Competition Commission v Louw N.O and Others (CR120Aug13/OTH192Dec14) [2015] ZACT 142 (23 July 2015)

Competition Commission v Louw N.O and Others (CR120Aug13/OTH192Dec14) [2015] ZACT 142 (23 July 2015)

The Tribunal found that while market division is a serious contravention, the maximum penalty sought by the Commission was not justified given the mitigating factors presented by Welkom Centre and the lack of empirical evidence of exclusionary effects. The Tribunal accepted the respondents' proposals for alternative remedies, including customer notification and advertising, as more effective in redressing harm than a penalty alone. The penalty was calculated using the six-step methodology, with a 5% base amount and a 90% discount for mitigation. The final penalty for Welkom Centre was R41 127.40 and for Louw's Centre R123 868.75, with 50% of each penalty expunged upon compliance with the...

Citation
[2015] ZACT 142
Parties
Applicant: Competition Commission; Respondent: Sam Louw N.O.; Respondent: Anita Louw N.O.; Respondent: Welkom Key Centre CC
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
23 July 2015
Case Number
CR120Aug13/OTH192Dec14
Procedural Posture
Administrative Penalty Application / Remedies and Penalty Determination After Finding of Contravention
Outcome
Administrative penalties imposed on Welkom Centre and Louw's Centre, subject to reduction upon compliance with alternative remedies; orders issued for advertising and customer notification.
Judges
Norman Manoim, Mondo Mazwai, lmraan Valodia
Legal Topics
Market Division, Administrative Penalty, Remedies for Cartel Conduct, Mitigation of Penalty, Section 4 1 B Contravention
Competition Law Market Division Administrative Penalty Remedies for Cartel Conduct Mitigation of Penalty Section 4 1 B Contravention

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Parties

Competition Commission

Applicant

Sam Louw N.O.

Respondent

Anita Louw N.O.

Respondent

Welkom Key Centre CC

Respondent

Procedural Posture

Administrative Penalty Application / Remedies and Penalty Determination After Finding of Contravention

Legal Issues

  1. 1 What is the appropriate administrative penalty for the respondents' contravention of section 4(1)(b)(ii) of the Competition Act by dividing markets?
  2. 2 Should alternative remedies be imposed in addition to or in lieu of an administrative penalty?
  3. 3 How should mitigating factors affect the quantum of the penalty?

Ratio Decidendi

The Tribunal found that while market division is a serious contravention, the maximum penalty sought by the Commission was not justified given the mitigating factors presented by Welkom Centre and the lack of empirical evidence of exclusionary effects. The Tribunal accepted the respondents' proposals for alternative remedies, including customer notification and advertising, as more effective in redressing harm than a penalty alone. The penalty was calculated using the six-step methodology, with a 5% base amount and a 90% discount for mitigation. The final penalty for Welkom Centre was R41 127.40 and for Louw's Centre R123 868.75, with 50% of each penalty expunged upon compliance with the...

Court Disposition

Administrative penalties imposed on Welkom Centre and Louw's Centre, subject to reduction upon compliance with alternative remedies; orders issued for advertising and customer notification.

Orders

  • Welkom Centre and Louw's Centre must advertise their businesses weekly for six months in the Volksblad newspaper, indicating openness to compete in both regions.
  • Copies of advertisements must be provided monthly to the Commission within seven days of publication, commencing 30 days after the order.