Competition Commission v Tsutsumani Business Enterprises CC (COVCR113Sep20) [2022] ZACT 97 (28 April 2022)

Competition Commission v Tsutsumani Business Enterprises CC (COVCR113Sep20) [2022] ZACT 97 (28 April 2022)

The Tribunal found that Tsutsumani met the financial threshold for dominance and exercised market power during the Covid-19 crisis, as SAPS was a price taker with urgent and large-scale demand for masks. Tsutsumani's mark-up and margin on masks supplied to SAPS were significantly above competitive benchmarks and not justified by any corresponding cost increases. The Tribunal rejected Tsutsumani's cost justifications, including administration, loan interest, retrenchment costs, and tax liabilities, as either unsubstantiated or irrelevant to the excessive pricing analysis. The Tribunal held that the excessive price was to the detriment of SAPS and the public, compounding the financial...

Citation
[2022] ZACT 97
Parties
Applicant: Competition Commission; Respondent: Tsutsumani Business Enterprises CC
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
28 April 2022
Case Number
COVCR113Sep20
Procedural Posture
Excessive Pricing Complaint / Final Judgment
Outcome
Tsutsumani was found to have contravened section 8(1)(a) of the Competition Act, read with Regulation 4 of the Consumer Protection Regulations, and was ordered to pay an administrative penalty.
Judges
M Mazwai, A Wessels, A Ndoni
Legal Topics
Excessive Pricing, Covid 19 Regulations, Dominance, Administrative Penalty, Consumer Protection Regulations
Competition Law Commercial and Corporate Excessive Pricing Covid 19 Regulations Dominance Administrative Penalty Consumer Protection Regulations

Case Brief

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Parties

Competition Commission

Applicant

Tsutsumani Business Enterprises CC

Respondent

Procedural Posture

Excessive Pricing Complaint / Final Judgment

Legal Issues

  1. 1 Whether Tsutsumani was a dominant firm with market power during the complaint period.
  2. 2 Whether the price charged by Tsutsumani for masks was excessive under section 8(1)(a) of the Competition Act and Regulation 4 of the Consumer Protection Regulations.
  3. 3 Whether Tsutsumani's pricing was justified by corresponding cost increases.

Ratio Decidendi

The Tribunal found that Tsutsumani met the financial threshold for dominance and exercised market power during the Covid-19 crisis, as SAPS was a price taker with urgent and large-scale demand for masks. Tsutsumani's mark-up and margin on masks supplied to SAPS were significantly above competitive benchmarks and not justified by any corresponding cost increases. The Tribunal rejected Tsutsumani's cost justifications, including administration, loan interest, retrenchment costs, and tax liabilities, as either unsubstantiated or irrelevant to the excessive pricing analysis. The Tribunal held that the excessive price was to the detriment of SAPS and the public, compounding the financial...

Court Disposition

Tsutsumani was found to have contravened section 8(1)(a) of the Competition Act, read with Regulation 4 of the Consumer Protection Regulations, and was ordered to pay an administrative penalty.

Orders

  • Tsutsumani must pay an administrative penalty of R3 441 689.10 within 30 business days of the order.
  • No interdict is granted as the conduct is not ongoing.