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[2012] ZACT 38
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Competition Commission v Singapore Airlines Ltd (45/CR/Apr12) [2012] ZACT 38; [2012] 2 CPLR 245 (CT) (15 May 2012)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: 45/CR/Apr12 014977
In
the matter between:
The
Competition Commission
…..........................................................................................................
Applicant
And
Singapore
Airlines Ltd
…..................................................................................................................
Respondent
Panel
:
N Manoim (Presiding Member), Y Carrim (Tribunal Member) and A Wessels
(Tribunal Member)
Heard
on: 15 May 2012
Decided
on: 15 May 2012
Order
The
Tribunal hereby confirms the order as agreed to and proposed by the
Competition Commission and the respondent, annexed hereto
marked
"A".
Presiding
Member
N
Manoim
Concurring:
Y
Carrim and A Wessels
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA (HELD IN PRETORIA)
CT
Case No:
CC
Case No: 2008Jan3474
In
the matter between:
THE
COMPETITION COMMISSION
…......................................................................................
Ap
plicant
And
SOUTH
AFRICAN AIRWAYS LIMITED (PROPRIETARY) LIMITED
…................
First
Respondent
SINGAPORE
AIRLINES LIMITED
…..........................................................................
Second
Respondent
MALAYSIAN
AIRLINES
….............................................................................................
Third
Respondent
FILING
SHEET
DOCUMENT
FILED:
1.
SETTLEMENT AGREEMENT BETWEEN COMPETITION COMMISSION AND SINGAPORE
AIRLINES
DATED
at
PRETORIA
on
this 19
th
Day
of April 2012.
Competition
Commission
1
st
Floor,
Mulayo, the Dti Campus, 77 Melntjies Street, Sunnyside, Pretoria
Tel:
012 394 3281
Fax:
012 394 4281
E-mail:
K
hotsoM(g>compcom.co.za
Ref:
Khotso Modise
TO:
THE
REGISTRAR OF
THE
COMPETITION TRIBUNAL
3
rd
Floor,
Mulayo
(Block
C)
The
Dti Campus
77
Meintjies
Street
Sunnyside
Pretoria
|
Tel:
012 394 3355 Fax: 012 394 0169
E
-mail:
Leratom(5>,comptrib.co.za/
ctsa@comptrib.co.za
AND
TO: Norton Rose South Africa
Attorneys
for the Second Respondent
15
Alice Lane Sandton Johannesburg 2196
T:
011 685 8941 F: 011 301 3200
E-mail:
rosalind.lake@nortonrQse.com
rosalind.lake@nortonrQse.com
Ref:
Rosalind Lake
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
HELD
AT PRETORIA
CT
Case No:
CC
Case No. 2008Jan3474
In
the matter between:
THE
COMPETITION COMMISSION
….........................................................
Applicant
and
SOUTH
AFRICAN AIRWAYS (PROPRIETARY) LIMITED
…......................
First
Respondent
SINGAPORE
AIRLINES LIMITED
…................................................
Second
Respondent
MALAYSIAN
AIRLINES
…..............................................................
Third
Respondent
AGREEMENT
BETWEEN THE COMPETITION COMMISSION AND SINGAPORE AIRLINES ON THE
TERMS OF AN APPROPRIATE ORDER IN TERMS OF
SECTION 49D
OF THE
COMPETITION ACT NO. 89 OF 1998
, AS AMENDED
The
Commission
and
Singapore
Airlines
hereby
agree that application be made to the
Tribunal
to
have
this
Agreement
confirmed
as a consent order as provided for in terms of
section 58(1
)(b) as
read with
section 49D
of the
Act.
1
.
Definitions
1.1.
For
the purposes of this agreement the following definitions shall
apply:
1.1.1.
"Act*
means
the
Competition Act No. 89 of 1998
, as amended.
1.1.2.
"this
Agreement"
means
the agreement set out herein, duly signed by the
Commissioner
and
Singapore
Airlines.
1.1.3.
"Singapore Airlines"
means
Singapore Airlines Limited, a company incorporated in accordance
with the laws of Singapore with its registered South African
office
at 257 Oxford Road, lllovo, Johannesburg
1.1.4.
"CLP"
means
the Commission's Corporate Leniency Policy.
1.1.5.
"Commission"
means
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 1
st
Floor,
Mulayo Building (Block C), the DTI Campus, 77 Meintjies Street,
Sunnyside, Pretoria, Gauteng.
1.1.6.
"Commissioner"
means
the Competition Commissioner of South Africa, the Chief Executive
Officer of the
Commission
appointed
by the Minister of Trade and Industry in terms of
section 22
of the
Act.
1.1.7.
"Tribunal"
means
the Competition Tribunal of South Africa, a statutory body
established in terms of
section 26
of the
Act.
1.1.8.
