEFORE THE COMPETITION
TRIBUNAL OF SOUTH AFRICA
(HELD IN PRETORIA)
CT CASE NO: 97CRSep08 CC
CASE NO: 2004Oct1239
In
the
matter
between:
COMPETITION
COMMISSION
Applicant
and
BMW SOUTH AFRICA (PTY)
LTD t/a BMW MOTORRAD
First
Respondent
in
re:
COMPETITION
COMMISSION
Applicant
and
BMW SOUTH AFRICA (PTY)
LTD
First
Respondent
LYNDHURST AUTO (PTY)
LTD
Second
Respondent
AUTOHAUS MONTI (PTY)
LTD
Third
Respondent
NORTHSIDE MOTORCYLCES
(PTY) LTD
Fourth
Respondent
SOVEREIGN MOTORS (PTY)
LTD
Fifth
Respondent
TOMMY JOHNS
MOTORCYCLES (PTY) LTD
Sixth
Respondent
SPEED BIKE-BLOEMFONTBN
(PTY) LTD
Seventh
Respondent
SPEED BIKE
CENTRE-KLERKSDORP (PTY) LTD
Eighth
Respondent
BAVARIAN MOTORCYCLES
(PTY) LTD
Ninth
Respondent
MENLYN MOTTORAD (PTY)
LTD
Tenth
Respondent
AUTO ATLANTIC
MOTORCYCLES TWEFCO (PTY) LTD
Eleventh
Respondent
AUTO
ALPINA WIOTORCYLCES (PTY) LTD
Twelfth
Respondent
AUTO UMHLANGA (PTY)
LTD
Thirteenth
Respondent
SETTLEMENT AGREEMENT
The applicant and the
first respondent hereby agree that application be made to the
Competition Tribunal ('Tribunal") to
confirm the settlement
agreement as an order of the Tribunal in terns of section 58(1)(a)
of the Act on the terms set out below.
1
.
Definitions
1.1. The 'Act' means the
Competition Act, 89 of 1998
, as amended.
1.2. 'authorised
dealers' means parties contracted to the first respondent to
distribute and/or sell in South Africa motorcycles
and accessories
(helmets, rider gear, boots, gloves, top boxes, panniers and the
like) which the first respondent imports, distributes
and/or sells
in South Africa.
1.3. 'BMW* means the
first respondent, BMW (South Africa) (Pty) Ltd, a company duly
incorporated with limited liability in accordance
with the laws of
South
Africa
with its principal place of business at 1 Bavaria Road, Randjiespark
Extension 17, Midrand.
1.4. 'BMW Lifestyle
Centre' means BMW's Lifestyle Centre in Midrand through which BMW
also sells and/or distributes new motorcycles
and accessories
(helmets, rider gear, boots, gloves, top boxes, panniers and the
like).
1.5. 'Commission' means
the applicant, the Competition Commission of South Africa, a
statutory body established in terms of
section 19
of the Act,
with
its
principal place of business at Building C, The dti Campus, 77
Meintjies Street, Sunnyside, Pretoria.
1.6. 'Commissioner'
means the Commissioner of the Commission appointed in terms of
section 22
of the Act.
1.7. The 'Complainant'
means Fourier Holdings (Pty) Ltd t/a Bryanston Motorcycles, whose
principal place of business was situated
at the corner of William
Nicol Drive and Grosvenor Avenue, Bryanston.
1.8.
The
'DAR' means the Dealer Area of Responsibility which is stipulated in
dealer agreements concluded between BMW and authorised
dealers to
demarcate the geographical area in respect of which an authorised
dealer is given a right to sell
and/or distribute motorcycles and
accessories as defined below.
1.9. 'motorcycles and
accessories' mean motorcycles and accessories (helmets, rider gear,
boots, gloves, top boxes, panniers and
the like) which BMW
distributes and/or sells through the authorised dealers and through
BMW Lifestyle Centre.
1.10. 'Parties' mean the
Commission and BMW.
1.11. Tribunal' means
the Competition Tribunal of South Africa, a statutory body
established in terms of
section 26
of the Act, with its principal
place of business at Building C, Mulayo Building, dti Campus, 77
Meintjies Street, Sunnyside,
Pretoria, Gauteng.
