Competition watchdog throws out e-toll price fixing case | Fin24
 
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Competition watchdog throws out e-toll price fixing case

Jan 09 2020 19:17
Lameez Omarjee

The Competition Tribunal has dismissed a case against several furniture removal truck companies for allegedly fixing prices to recover e-toll levies.

The Tribunal on Thursday issued a statement on the case which dates back to a 2017 investigation by the Competition Commission and involves 11 furniture removal companies and the association to which they belong – the Northern Province Professional Movers Association.

The furniture removal companies involved in the matter are Stuttaford Van Lines Gauteng Hub, Pickfords Removals SA, A & B Movers, Brytons Removals, Amazing Transport, Key Moves, Bayley Worldwide, Selection Cartage, Elliot Mobility, Crown Relocations and Magna Thomson.

The Commission alleged that the competing firms had entered into an agreement at a meeting on January 22, 2014, to charge a R350 flat fee to customers, in order to recover e-toll fees. 

The firms do not dispute that a discussion on e-tolls was held, but they deny that an agreement was reached to charge a uniform fee or to pass on the costs of e-tolls to consumers.

The Tribunal noted that the Commission was not wrong in its submission that the meeting was there to achieve an understanding of how to deal with the e-tolls expense. However, the Commission failed to establish "with sufficient certainty" that an agreement was reached on the specified amount of R350.

The Tribunal explained that in legal terms, an understanding is sufficient to constitute an agreement. Based on the minutes of the meeting – respondents were signaling what price levels they might charge consumers. This is sufficient proof that there was an agreement to fix prices, the Tribunal said.

Close but no cigar

However, the meeting took place more than three years prior to the initiation of the Commission's complaint. According to section 67(1) of the Competition Act, "a complaint in respect of a prohibited practice may not be initiated more than three years after the practice has ceased".

"Although the respondents may well have concluded an agreement with regard to the charging of e-tolls at the meeting on 22 January 2014, they cannot be held liable because the agreement was concluded more than three years prior to the initiation of the complaint and the limitation of action provision of section 67(1) applies," the Tribunal said.

"The Commission could have avoided the limitation of action problem, had it established the agreement had not ceased and was in existence within the three-year period after initiation," the order read.

The Tribunal further stated that although there is direct evidence of an agreement, the Commission failed to show there was a causal link between the conclusion of the agreement and "acts of implementation".

The Tribunal noted that some firms had implemented charges to absorb e-toll costs before the meeting, others did not implement any changes to their fees at all, and others implemented changes after the meeting. However, there is no coincidence in time or price which suggests collusion, the Tribunal said. 

"All the respondents in this case have contended that they took pricing decisions independently to one another," the order read. "Even those who only levied an e-toll charge subsequent to the meeting sought to state that decision-makers in the respective firms were not aware of what had been said in the meeting."

The Tribunal said it was plausible that non-collusive e-toll charges were implemented.

Three of the implicated companies had admitted liability and settled with the Commission. The Tribunal approved the settlements - Crown Relocations agreed to pay a fine of R240 647.05, A&B Movers settled and paid a fine of R208 121.90 and Key Moves settled and paid a fine of R438 312.80.

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