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[2014] ZACT 81
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Competition Commission v Tridirect SA (Pty) Ltd t/a Bicicletta (019471) [2014] ZACT 81 (15 October 2014)
COMPETITION
TRIBUNAL
REPUBLIC OF SOUTH
AFRICA
Case No: 019471
In the matter
between:
The Competition
Commission
..................................................................................
Applicant
and
Tridirect SA
(Pty) Ltd t/a
Bicicletta
....................................................................
Respondent
Panel: Y Carrim
(Presiding Member)
A Roskam
(Tribunal Member)
A Ndoni (Tribunal
Member)
Heard on: 15
October 2014
Decided on : 15
October 2014
Order
The Tribunal hereby
confirms the order as agreed to and proposed by the Competition
Commission and Tridirect SA (Pty) Ltd t/a Bicicletta,
annexed hereto
marked “A”.
15
October 2014
Date
Presiding
Member
Ms Y Carrim
Concurring: Mr A
Roskam and Ms A Ndoni
THE
COMPETITION
TRIBUNAL
OF
SOUTH AFRICA
HELD
IN PRETORIA
CT
CASE NO.
73/CR/JUL12
CC CASE NO.
2011JUL0155
In the matter
between:
THE COMPETITION
COMMISSION
......................................................................................
Applicant
and
TRIDIRECT
SA (PTY) LTD t/a
BICSCLETTA
....................................................................
Respondent
In re:
COMPETITION
COMMISSION
...............................................................................................
Applicant
and
FRITZ PIENAAR
CYCLES (PTY) LTD AND 19
OTHERS
.............................................
Respondents
SETTLEMENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AMD TR5DIRECT SA (PTY)
LTD t/a BICICLETTA (“BIGICLETTA”) IN
REGARD
TO ALLEGED CONTRAVENTION OF
SECTION 4(1)(b)(i)
OF THE
COMPETITION ACT
89 OF 1998
, AS AMENDED.
The
Commission
and
Tridirect SA (Pty) Ltd t/a Bicicletta 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 beiow.
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
“
Bicicletta
”
means
a company duly registered in accordance with the laws of the Republic
of South Africa (Registration Number 2003/019769/07)
with its
registered address at 4 Pieter Road, Highveld Technopark, Centurion,
Gauteng.
1.3
“
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;
1.4
“
Commissioner
”
means
the Commissioner of the Competition Commission appointed in terms of
section 22 of the Act;
1.5
“
Complaint
”
means
the complaint initiated by the Commissioner of the Competition
Commission in terms of section 49B of the Act under case number:
2011
Jul0155;
1.6
“
Settlement
Agreement
”
means
this settlement agreement duly signed and concluded between the
Commission and Bicicletta;
1.7 “
Parties
"
means the Commission and Bicicletta;
1.8
“
Tribunal”
means
the Competition Tribunal of South Africa, a statutory body
established in terms of section 26 of the Act, with its principai
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/JULT2 respectively, namely: Fritz Pienaar Cycles (Pty) Ltd
(“
FPC”),
Meiody Street 18 (Pty) Ltd (“Meiody”), 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) Lid (“Albatros”), Omnico (Pty) Ltd (“Omnico”),
Cytek Cycle Distributors
CC (“Cytek”), Cooiheat Cycle
Agencies (Pty) Ltd (“Cooltiéat”), Maillot Jaune
Trading (Pty) Ltd.
(“Maillot Jaune”), Tridirect SA (Pty)
Ltd (“Bicicletta”), Le Peioton (Pty) Ltd (“Le
Peloton”),
DBS Distributing CC trading as Thule Car Rack
Systems (“Thule”), Pedaling Dynamics CC trading as
Dunkeld Cycles (“Dunkeid”),
Summit Cycles CC (“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 also posted on the Hub Website, a
;
web based
forum for cycling enthusiasts in the cycling 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 cycling 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 1
st
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 (“RRPs")
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
Meiody) under CC Case Number: 2009Mar4326. The representatives of
these firms were identified as having
been the instigators behind the
September 2008 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 respodents
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: 2011Jul0155, 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
Bicicletta 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 Bicicietta
.admits that its conduct amounts to contravention of section 4(1
)(b)(i) of the Act.
4.2. Future
Conduct
4.2.1 Bicicletta
agrees to fuiiy co-operate 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, Bicicletta specifically
agrees to:
4.2.1.1 Testify
before the Tribunal to such conduct and events forming the factual
basis of the Commission’s referral affidavit
and this
Settlement Agreement as are within Bicicietta’s knowledge; 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 Bicicletta
agrees that it will in future refrain from participating in meeting
(s) aimed at engaging in a carte! conduct which
may lead to a
possible contravention of section 4(1)(b) of the Act.
4.2.3 Bicicletta
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.
4.2.4 Bicicietta
will ensure that such, training materials will be made available to
all new employees joining Bicicietta.
4.2.5 Furthermore,
pcicletta will 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 ail proceedings
between the Commission
and Bicicietta relating to any alleged contravention by the
respondents of the Act that is the subject of
the Commission’s
investigation (CC Case no. 2011JUL0155).
Dated and signed at
on this the day of 2014
For Bicicletta
[title]
Dated and signed at
PRETORIA on this the 7
th
day of August 2014
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. ”
For: the
Commission
Competition
Commissioner
For: Tridirect SA
(Pty) Ltd t/a Bicicletta
Represented by