About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Competition Tribunal
SAFLII
>>
Databases
>>
South Africa: Competition Tribunal
>>
2013
>>
[2013] ZACT 37
|
|
Competition Commission v Pedaling Dynamics CC t/a Dunkeld Cycles (73/CR/Jul12) [2013] ZACT 37 (30 May 2013)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: 73/CR/Jul12 016352
In
the matter between:
The
Competition Commission
..............................................................................................
Applicant
and
Pedaling
Dynamics CC t/a Dunkeld Cycles
....................................................................
Respondent
Panel:
N Manoim (Presiding Member), M Mokuena (Tribunal Member) and I
Valodia (Tribunal Member)
Heard
on: 29 May 2013
Decided
on: 30 May 2013
Order
The
Tribunal hereby confirms the following attached consent agreements,
as agreed to and proposed by the Competition Commission
and the
Respondent:
1.
The main agreement, dated 12 March 2013.
2.
Annexure A thereto, dated 29 May 2013.
Presiding
Member
N
Manoim
Concurring:
M Mokuena and I Valodia
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
HELD
IN PRETORlA
CASE
NO. T3/CR/JUL12
CC
CASE NO. 2011JUL0155
In
the matter between:
THE
COMPETITION COMMISSION
And
PEDALING
DYNAMICS CC t/a DUNKELD CYCLES
..........................................................
Respondent
In
re:
COMPETITION
COMMISSION
.................................................................................................
Applicant
and
FRITZ
PIENAAR CYCLES (PTY) LTD AND 19 OTHERS
.................................................
Respondents
SETTLEMENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AND PEDALING DYMANICS
CC t/a DUNKELD CYCLES (“DUNKELD”) IN
REGARD TO ALLEGED
CONTRAVENTION OF
SECTION 4{1)(b)(i)
OF THE
COMPETITION ACT 89 OF
1998
, AS AMENDED.
The
Commission
and Dunkeld hereby agree that application be made to the Tribunal
for the confirmation of this Settlement Agreement as an order
of the
Tribunal in terms of
section 49D
as read with
section 58
(1)(b) and
59
(1 )(a) of the Act on the terms set out below.
1.
DEFINITIONS
For
the purposes of this Settlement Agreement the following definitions
shall apply;
1.1.
“
Act"
means the Competition Act, 1998 (Act No. 89 of 1998), as amended;
1.2.
"
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 Building C, Mulayo Building, the DTI Campus, 77
Meintjies Street, Sunnyside, Pretoria, South
Africa;
1.3.
"
Commissioned"
means
the Commissioner of the Competition Commission appointed in terms of
section 22 of the Act;
1.4.
“
Complaint
means
the complaint initiated by the Commissioner of the Competition
Commission in terms of section 49B of the Act under case
number:
2011Jul0155;
1.5.
“
Settlement
Agreement”
means
this settlement agreement duly signed and concluded between the
Commission and Dunkeld;
1.6.
“
Dunkeld"
means Pedaling Dynamics CC, a close corporation duly registered in
accordance with the laws of the Republic of South Africa,
with its
main place of business at Dunkefd West Shopping Centre, Cnr Jan
Smuts Avenue and Bompas Road, Dunkeid West, Gauteng.
1.
7.
“Parties”
means the
Commission and Dunkeid;
1.8.
"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, Muiayo Building, the DTI Campus, 77
Meintjies Street, Sunnyside, Pretoria, South Africa.
1.9.
“
Respondents”)
means all the firms that are cited as the respondents in the
Commission’s complaint referral filed under Competition
Tribunal Case number: 73/CR/JUL12 respectively, namely: Fritz
Pienaar Cycles
(Pty) Ltd (°FPC”)r
Melody Street 18 (Pty) Ltd (“Melody”), Moneymine 88 CC
trading as Hotspot Cycles (“Hotspot"),
Pedal-On-Marketing
CC trading as Maverick Cycles (“Maverick”), Salojee's
Cycles CC (“Salojee’s”),
West Rand Cycles CC
(“West Rand Cycles”), Bowman Cycles (Pty) Ltd
(“Bowman”), Albatros Fishing &
Cycling, previously
named Winners Cycles (Pty) Ltd (“Albatros”), Omnico
(Pty) Ltd ("Omnico”), Cytek Cycle
Distributors CC
(“Cytek”), Coolheat Cycle Agencies (Pty) Ltd
(“Coolheat”), Maillot Jaune Trading (Pty)
Ltd (“Maillot
Jaune”), Tridirect SA (Pty) Ltd (‘Bidcietfca”), Le
Peioton (Pty) Ltd (Te Peloton*), DBS
Distributing CC trading as
Thule Car Rack Systems (“Thule”), Pedaling Dynamics CC
trading as Dunkeld Cycles (“Dunkekf),
Summit Cycles
(“Summit"), Dynamic Choices Two CC trading as Bester
Cycles (“Bester"), Johnson Cycle Works
CC (“Johnson”),
and New Just Fun.
2.
THE COMMISSION’S INVESTIGATIONS AND FINDINGS
2.1.
In September 2008, the Commission received information from
anonymous source regarding the meetings which allegedly took
place
in Cape Town and Gauteng between various cycling retailers and
wholesalers. The Commission was also provided with minutes
of one
such meeting. These minutes were afso posted on the Hub Website, a
web based forum for cycling enthusiasts in the cyding
industry. The
minutes provided to the Commission were of a meeting which
occurred
on 10 September 2008 (“the September 2008 meeting") in
Midrand.
