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[2012] ZACT 34
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Competition Commission v Bridgestone South Africa (Pty) Ltd (92/CR/Dec09) [2012] ZACT 34; [2012] 2 CPLR 232 (CT) (8 May 2012)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No.: 92/CR/Dec09
In
the matter between:
THE
COMPETITION COMMISSION
…....................................................................................
Applicant
And
BRIDGESTONE
SOUTH AFRICA (PTY) LTD
…........................................................
First
Respondent
MAXIPREST
TYRES (PTY) LTD
…...........................................................................
Second
Respondent
AUTO
AND TRUCK TYRES CC
…...............................................................................
Third
Respondent
In
re:
THE
COMPETITION COMMISSION
…....................................................................................
Applicant
And
BRIDGESTONE
SOUTH AFRICA (PTY) LTD
…........................................................
First
Respondent
MAXIPREST
TYRES (PTY) LTD
…...........................................................................
Second
Respondent
Panel:
Y
Carrim (Presiding Member) A Ndoni (Tribunal Member) and M Mokuena
(Tribunal Member)
Heard
on : 02 May 2012
Order
issued on : 08 May 2012
ORDER
The
Tribunal hereby confirms the order as agreed to and proposed by the
Competition Commission and the respondents, annexed hereto
marked
"A".
Presiding
Member
Y
Carrim
Concurring:
A
Ndoni and M Mokuena
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD
AT PRETORIA)
CC
CASE NO: 2007SEP3213
CT
CASE NO: 92/CR/DEC09
In
the matter between:
THE
COMPETITION COMMISSION
…....................................................................................
Applicant
And
BRIDGESTONE
SOUTH AFRICA (PTY) LTD
…........................................................
First
Respondent
MAXIPREST
TYRES (PTY) LTD
…...........................................................................
Second
Respondent
AUTO
AND TRUCK TYRES CC
…...............................................................................
Third
Respondent
In
re:
THE
COMPETITION COMMISSION
…....................................................................................
Applicant
And
BRIDGESTONE
SOUTH AFRICA (PTY) LTD
….........................................................
First
Respondent
MAXIPREST
TYRES (PTY) LTD
…...........................................................................
Second
Respondent
SETTLEMENT
AGREEMENT IN TERMS OF SECTION 58(1)(a) READ WITH
SECTION 59
OF THE
COMPETITION ACT NO. 89 OF 1998
, AS AMENDED, BETWEEN THE COMPETITION
COMMISSION, BRIDGESTONE SOUTH AFRICA (PTY) LTD AND MAXIPREST TYRES
(PTY) LTD IN RESPECT
OF CONTRAVENTION OF SECTIONS 4(1)(b)(i) and
4(1)(b)(ii) OF THE COMPETITION ACT,1998
The
Competition Commission, Bridgestone South Africa (Pty) Ltd and
Maxiprest Tyres (Pty) Ltd hereby agree that application be
made to
the Competition Tribunal for the confirmation of this Settlement
Agreement as an order of the Competition Tribunal in
terms of
sections 58(1
){a)
and
59 of the
Competition Act No.89 of 1998
, as amended, on the terms
set out below:
1
Definitions
In
this Settlement Agreement, unless the context indicates otherwise,
the following definitions will apply:
1.1.
'Act' means the
Competition Act, 89 of 1998
, as amended;
1.2.
'Bridgestone'
means
the First Respondent, Bridgestone South Africa (Pty) Ltd, a private
company duly registered and incorporated in accordance
with the faws
of the Republic of South Africa, with its principal place of
business at the corner of Isando and Quality Roads,
Isando,
Johannesburg.
1.3.
'Bridgestone brand'
means
tyres imported and manufactured by Bridgestone bearing the
Bridgestone trademarks.
1.4.
'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.
1.5.
'Complainant'
or
'ATT'
means
the Third Respondent, Auto and Truck Tyres CC, a close corporation
with its principal business situated at 5 Bezuidenhout
Street,
Wadeville, Germiston.
1.6.
'Firestone
1
means
tyres imported and manufactured by Bridgestone bearing the Firestone
trademarks. . .
1.7.
'Maxiprest'
means
the Second Respondent, Maxiprest Tyres (Pty) Ltd, a private company
dufy registered and incorporated in accordance with
the laws of the
Repubfic of South Africa, with its principal place of business at
the corner of van Acht and Gewei Streets, Isando,
Johannesburg.
Whilst Maxiprest and Bridgestone are subsidiary companies in the
same group, Maxiprest was an operationally independent
company
during the Relevant Period.
1.8.
'Parties to the agreement'
refers
to the Commission, Bridgestone and Maxiprest.
1.9.
'Relevant Period'
means
the period between October 2002 and 30 September 2005.
1.10.
'Settlement agreement
1
means
this agreement duly signed and concluded between the parties to the
agreement.
1.11.
TBR/S
tyres'
means truck and bus radial / truck and bus bias tyres,
1.12.
'Tribunal'
means
the Competition Tribunal of South Africa, a statutory body
established in terms of
section 26
of the Act as a Tribunal of
record, with its principal place of business at Building C, Mulayo
Building,
DTI
Campus,
77 Meintjies Street, Sunnyside, Pretoria.
2
The Complaint and Complaint investigation
2.1.
