Competition Commission v Oil and More General Trading CC (CO085Aug20) [2020] ZACT 62 (14 August 2020)

Competition Commission v Oil and More General Trading CC (CO085Aug20) [2020] ZACT 62 (14 August 2020)

The Tribunal confirmed the consent agreement between the Competition Commission and Oil and More General Trading CC. The Tribunal found that O&M, as a supplier of nitrile gloves during the national disaster, held market power due to the restricted geographic market and disruptions caused by the lockdown. O&M charged excessive prices for nitrile gloves, resulting in gross profit margins above the fair and reasonable benchmark of 20%, without corresponding cost increases. This conduct constituted a contravention of section 8(1)(a) of the Competition Act, read with Regulation 4 of the Consumer Protection Regulations. O&M admitted the contravention and agreed to immediate remedial actions,...

Citation
[2020] ZACT 62
Parties
Applicant: Competition Commission; Respondent: Oil and More General Trading CC
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
14 August 2020
Case Number
CO085Aug20
Procedural Posture
Consent Order Application / Confirmation of Consent Agreement
Outcome
Consent agreement confirmed as an order of the Tribunal; full and final settlement of all proceedings relating to the alleged contravention.
Judges
Y Carrim, F Tregenna, A Ndoni
Legal Topics
Excessive Pricing, Covid 19 Regulations, Dominance, Gross Profit Margin, Consumer Protection, Settlement Agreement
Competition Law Excessive Pricing Covid 19 Regulations Dominance Gross Profit Margin Consumer Protection Settlement Agreement

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Parties

Competition Commission

Applicant

Oil and More General Trading CC

Respondent

Procedural Posture

Consent Order Application / Confirmation of Consent Agreement

Legal Issues

  1. 1 Whether Oil and More General Trading CC contravened section 8(1)(a) of the Competition Act by charging excessive prices for nitrile gloves during the national disaster period.
  2. 2 Whether the conduct constituted excessive pricing under Regulation 4 of the Consumer and Customer Protection and National Disaster Management Regulations.
  3. 3 What remedial measures and undertakings are appropriate to address the contravention.

Ratio Decidendi

The Tribunal confirmed the consent agreement between the Competition Commission and Oil and More General Trading CC. The Tribunal found that O&M, as a supplier of nitrile gloves during the national disaster, held market power due to the restricted geographic market and disruptions caused by the lockdown. O&M charged excessive prices for nitrile gloves, resulting in gross profit margins above the fair and reasonable benchmark of 20%, without corresponding cost increases. This conduct constituted a contravention of section 8(1)(a) of the Competition Act, read with Regulation 4 of the Consumer Protection Regulations. O&M admitted the contravention and agreed to immediate remedial actions,...

Court Disposition

Consent agreement confirmed as an order of the Tribunal; full and final settlement of all proceedings relating to the alleged contravention.

Orders

  • Oil and More General Trading CC must immediately desist from excessive pricing of nitrile gloves.
  • O&M must reduce its gross profit margin on nitrile gloves to 20% for the duration of the national disaster.