2.2.
As reflected in this minutes, the following key issues were
discussed:
2.2.1.
Increasing gross margins by increasing mark-ups for cyding
accessories from 50% to 75%, and for bicycles from 35% to 50%;
2.2.2.
A proposed time for the price increase (as from the 1st October
2008);
2.2.3.
Getting rid of discounting and of shops undercutting each other;
2.2.4.
Getting wholesalers to provide higher recommended retail prices
CRRPs") to the retailers and advertise these prices
to the
public.
2.3.
Based on this information, the Commission initiated a complaint in
terms of section 49B of the Act on 5 March 2009 against
FPC and
Cycle Lab (now Melody) under CC Case Number: 2009Mar4326, The
representatives of these firms were identified as having
been the
instigators behind the September 20G8 meeting* Both the firms
against whom the complaint was first initiated are cycling
retailers.
2.4.
The Commission later obtained further Information implicating other
firms and the Commissioner amended the first Initiation
to include
other respondents on 12 May 2009.
2.5.
Following an investigation, the Commission referred the complaint to
the Tribunal on 25 June 2010 against 28 respondents
who were both
cycling retailers and wholesalers, including all of the respondents
identified in the amended initiation. On 12
November 2010, the
Commission filed amended notice of motion and supplementary referral
affidavit.
2.6.
Pursuant thereto, the Commission withdrew the first referral on 10
June 2011 against all respondents named in the first referral.
2.7.
On 18 July 2011, the Commissioner then initiated a fresh complaint
under CC Case Number: 2011 Jul0155f into the allegations
concerning
primarily the September 2008 meeting and received additional
information from certain respondents pursuant to the
investigation
of this complaint.
3.
THE COMMISSION'S REFERRAL
3.1.
Following its investigation, the Commission concluded that the
conduct by Dunkeid together with other respondents constituted
a
contravention of section 4(1 )(b)(i) of the Act, in that they
agreed, alternatively engaged in a concerted practice to directly
or
indirectly fix prices or other trading conditions. This includes
both the retailers and wholesalers present at the September
2008
meeting since they are in the same line of business in respect of
the sale of bicycles and cycling accessories and equipment
at the
wholesale and retail levels respectively.
3.2.
In light of its findings, the Commission decided to refer the
complaint on 5 July 2012 to the Tribunal for determination.
4.
AGREEMENTS
4.1.
Admissions
4.1.1.
Dunkeid admits that it has contravened section 4(1)(b)(i) of the
Act.
4.2.
Future Conduct
4.2.1.
Dunkeld agrees to fully cooperate with the Commission in relation to
the prosecution of any other respondents who are the
subject of its
investigations and referral to the Tribunal. Without limiting the
generality of the foregoing, Dunkeld specifically
agrees to:
4.2.1.1.
Testify before the Tribunal regarding ail such conduct and events
referred to in the Commission’s referral affidavit
and which
are covered by this Settlement Agreement as are within the personal
knowledge of Dunkeld’s members and employees;
and
4.2.1.2.
To the extent that it is in existence, provide evidence, written or
otherwise, which is In Its possession or under its
control,
concerning the alleged contraventions set out in the Commission’s
referral affidavit
4.2.1.3.
Desist from engaging in the conduct complained of.
4.2.2.
Dunkeld agrees that it will in future retrain from participating in
meeting(s) aimed at engaging in a cartel conduct which
may lead to a
possible contravention of section 4(1 )(b) of the Act.
4.2.3.
Dunkeld agrees that its employees, management, directors and agents
will attend a competition law compliance training programme
incorporating corporate governance to be provided by the Commission
and designed to ensure that its employees,, management directors
and
agents do not engage in future contraventions of the
Competition
Act, which
training will be provided at no cost to Dunkefd.
4.2.4.
Dunkeld will ensure that such training materials will be made
available to all new employees joining Dunkeld.
4.2.5.
Furthermore, Dunkeld wiii update and repeat such training materials
annually to ensure on an ongoing basis that its employees,
management, directors and agents do not engage in any future
contraventions of the
Competition Act.
5.
Full
and Final Settlement
This
agreement, upon confirmation as an order by the Tribunal, is entered
into in full and final settlement and concludes all
proceedings
between the commission and Dunkeld relating to any alleged
contravention by the respondents of the Act that is the
subject of
the Commission’s investigation (CC Case no. 201 1Jul0155).
Dated
and signed at
JHB
on this the
4
day of March 2013
For
Dunkeld
Dated
and signed at
Pretoria
on this the
12
day of March 2013
For
the Commission
Competition
Commissioner
ANNEXURE
“A”
The
parties agree that a notice on the terms set out hereunder will be
displayed in a prominent place in their premises for a period
of 6
months from the date of the Competition Tribunal’s order.
"[Name
of a firm] has settled a complaint referral with the Commission and
has undertaken to ensure full compliance with the
provisions of the
Competition Act 89 of 1998
.
For
further information feel free to contact the Commission on telephone
number:
012
394 3200 or E-mail:
CCSA@compcom.co.za
."
Dated
and signed on this the 29th day of May 2013
For
the Commission
Competition
Commissioner
For
Westrsnd Cycles CC