TRIBUNAL CONFIRMS SETTLEMENT AGREEMNT IN WHICH FURNITURE REMOVAL COMPANY ADMITS TO CARTEL INVOLVEMENT, AGREES TO PAY A PENALTY

A furniture removal company which services government departments, large corporates and the public has admitted to involvement in a furniture removal cartel in 28 instances of cover pricing, a form of collusion, in the provision of furniture removal services from around 2007 to at least 2012.

Cover pricing is a practice whereby one or more firms agree that they will submit tenders in such a way that a designated winner will submit the lowest or most favourable bid and the other(s) will submit artificially high bids that are not intended to win the contract.

The 28 instances involved, among others, tenders issued by: the Department of Water Affairs and Forestry; Eskom; the South African Police Service; the Department of Health; and the South African National Defence Force.

Afriworld 142 (Pty) Ltd (“Afriworld”) agrees to pay an administrative penalty of R188 936, in addition to admitting liability in respect of the conduct in contravention of sections 4(1)(b)(i), (ii) and (iii) of the Competition Act (“the Act”).

This forms part of the terms of a settlement agreement concluded between the Competition Commission (“the Commission”) and Afriworld, which has been confirmed as an order of the Tribunal.

Afriworld also agrees that it will not contravene the Act in future, while it will continue to implement and monitor its existing competition law compliance programme. Furthermore, it agrees to prepare and circulate a statement (summarising the contents of the settlement agreement) to its employees, managers and directors.

Background

In November 2010, the Commission launched an investigation into alleged collusive conduct in the market for the provision of furniture removal services. In June 2011, it included Afriworld in its probe.

The investigation revealed that furniture removal companies, including Afriworld, concluded agreements and engaged in concerted practices to tender collusively in the provision of furniture removal services to government departments, big corporates and private individuals. The collusion appeared to have started around 2007 to at least 2012.

The Commission found that Afriworld, Sifikile Transport CC, Matthee Furniture Removals CC and JH Retief Transport CC had bilateral arrangements and colluded in respect of 28 instances of cover pricing. It concluded that the conduct amounted to price fixing and/or the fixing of trading conditions in contravention of the Act.

Issued by:

Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
Twitter: @comptrib