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[2015] ZACT 39
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Competition Commission v Albatros Fishing & Cycling (Sole Proprietorship) Previously named Winners Cycles (Pty) Ltd (CR049Jul12/SA209Feb15 (020800)) [2015] ZACT 39 (29 April 2015)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: CR049Jul12/SA209Feb15 (020800)
DATE:
29 APRIL 2015
In
the matter between:
The
Competition
Commission
..................................................................................................
Applicant
And
Albatros
Fishing & Cycling (Sole
Proprietorship)
..............................................................
Respondent
Previously
named “Winners Cycles (Pty) Ltd”
Panel A
Roskam (Presiding Member)
I
Valodia (Tribunal Member)
A
Ndoni (Tribunal Member)
Heard
on 29 April 2015
Decided
on 29 April 2015
Order
The
Tribunal hereby confirms the consent agreement as agreed to and
proposed by the Competition Commission and Albatros Fishing
and
Cycling Fishing (Sole Proprietorship) previously named “Winners
Cycles (Pty) Ltd”, annexed hereto marked “A”.
29
April 2015
Presiding
member
Mr
A Roskam
Concurring:
Prof. I Valodia and Ms A Ndoni
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
HELD
IN PRETORIA
CT
CASE NO. 73/CR/JUL12
CC
CASE NO. 2011JUL0155
DATE:
29 APRIL 2015
In
the matter between:
THE
COMPETITION
COMMISSION
..................................................................................
Applicant
And
ALBATROS
FISHING & CYCLING (Sole Proprietorship)
Previously
named “WINNERS CCCLES (PT-Y) –
LTD
...................................................
Respondent
In
re:
COMPETITION
COMMISSION
...........................................................................................
Applicant
And
FRITZ
PIENAAR CYCLES (PTY) LTD AND 19
OTHERS
...........................................
Respondents
SETTLEMENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AND ALBATROS FISHING &
CYCLING (“ALBATROS”) IN REGARD TO
ALLEGED CONTRAVENTION
OF SECTION 4(1)(b)(i) OF THE COMPETITION ACT 89 OF 1998, AS AMENDED.
The
Commission and Albatros 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
“Commissionerp 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: 2011JuJ0155;
1.5
“Albatros” means a company duly incorporated with limited
liability in accordance with the laws of the Republic
of South
Africa, with its main place of business at Shop 3, Windsor House,
Margate, KwaZulu-Natal.
1.6
“Parties” means the Commission and Albatros;
1.7
“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”),
Melody
Street 18 (Pty) Ltd (“Melody Street"), 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 (“Bicicfetta”),
Le
Peloton (Pty) Ltd (“Le Peloton”), DBS Distributing CC
trading as Thule Car Rack Systems (“Thule”), Pedaling
Dynamics CC trading as Dunkeld Cycles (“Dunkeld”), Summit
Cycles (“Summit”), Dynamic Choices Two CC trading
as
Bester Cycles (“Bester”), Johnson Cycle Works CC
(“Johnson”), and New Just Fun;
1.8
“Settlement Agreement” means this settlement agreement
duly signed and concluded between the Commission and Albatros;
and
1.9
“Tribunar 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, the
DTI Campus, 77 Meintjies Street, Sunnyside, Pretoria,
South Africa.
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 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
(“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 Melody) 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 Albatros 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
Albatros admits that its conduct amounts to a contravention of
section 4(1)(b)(i) of the Act.
4.2
Future Conduct
4.2.1
Albatros agrees to fully 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, Albatros specifically
agrees to:
4.2.1.1
Testify before the Tribunal regarding the conduct and events forming
the factual basis of the Commission's referral affidavit
and which
are covered by this Settlement Agreementand
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
Albatros agrees that it will in future refrain 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
Albatros 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
Albatros will ensure that such training materials will be made
available to all new employees joining Albatros.
4.2.5
Furthermore, Albatros 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 all proceedings
between the Commission and Albatros relating to any alleged
contravention by the respondents of the Act that is the subject of
the Commission’s investigation (CC Case no. 2011JUL0155).
For
Albatros
John
Cremore
Owner
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.
“
Albatross
Fishing & Cycling 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-maii:CCSA@compcom.co.za.”
Dated
and signed on this the 14 day of December 2014
For
the Commission
Competition
Commissioner
For:
Albatros
Owner