Competition Commission and Another v Netstar (Pty) Ltd and Others (17/CR/Mar05) [2010] ZACT 29; [2010] 1 CPLR 1 (CT) (19 April 2010)

Competition Commission and Another v Netstar (Pty) Ltd and Others (17/CR/Mar05) [2010] ZACT 29; [2010] 1 CPLR 1 (CT) (19 April 2010)

The Tribunal found that the SVR respondents, representing over 90% of the market, collectively set and enforced performance standards for admission to VESA's SVR category that operated as exclusionary barriers to entry. These standards were not consumer-driven but were designed and implemented by competitors to protect their market positions and prevent effective competition from new entrants. The standards were unreasonable, self-serving, and denied consumers the benefits of lower prices, greater choice, and technological innovation. VESA, as an association of firms, facilitated and implemented these standards and is therefore also liable. The exclusionary effect persisted from 1...

Citation
[2010] ZACT 29
Parties
Applicant: Competition Commission; Applicant: Tracetec (Pty) Ltd; Respondent: Netstar (Pty) Ltd; Respondent: Matrix Vehicle Tracking (Pty) Ltd; Respondent: Tracker Network (Pty) Ltd; Respondent: Vehicle Security Association of South Africa
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
19 April 2010
Case Number
17/CR/Mar05
Procedural Posture
Civil Judgment / Final Judgment After Full Hearing
Outcome
All four respondents found to have contravened section 4(1)(a) of the Competition Act. Respondents are jointly and severally liable for the costs of Tracetec, including the costs of two counsel.
Judges
Norman Manoim, Yasmin Carrim, Lawrence Reyburn
Legal Topics
Horizontal Agreements, Standard Setting, Barriers to Entry, Exclusionary Conduct, Association Liability, Performance Criteria
Competition Law Commercial and Corporate Horizontal Agreements Standard Setting Barriers to Entry Exclusionary Conduct Association Liability Performance Criteria

Case Brief

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Parties

Competition Commission

Applicant

Tracetec (Pty) Ltd

Applicant

Netstar (Pty) Ltd

Respondent

Matrix Vehicle Tracking (Pty) Ltd

Respondent

Tracker Network (Pty) Ltd

Respondent

Vehicle Security Association of South Africa

Respondent

Procedural Posture

Civil Judgment / Final Judgment After Full Hearing

Legal Issues

  1. 1 Did the performance standards set by the SVR respondents and VESA constitute a prohibited restrictive horizontal practice under section 4(1)(a) of the Competition Act?
  2. 2 Did the standards substantially prevent or lessen competition in the SVR market by excluding competitors?
  3. 3 Was VESA, as an association of firms, liable for the anti-competitive effects of the standards?

Ratio Decidendi

The Tribunal found that the SVR respondents, representing over 90% of the market, collectively set and enforced performance standards for admission to VESA's SVR category that operated as exclusionary barriers to entry. These standards were not consumer-driven but were designed and implemented by competitors to protect their market positions and prevent effective competition from new entrants. The standards were unreasonable, self-serving, and denied consumers the benefits of lower prices, greater choice, and technological innovation. VESA, as an association of firms, facilitated and implemented these standards and is therefore also liable. The exclusionary effect persisted from 1...

Court Disposition

All four respondents found to have contravened section 4(1)(a) of the Competition Act. Respondents are jointly and severally liable for the costs of Tracetec, including the costs of two counsel.

Orders

  • The actions of the first, second and third respondents in concluding an agreement and/or engaging in a concerted practice to set and implement exclusionary performance standards for SVR membership from September 1999 to August 2003 are declared to contravene section 4(1)(a) of the Act.
  • The decision of the fourth respondent, VESA, as an association of firms, to set and implement exclusionary performance standards for SVR membership from September 1999 to August 2003 is declared to contravene section 4(1)(a) of the Act.