| Summary | The Competition Tribunal found that vehicle tracking
companies, Netstar, Matrix Vehicle Tracking and Tracker
Network (representing over 90% of the industry) and the
industry association, the Vehicle Security Association of
South Africa (VESA) have contravened the Competition Act by
setting standards which created barriers to entry;
preventing competitors from entering or expanding in the
market and denying consumers the benefit of lower prices,
greater choice and technological development. The Tribunal
found the standards had an exclusionary effect and were
self-serving and irrational. This case has been brought by
both the Competition Commission and the complainant and
intervenor in the matter, a firm called Tracetec. Tracetec
wanted to enter the stolen vehicle recovery (SVR) market
because they believed that a radio transmitter technology
could be successfully applied in the SVR market. However,
based on the standards, Tracetec was prevented from being
admitted to the SVR category. VESA is an industry
association for firms engaged in the vehicle security
industry that at the relevant time had a sub-committee that
set standards for admission to membership of its SVR
category. The Tribunal concluded, based on evidence, that it
was not possible for a firm to expand in the SVR market at
the time without having its product approved by VESA in the
SVR category. This was because all the major short term
insurance companies, represented through their industry
association, would not approve a customer installing a
system that did not have VESA approval. The Tribunal also
noted, in its reasons, that the South African Insurance
Industry Association (SAIA) (representing all the large
insurers and a large part of the rest of the industry) who
had organised VESA to set standards for the industry did... |
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| Keywords | complaint, motor vehicle tracking, stolen vehicle recovery, national, standards, barriers to entry, irrational, industry association, stolen vehicle recovery, section 4(1)(a) |
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