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[2019] ZACT 34
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Competition Commission v Fireco (Pty) Ltd (CR245Mar171SA237Jan19) [2019] ZACT 34 (6 February 2019)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: CR245Mar171SA237Jan19
In
the matter between:
The
Competition
Commission
Applicant
And
Fireco
(Pty)
Ltd
Respondent
Panel:
N Manoim (Presiding Member)
M
Mazwai (Tribunal Member)
I
Valodia (Tribunal Member)
Heard
on: 06 February 2019
Decided
on: 06 February 2019
Settlement
Agreement
The
Tribunal hereby confirms the settlement agreement as agreed to and
proposed by the Competition Commission and Fireco (Pty) Ltd
annexed
hereto marked "A".
06
February 2019
Date
____________________
Presiding
Member
Mr
Norman Manoim
Concurring:
Ms Mondo Mazwai and Prof. lmraan Valodia
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD
IN PRETORIA)
CT
Case No: CR245MAR17
CC
Case No: 2015MAR0119 &2017Mar0018
In
the matter between:
THE
COMPETITION
COMMISSION Applicant
And
FIRECO
(PTY)
Ltd Respondent
CONSENT
AGREEMENT IN TERMS OF SECTION 49D AS READ WITH SECTIONS 58(1)(a)(iii)
and 58(1)(b) OF THE
COMPETITION ACT 89 OF 1998
, AS AMENDED, BETWEEN
THE COMPETITION COMMISSION AND FIRECO (PTY) LTD, IN RESPECT OF
CONTRAVENTIONS OF
SECTION 4(1)(b)(ii)
OF THE
COMPETITION ACT 19
98.
Preamble
The
Competition Commission and Fireco (Pty) Ltd hereby agree that
application be made to the Competition Tribunal for the confirmation
of this Consent Agreement as an order of the Tribunal in terms of
section 490
read with
section 58(1)(a)(iii)
and
58
(1)(b) of the
Competition Act, No: 89 of 1998
, as amended, in respect of a
contraventions of
section 4(1)(b)(ii)
of the Act, on the terms set
out below.
1.
Definitions
For
the purposes of this Consent Agreement, the following definitions
shall apply:
1.1
"Act"
means the
Competition 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 Mulayo Building
(Block C), the DTI Campus, 77 Meintjies Street, Sunnyside,
Pretoria,
Gauteng;
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 in terms of
section 49B(1)
of the Act under case
numbers 2015Mar0119 and 2017Mar0018;
1.5
"Consent Agreement"
means this·
agreement duly signed and concluded between the Commission and
Fireco;
1.6
"Fireco"
means Fireco (Pty) Ltd, a company
duly Incorporated as such in accordance with the applicable laws of
the Republic of South Africa,
with its principal place of business at
Centennial Place, 1st Floor, East Block, Century Boulevard, Century
City.
1.7
Fireco Gauteng
means Fireco Gauteng (Pty) Ltd, a
company duly incorporated as such in accordance with the applicable
laws of the Republic of South
Africa, with its principal place of
business at Benvista Office Park, Office 20, Edgar Road, Jansen Park,
Boksburg, Gauteng. Fireco
Gauteng has since changed its name to
KRS
Fire (Pty) Ltd;
1.8
"Parties"
means the Commission and Fireco;
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 Mulayo building
(Block C), the DTI Campus, 77 Meintjies Street, Sunnyside,
Pretoria,
Gauteng.
2.
COMMISSION'S INVESTIGATION AND FiNDINGS
2.1
On 13 March 2015, the Commission initiated a complaint against
Afrion Property Services CC, Belfa Fire (Pty) Ltd, Cross Fire
Management
(Pty) Ltd, Fire Protection Systems (Pty) Ltd, Fireco (Pty)
Ltd, Fire Control Systems (Pty) Ltd, QD Air (Pty) Ltd and
Technological
Fire Innovations (Pty) Ltd for allegedly fixing prices,
dividing
markets and tendering collusively in the market for the supply,
installation and maintenance of fire control and protection
systems
under case number: 2015Mar0119.
2.2
On 26 June 2015, the Commissioner amended this complaint
initiation under case number 2015Jun0359 to include Fireco Gauteng
(Pty)
Ltd, QD Fire (Pty) Ltd and Keren Kula Mechanical (Pty) Ltd as
additional respondents. On 29 March 2017, the Commissioner further
amended the complaint initiation, under ease number: 2017Mar0149, to
include Tshwane Fire Sprinklers CC as an additional respondent.
