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[2015] ZACT 44
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Competition Commission v Mailot Jaune Trading (Pty) Ltd (CR049Jul12/SA115Nov14 (019869)) [2015] ZACT 44; [2015] 1 CPLR 174 (CT) (29 April 2015)
COMPETITION
TRIBUNAL
REPUBLIC OF SOUTH
AFRICA
Case No:
CR049Jul12/SA115Nov14 (019869)
In the matter
between:
The Competition
Commission
......................................................................................................
Applicant
And
Mailot Jaune Trading
(Pty)
Ltd
.................................................................................................
Respondent
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 Mailot Jaune Trading
(Pty) Ltd, annexed
hereto marked “A”.
29
April 2015
Date
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
CCCASE NO.
2011JUL0155
In the matter
between:
THE COMPETITION
COMMISSION
...........................................................................................
Applicant
and
MAILOT JAUNE
TRADING (PTY)
LTD
..................................................................................
Respondent
In re:
COMPETITION
COMMISSION
....................................................................................................
Applicant
and
FRITZ PIENAAR
CYCLES (PTY) LTD AND 13
OTHERS
..................................................
Respondents
SETTLEMENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AND MAILOT JAUNE TRADING
(PTY) LTD (“MAILOT JAUNE”) IN REGARD
TO ALLEGED
CONTRAVENTION OF SECTION
4(i)(b)(i)
OF
THE
COMPETITION ACT 89 OF 1998
, AS AMENDED.
The
Commission
and
Mailot Jaune 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
“
Commissioner
”
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
“
Mailot Jaune
”
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, Hotline Centre, 41 Bullion Boulevard, Richards
Bay, Kwazulu Natal;
1.6
“
Parties
”
means
the Commission and Maifot Jaune;
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 f
FPC”), Melody Street 18 (Pty) Ltd (“Melody”),
Moneymine 88 CC trading as Hotspot Cycles ("Hotspof),
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"), Mailot Jaune Trading
(Pty) Ltd (“Mailot Jaune”), Indirect SA (Pty) Ltd
(“Bicidetta*), Le Peloton (Pty) Ltd fLe Peloton”), DBS
Distributing CC trading as Thule Car Rack Systems ("Thule”),
Pedaling Dynamics CC trading as Dunkeid Cycles (“Dunkeld”),
Summit Cycles ("Summit”), Dynamic Choices Two CC trading
as Bester Cycles (“Bester”), Johnson Cycle Works
CC
(“Johnson”), and New Just Fun Group (Pty) Ltd (“New
Just Fun”).
1.8
“
Settlement Agreement”
means
this settlement agreement duly signed and concluded between the
Commission and Mailot Jaune; and
1.9
“
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
r
Mulayo Building, the DTI Campus, 77 Merntjies Street Sunnyside,
Pretoria, South Africa,
2.
THE COIMISSION’S
ÍNVESTÍGAXIOMS 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
(ihe 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
SI
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 its amended notice of motion and supplementary
referral affidavit
2.6 Pursuant
thereto, the Commission withdrew the first referral on 10 June 2011
against ail respondents named in the first referral,
2.7 On 18 July 2011,
the Commissioner then initiated a fresh complaint under CC Case
Number: 2011 Ju!0155, info 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 Mailot
Jaune 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 Mailot Jaune
admits that its conduct amounts to a contravention of section
4(1)(b)(i) of the Act.
4.2
.
Future Conduct
4.2.1 Mailot Jaune
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, Mailot Jaune
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 Mailot Jaune'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 Mailot Jaune
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 Mailot Jaune
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
Mailot
Jaune will ensure that such training materials will be made available
to all new employees joining Mailot Jaune,
4.2.5 Furthermore,
Mailot Jaune 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 ali proceedings
between the Commission
and Mailot Jaune 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
Pretoria on this the 17
th
day of October 2014
For Mailot Jaune
Bennie Reynders
Legal representative
duly authorised to sign on behalf of Mailot Jaune Trading (Pty) Ltd
Dated and signed at
Pretoria on this the 28
th
day of October 2014
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~maif:CCSA@compcom.co.za
.”
Dated and signed on
this the 17
th
day of October 2014
For the
Commission
Competition
Commissioner
For:
Mailot
Jaune
Bennie Reynders
Legal representative
duly authorised to sign on behalf of Mailot Jaune Trading (Pty) Ltd