2.
Complaint
investigation
2.1.
On
8 October 2004 the Complainant submitted a complaint alleging
anti-competitive conduct by BMW.
2.2. The Commission
investigated the complaint and referred (on 4 September 2008) the
following particulars of the complaint to
the Tribunal for
determination:
2.2.1. BMW engages in
the practice of resale price maintenance in contravention of
section
5(2)
of the Act in that it does not permit authorised dealers to
offer discounts to customers in respect of motorcycles and
accessories.
BMW abuses its
dominance in contravention of
section 8(c)
of the Act in that it
prevents authorised dealers from competing for customers in areas
outside their DARs whilst not imposing
a similar restriction
against BMW Lifestyle Centre. Alternatively to
section 8(c)
, that
this conduct of BMW amounts to a prohibited vertical practice in
contravention of
section 5(1)
of the Act.
2.3.
BMW fiied answering affidavits in which it denies the allegations
against it. ft does not admit any of the alleged contraventions,
including in this agreement.
3.
Withdrawal
of part of the complaint
referred
3.1. On 11 November 2009
the Commission formally and unconditionally withdrew the complaint
based on
sections 8(c)
and
5
(1) of the Act.
4.
Set
down of the complaint
4.1. The complaint
relating to
section 5(2)
of the Act was set down for hearing before
the Tribunai from 15 to 19 March 2010.
4.2. The Commission
filed three witness statements on 18 February 2010. It confirmed to
BMW on 22 February 2010 that it would
not be filing any further
witness statements. BMW filed nine witness statements, the ninth of
which was filed on 8 March 2010.
5.
The
Commission's considerations for settlement
5.1. In agreeing to
settle with BMW, the Commission has taken into account the
following:
5.1.1. One of its key
witnesses no longer wishes to testify and refuses to accept any
subpoena.
5.1.2. BMW terminated
its dealer agreement with the Complainant during 2002 and/or early
2003. The conduct complained of by the
Complainant relates to the
period when BMW and the Complainant were still contracted to each
other.
5.1.3.
The
termination of the dealer agreement resulted in High Court
proceedings between BMW and the Complainant which are unrelated
to
this complaint. BMW has expressed a willingness, independently of
these competition proceedings, to enter into discussions
with the
Complainant to resolve the High Court litigation - which concerns
commercial disputes between BMW and the Complainant.
5.1.4. BMW agrees to
give relevant undertakings as to future conduct as set out below.
6.
Agreement
concerning future conduct
6.1. Notwithstanding
that BMW denies that it has contravened
section 5(2)
of the Act, it
undertakes, in order to resolve the complaint referral, that it wiil
not in future enforce any rule, policy or
practice against its
authorised dealers not to give any discounts to customers in respect
of motorcycles and accessories (helmets,
rider gear, boots, gloves,
top boxes, panniers and the like) which it imports and sells in
South Africa through its network of
authorised dealers.
7.
Full
and Final Settlement
7.1. This agreement,
upon confirmation by the Tribunal, is entered into in full and final
settlement and concludes all proceedings
between the Commission and
BMW relating to any alleged contravention by BMW of the Act, and
without limiting the generality of
the aforegoing, from all and any
alleged conduct by BMW that is the subject of the Commission's
referral under CC case number
2004Oct1239 and Tribunal case number
97CRSep08.
Dated and signed at
Pretoria on the
16
day
of March 2010
Director: Legal Services
BMW (South Africa) (Pty)
Ltd t/a BMW Motorrad duly authorised
Dated and signed at
Pretoria on the
16
day
of March 2010
Commissioner
Competition
Commission
ADDENDUM
TO SETTLEMENT AGREEMENT Case No. 97/CR/Sep08
BMW acknowledges the
right of the Complainant to apply for a Declaration in terms of
section 58(1)(a)(v)
or (vi) of the Act in respect of its complaint
under
section 5(2)
of the Act, in this matter.
Any such application
shall be made within 20 business days of the date of this order.
Dated and signed at
Pretoria on the
17
day of
March 2010
Director: Legal Services
BMW (South Africa) (Pty)
Ltd t/a BMW Motorrad duly authorised
Dated and signed at
Pretoria on the
17
day of
March 2010
Commissioner
Competition
Commission