TRIBUNAL CONFIRMS SETTLEMENT IN PANEL BEATING CARTEL CASE,
ACCUSED COMPANY AGREES TO PAY R750K FINE
In a long-running panel beating cartel case, the Tribunal has confirmed a settlement agreement between the Competition Commission (the Commission) and one of the companies accused of involvement in the cartel, Life Wise (Pty) Ltd trading as Eldan Auto Body (Eldan Auto).
Eldan Auto is accused by the Commission of allegedly contravening sections 4(1)(b)(i), (ii) and (iii) of the Competition Act (the Act) i.e. price fixing, dividing markets and collusive tendering.
Consent agreement
Eldan Auto admits that it engaged in conduct in contravention of sections 4(1)(b)(i), (ii) and (iii) of the Act. In terms of the consent agreement, Eldan Auto agrees to:
- pay an administrative penalty (a fine) of R750 000 (seven hundred and fifty thousand Rand);
- cooperate with the Commission in relation to the prosecution of the complaint i.e. testify in the matter and provide evidence to the Commission;
- desist from the prohibited conduct as described in the consent agreement; and
- develop, implement and monitor a competition law compliance programme incorporating corporate governance to ensure that its employees, management, directors and agents do not engage in future contraventions of the Act.
BACKGROUND
In June 2014, the Commission launched an investigation into Eldan Auto and Precision and Sons (Pty) Ltd (Precision) for alleged price fixing, market division and collusive tendering in the provision of auto body repair services in Pretoria.
The Commission’s investigation found that Eldan Auto and Precision had discussed and agreed to exchange cover quotes from 2011 – and that they had coordinated their collusive arrangement through the Vehicle Accident Assessment Centre (VAAC) which renders vehicle assessment services to their customers. The Commission found that communication happened directly between employees of the two firms or through VAAC where some vehicles for repair were sometimes assessed.
The investigation also revealed that the two firms held meetings and discussions on how to collaborate when providing quotes to clients. They also discussed prices to be charged for auto body repair services including panel beating and spray painting. Employees also regularly emailed each other to request cover quotes from each other.
The Commission furthermore found that Eldan Auto and Precision are two of only three certified Mercedes Benz auto body repairers located in Pretoria.
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