2.3
On 8 March 2017, the Commissioner amended the complaint, under
case number: 2017Mar0018, to include an allegation against Flreco
and
Fireco Gauteng of market division by allocating territories and
customers in the market for the supply,
installation
and maintenance of fire control and protection systems.
2.4
On 29 March 2017, the Commission referred the complaint, to
the Tribunal, under case number CR245MAR17.
2.5
The investigation revealed the following:
2.5.1
During or about the period 2012 to around February 2015,
Fireco and Fireco Gauteng concluded an agreement to divide markets In
the
market for the supply, installation and maintenance of fire
control and protection systems.
2.5.2
In terms of that agreement, Fireco and Fireco Gauteng agreed
to divide markets by allocating customers and territories, and
specific types of services, among themselves; and more particularly
that Fireco would·not offer its services in Gauteng
and
that Fireco Gauteng would not offer its services in the Western
Cape, and Fireco would pass on all special risk work throughout
the country to Fireco Gauteng
2.5.3
In implementation of that agreement both Fireco ang Fireco
Gauteng operated under the name "Fireco", Fireco Gauteng-
presented
itself in the market as a branch of Fireco in Gauteng, and
Fireco presented Itself as the parent company with a head office in
Cape Town.
2.6
This conduct contravened
section 4{1)(b){ii)
of the Act ..
3.
ADMISSION
3.1
Fireco admits that it engaged in prohibited practices- in
contravention of section - - 4(1)(b) (ii) of the Act from or about
September 2012 until no later than February 2015.
4.
FUTURE-CONDUCT
Fireco
agrees to:
4.1
prepare and circulate a statement summarising the contents of
this Consent Agreement to its employees, managers and directors
within
fourteen (14) days of
the
date of confirmation of this
Consent Agreement as an order of the Tribunal;
4.2
refrain from engaging in conduct in contravention of
section 4
(1)(b) of the Act in future;
4.3
develop, implement and monitor a competition law compliance programme
as part of its corporate governance policy, which is.
designed to
ensure that its employees, management, directors and agents do not
engage in future contraventions of the Act. In particular,
such
compliance programme should-include mechanisms for the
identification, prevention, detection and monitoring of any
contravention
of the Act;
4.4
the compliance programme shall be submitted to the Commission within
sixty (60) days of the date of confirmation of this Consent
Agreement
as an order by the Tribunal
4.5
undertakes henceforth to engage in competitive practices.
5.
ADMINISTRATIVE PENALTY
5.1
Fireco agrees and undertakes to pay an administrative penalty in the
amount of R2 200 913.85. This amount represents 3% of Fireco's
affected turnover in the Republic of South Africa for the financial
year ended February 2015.
5.2
Fireco shall pay the abovementioned amount over a period of 24 months
in eight (8) equal quarterly instalments. Fireco may (in
its sole
discretion) choose to settle this amount over a shorter period of
time, or in less than eight (8) equal quarterly instalments.
5.3
The first instalment is payable by no later than 28 February 2019.
The subsequent seven (7) instalments are payable on a quarterly
basis
in equal instalments.
5.4
No interest will be levied upon the administrative penalty for the
first year from the date on which this Consent Agreement
is made an
order of the Tribunal. Thereafter, interest will be levied on the
remaining outstanding balance at the prevailing interest
rate on
debts owing to the State as prescribed by the Minister of Finance in
terms of
section 80(1)(b)
of the
Public Finance Management Act, 1 of
1999
as amended. At the time of the signature of this Consent
Agreement, the applicable interest rate is 10,25%.
5.5
The administrative penalty must be paid into the Commission's
bank account which is as follows:
Name:
The Competition Commission
Bank:
Absa Bank, Pretoria
Account
Number: 4087641778
Branch
Code: 632005
Ref:
2015Mar0119/Fireco
5.6
The administrative penalty will be paid over by the Commission to the
National Revenue Fund in accordance with the provisions
of section
59(4) of the Act.
6.
COMPLIANCE
6.1
All compliance reports and proof of payments relating to this matter
shall be forwarded to the Commission at
CartelSettlements@compcom.co.za
;
7.
FULL AND FINAL SETTLEMENT
7.1
This agreement, upon confirmation as an order of the Tribunal, is
entered into in full and final settlement in respect of the
Commission's investigation under Case No. 2015Mar0019 and
2017Mar0018, and concludes all proceedings between the Commission and
Fireco.
Dated
and signed at
Century City
on the
30
day of
November
2018
For
Fireco (Pty) Ltd
____________________
Name
in Full:
Brian Nicholas Vlok
Position:
CEO
Dated
and signed at
on
the
day
of
2018
For
the
Commission
____________________
Tembinkosi
Bonakele
Commissioner