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TRIBUNAL APPROVES 4TH CONSENT AGREEMENT
RELATING TO COVID-19 EXCESSIVE PRICING MATTERS
Distributor of personal protective gear, accused of excessively pricing face masks, agrees to pay R5.9 million settlement
A nationwide supplier of tools, power tools and personal protective gear has agreed to pay a R5.9 million settlement and to donate to the Solidarity Fund, after being accused by the Competition Commission of charging excessive prices for dust face masks.
In a consent agreement with the Commission, Matus admits that it increased its gross profit margins for dust face masks during the period February to March 2020 – however, it does not admit that it contravened any law.
The agreement states: “Matus is entering into this Consent Agreement in order to avoid protracted litigation and nothing in this Consent Agreement should be construed as an admission of liability for a contravention of the Consumer Protection Regulations or section 8(1)(a) of the [Competition] Act read together with Regulation 4 of the Consumer Protection Regulations.”
In terms of the agreement Matus will, among others:
- pay a settlement amount totalling R5 949 542.00 (five million nine hundred and forty-nine thousand five hundred and forty-two rand);
- make a contribution to the Solidarity Fund for COVID-19;
- reduce its gross profit margin on FFP2 dust face masks with immediate effect for the duration of the state of national disaster;
- ensure that the gross profit margins, on essential products it distributes, are not higher than the amount applicable on 16 February 2020; and
- develop, implement and monitor a competition law compliance programme.
Background
On or about 30 March 2020 and 6 April 2020, the Commission says it obtained information against Matus in relation to inflated prices of dust face masks (FFP1 and FFP2 masks) that it was charging its customers in March 2020. The masks fall under the category of ‘medical and hygiene supplies’ in the Consumer Protection Regulations.
The Commission investigated and says it found that Matus’ increase in the gross profit margins of dust masks in March 2020 is a contravention of section 8(1)(a) of the Competition Act read together with Regulation 4 of the Consumer Protection Regulations.
Matus admits that it had increased its gross profit margins for dust face masks but does not admit that it contravened any law.
This is the fourth consent agreement – relating to alleged excessive pricing in the context of COVID-19 – approved as an order of the Tribunal.
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