Competition Commission v West Coast Hardware (Pty) Ltd (CO044Jun20) [2020] ZACT 57 (6 July 2020)

Competition Commission v West Coast Hardware (Pty) Ltd (CO044Jun20) [2020] ZACT 57 (6 July 2020)

The Tribunal confirmed the consent agreement on the basis that West Coast Hardware, during the COVID-19 national disaster, realised gross margins on dust masks FFP1 significantly above the fair and reasonable average, constituting a prima facie contravention of section 8(1)(a) of the Competition Act read with Regulation 4 of the Consumer Protection Regulations. Although West Coast Hardware did not admit liability, it agreed to remedial measures including reducing margins, making a donation to the Solidarity Fund, implementing a compliance programme, and circulating the agreement to staff. The Tribunal found these undertakings sufficient to resolve the complaint and confirmed the agreement...

Citation
[2020] ZACT 57
Parties
Applicant: Competition Commission; Respondent: West Coast Hardware (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
6 July 2020
Case Number
CO044Jun20
Procedural Posture
Consent Order / Confirmation of Consent Agreement
Outcome
Consent agreement confirmed as a final order of the Tribunal, resolving all proceedings between the parties regarding the alleged contravention.
Judges
E Daniels, A Ndoni, F Tregenna
Legal Topics
Excessive Pricing, Covid 19 Regulations, Dominance, Gross Margin Analysis
Competition Law Commercial and Corporate Excessive Pricing Covid 19 Regulations Dominance Gross Margin Analysis

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Parties

Competition Commission

Applicant

West Coast Hardware (Pty) Ltd

Respondent

Procedural Posture

Consent Order / Confirmation of Consent Agreement

Legal Issues

  1. 1 Whether West Coast Hardware contravened section 8(1)(a) of the Competition Act by charging excessive prices for dust masks during the COVID-19 national disaster period.
  2. 2 Whether the gross margin realised on dust masks FFP1 was excessive and unjustified under the Consumer Protection Regulations.
  3. 3 Whether the conduct warrants remedial action and settlement under a consent agreement.

Ratio Decidendi

The Tribunal confirmed the consent agreement on the basis that West Coast Hardware, during the COVID-19 national disaster, realised gross margins on dust masks FFP1 significantly above the fair and reasonable average, constituting a prima facie contravention of section 8(1)(a) of the Competition Act read with Regulation 4 of the Consumer Protection Regulations. Although West Coast Hardware did not admit liability, it agreed to remedial measures including reducing margins, making a donation to the Solidarity Fund, implementing a compliance programme, and circulating the agreement to staff. The Tribunal found these undertakings sufficient to resolve the complaint and confirmed the agreement...

Court Disposition

Consent agreement confirmed as a final order of the Tribunal, resolving all proceedings between the parties regarding the alleged contravention.

Orders

  • West Coast Hardware must immediately desist from the excessive pricing conduct described.
  • West Coast Hardware must reduce its gross margin on dust masks FFP1 to 20% for the duration of the national disaster.