Another Western Cape healthcare products distributor agrees to pay a penalty for alleged cartel conduct
A Western Cape distributor of healthcare products has agreed to pay a penalty of R20 000 for allegedly colluding on a provincial Health Department tender. The tender related to the supply of diagnostic sets to hospitals and health institutions under the Western Cape Department’s control (clinicians use diagnostic sets to examine patients’ eyes, ears, noses and throats).
In terms of a consent agreement, concluded between BMS Medical CC (“BMS Medical”) and the Competition Commission (“the Commission”), BMS Medical also agrees to implement a competition law compliance programme. Furthermore, BMS Medical undertakes to refrain from engaging in any anti-competitive conduct, in contravention of the Competition Act (“the Act”), in future. The consent agreement has been confirmed as an order by the Tribunal.
Although BMS Medical has agreed to the terms of the consent agreement, it does not admit that it contravened the Act, as alleged by the Commission. The Commission, in turn, has agreed to enter into the consent agreement with BMS Medical without an admission of liability, based on, among others, the following factors, read with the remedies contained in the consent agreement:
- BMS Medical is a small firm;
- The tender was small i.e., estimated at R1 000 000 for three years;
- BMS Medical did not actually win the tender in question; and
- BMS Medical is a first-time offender and has not contravened the Act before.
Last month (September 2021), the Tribunal also confirmed a consent agreement between the Commission and M Meyer Surgical Sales CC t/a Intermed (“Intermed”), regarding the same tender.
In September 2019, the Commission received a complaint from the Department of Health Western Cape. It had alleged that competitors, Intermed and BMS Medical, colluded when tendering for the supply of diagnostic sets. There were similarities in the tender documents which led the Department to believe that Intermed and BMS had colluded with each other.
The Commission’s investigation found that around June 2018, Intermed and BMS had indeed assisted each other when completing their tender documents. The Commission concluded that this conduct amounted to collusive tendering in contravention of section 4(1)(b)(iii) of the Act.