| Summary | Tribunal fines Mittal R691 800 000 and imposes behavioural
remedies The Competition Tribunal released the remedies it
has imposed on Mittal Steel SA after finding on 27 March
2007 that Mittal Steel had contravened the Competition Act
by charging an excessive price for its flat steel products
to the detriment of consumers. It has imposed certain
behavioural remedies aimed at reducing the segmentation that
Mittal SA’s pricing regime has created in the market for
flat steel products. It has also imposed an administrative
penalty of R691 800 000 (six hundred and ninety one million,
eight hundred thousand). The Tribunal said, the “…basis
for (Mittal SA’s) pricing regime was market segmentation
and the limitations that it imposed on arbitrage between the
segmented markets”. “….Macsteel International,
receives flat steel products from Mittal SA at prices
significantly lower than those charged to other steel
merchants. However Macsteel International is contractually
prevented from making this steel available on the domestic
market. Similar conditions are imposed on other domestic
customers who receive discounts off Mittal SA’s domestic
list price. Essentially then these contractual limitations
all come down to measures which prevent customers who
receive steel at prices lower than the pre-selected domestic
list price from on-selling this product to domestic
customers who may be prepared to pay a price higher than the
discounted price but lower than the list price. The Tribunal
said, “price fixing through the manipulation of supply,
…is, without doubt, the most egregious contravention of
competition law and principles”, and this “causes
considerable damage to customers of the affected products
and to the structure and fabric of the economy”. For these
and other reasons set out below the Tribunal has imposed an
administrative penalty... |
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