"Complaint"
means
the complaint initiated by the
Commissioner
under
case number 2008Jan3474 in relation to a possible contravention of
section 4(1)(b)(i)of
theAcf.
1.1.9.
"the Republic"
means
the Republic of South Africa.
2.
Background
2.1.
On the 16 January 2008 the
Commissioner
initiated
a complaint against SAA,
Singapore
Airlines
and
Malaysian Airlines for their involvement with Cathay Pacific in a
cartel to fix air fare increases on both economy and business
class
flights into and out of South Africa to the Far East Asia.
2.2.
The
Commission
has
concluded its investigation and a decision has been taken that the
matter be referred to the
Tribunal
for
adjudication.
2.3.
Singapore
Airlines
has
engaged the
Commission
in
settlement negotiations which have culminated in this settlement
agreement.
3.
Commission's
findings
Upon
completion of its investigation into the
Complaint,
the
Commission
found
that local representatives of
Singapore
Airlines
in
South Africa had engaged in the following conduct:
3.1.
Engaged in discussions regarding air fare rates or prices in South
Africa with Cathay Pacific, Malaysian Airlines and South
African
Airways on occasions during 2004, 2005 and ending February 2006.
3.2.
The discussions related to market fare levels and increases on
certain market fares for flights out of South Africa to South
East
Asia, Hong Kong and China.
3.3.
Local representatives of
Singapore
Airlines
in
South Africa relied on the content of these discussions among other
considerations to determine fares and gain knowledge on
competitor
activities and price movements in the above stated routes.
3.4.
This conduct is in contravention of
section 4(1
)(b)(i) of the
Act.
4.
Admission
of Liability
Local
representatives of the Respondent engaged in market fare discussions
which the Respondent admits contravened
section 4(1)(b)(i)
of the
Act,
as
set out in the
Commission's
Findings
in paragraph 3 above.
5.
Agreement
concerning future conduct
5.1.
Singapore
Airlines
has
cooperated with the
Commission
in
its investigation of the matter and has provided information that
significantly assisted the
Commission
in
concluding its investigation.
Singapore
Airlines
has
also undertaken to provide the
Commission
with
witnesses, evidence and assist in the referral proceedings against
other respondents that the
Commission
elects
to prosecute.
5.2.
The conduct that is the subject of this investigation has ceased and
Singapore
Airlines
undertakes
that it will in future refrain from engaging in conduct which may
contravene
section 4(1
)(b)(i) of the
Act
5.3.
Singapore Airlines
already
has a competition (aw compliance programme in place that dates from
late 2005 / early 2006, and which it is in the process
of reviewing.
Singapore undertakes to ensure that this compliance programme
incorporates corporate governance which is designed
to ensure that
all employees, managers and directors of
Singapore
Airlines
do
not engage in any contraventions of the
Act
and
in particular
section 4{1)(b}(i)
of the
Act.
5.4.
Singapore Airlines
undertakes
to deliver a copy of this compliance programme to the
Commission
within
a period of 60 days after this settlement agreement with the
Commission
is
confirmed by the
Tribunal.
6,
Administrative penalty
6.1.
In terms of
section 58(1)(a)(iii)
of the
Act
read
with
section 59(1
)(a), 59(2) and (3) of the
Act,
and
in order to settle the matter
Singapore
Airlines
agrees
to pay an administrative penalty in the amount of R25 106 692-00
(Twenty-Five Million One Hundred and Six Thousand, Six
Hundred and
Ninety-Two Rand).
6.2.
The above amount is equivalent to 7.56 % of
Singapore
Airlines'
passenger
turnover out of South Africa during the financial year 2009/2010 and
does not exceed 10% of
Singapore
Airlines'
annual
turnover out of South Africa in the same year.
6.3.
Singapore Airlines
will
pay the amount set out in paragraph 6.1 above to the
Commission
within
30 calendar days from the date of confirmation of this
Agreement
by
the
Tribunal.
6.4.
The penalty amount is to be paid into the bank account of the
Commission.
The
Commission's
banking
details are as follows:
Bank:
ABSA Bank
Name
of Account: The Competition Commission Fees
Branch
Name: Pretoria
Branch
Code: 323345
Account
Number: 4050778576
6.5.
The
Commission
will
pay the penalty amount into the National Revenue Fund in compliance
with section 59(4) of the
Act
7.
Full and final settlement
This
Agreement
is
entered into in
full
and
final settlement and upon confirmation thereof as a consent order by
the
Tribunal
concludes
all
proceedings
between the
Commission
and
Singapore
Airlines
relating
to Singapore's involvement in the conduct that is the subject of the
Commission's investigation under case number: 2008Jan3474.
Dated
and signed at ILLOVO on this the 12 day of MARCH 2012
Signature
Name:
Capacity:
FOR
THE COMMISSION
Dated
and signed at PRETORIA on this the 15 day of MARCH 2012
Shan
Ramburuth
Commissioner
Competition
Commission of South Afica