On 19 September 2007, the Commission commenced an investigation
against Maxiprest and Bridgestone pursuant to the Complainant
applying to the Commission for conditional immunity under the
Commission's Corporate Leniency Policy. It was alleged by ATT that:
(1)
ATT, Bridgestone and Maxiprest were involved in price fixing,
division and allocation of markets and collusive tendering during
the period 2002 to 2007;
(2)
Bridgestone was engaged in the practice of minimum resale price
maintenance during the same period in that it compelled ATT
and
Maxiprest to adhere to specific price levels in respect of
Bridgestone and Firestone branded tyres.
3
The Commission duly conducted an investigation which revealed that:
3.1.
In 2002 ATT and Maxiprest entered into negotiations for the purchase
by Maxiprest of 26% of ATT's shares. By October 2002,
and in light
of these negotiations, ATT and Maxiprest concluded an agreement in
relation to the sale of Bridgestone and Firestone
branded tyres, the
main terms of which were:
(1)
Maxiprest would treat ATT as if it were a Maxiprest branch, so that:
(a)
ATT received the same discount structure and prices from
Bridgestone
as a Maxiprest branch;
(b)
ATT would charge, the same minimum prices to customers as other
Maxiprest branches;
(c)
ATT and Maxiprest would not compete for each other's customers.
(2)
It was concluded, amongst others, that
(a)
there
was
an
agreement
between ATT and Maxiprest to fix prices and to allocate customers
in
the
sale of Bridgestone and Firestone branded tyres including TBR/S
tyres and re-treaded tyres; and
(b)
this
conduct contravened
sections 4(1
)(b)(i) and 4(1 }(b)(ii) of the
Act.
In light of its findings, the Commission referred the
complaint
against Bridgestone and Maxiprest in December 2009
to
the Tribunal.
4
Settlement
4.1.
Maxiprest commenced settlement negotiations with the Commission
during the course of the investigation; however consensus
on an
appropriate administrative penalty could not be reached.
4.2.
In continuing efforts to co-operate and resolve this matter,
Maxiprest proposed a further settlement offer to the Commission
in
November 2011
4.3.
This agreement is the product of negotiations between the
Commission, Bridgestone and Maxiprest. .
5
Admission
'
5.1.
Maxiprest admits that it reached an agreement with ATT in
contravention of
sections 4(1
)(b)(i) and 4(1 )(b)(ii) of the Act
during the Relevant Period and in
relation
to
the sale of Bridgestone and Firestone branded TBR/S tyres and
re-treaded tyres in Gauteng.
6
Future
Conduct
6.1.
Since the initiation of the complaint against Maxiprest and
Bridgestone, both companies have undertaken extensive competition
law compliance initiatives.
6.2.
Maxiprest, accordingly, undertakes:
(1)
To refrain from engaging in any conduct which contravenes
section
4(1
)(b) of the Act in the future;
(2)
To develop and implement a compliance programme which incorporates
corporate governance, designecMo ensure that all its relevant
employees are aware of the provisions of the
Competition Act and
do
not contravene them; and
(3)
to submit a copy of the aforementioned compliance programme to the
Commission within 90 days of the date of confirmation of
this
Settlement Agreement as an order of the Tribunal.
6.3.
in order to reach resolution of this,Complaint but without any
admission of liability, Bridgestone undertakes to supply ATT
on the
same basis as any other independent dealer, subject to Bridgestone's
reasonable commercial terms and conditions of sale
which include its
credit control processes.
7
Administrative penalty
7.1.
Maxiprest accepts that it is liable to pay an administrative penalty
in terms of
sections 58(1
)(a)(iii) and 59
of
the
Act in the amount
of
R 9 355 970.39.
The
administrative penalty represents 6.5% of Maxiprest's annual
turnover for the sale of TBR/S and retreaded tyre sales in Gauteng
for
the
financial year ended 31 December 2010.
7.2.
Maxiprest will pay the administrative penalty to the Commission
within 60 days of the confirmation of this Consent Agreement
as an
order of the
Tribunal.
7.3.
Maxiprest shall remit payment of the administrative penalty into the
following bank account:
Name
of account holder: COMPETITION COMMISSION ABSA
Bank
name: ABSA BANK PRETORIA
Account
number: 4050778576
Branch
code: 23345
The
penalty will be paid over by the Commission to the National Revenue
Fund in accordance with the provisions of
section 59(4)
of the Act.
Full
and final settlement
This
Agreement, upon confirmation as an order of the Tribunal, concludes
the proceedings between the Commission, Bridgestone and
Maxiprest in
relation to the Commission's investigation against both Maxiprest
and Bridgestone, arising from the complaint and
leniency application
by ATT, and that is the subject of the Commission's investigation
and complaint referral under the Commission's
case number
2007SEP3213 and the Tribunal's case number 92/CR/DEC09.
SIGNED
at
ISANDO on this the 2
nd
day of MAY 2012
H
MATSUZAKI
Duly
authorised signatory of Maxiprest Tyres (Pty) Ltd
SIGNED
at
ISANDO on this the 2
nd
day
of MAY 2012
M
J HALFORTY
Duly
authorized signatory of Bridgestone South Africa (Pty) Ltd
SIGNED
at
PRETORIA on this the 4
th
day
of MAY 2012
Shan
Ramfouruth
Commissioner:
Competition Commission