Omnico (Pty) Limited and Another v Competition Commission and Others (142/CAC/JUNE 16; 143/CAC/JUNE 16; : CR049 JULY 2012) [2016] ZACAC 4; [2016] 2 CPLR 398 (CAC) (15 December 2016)

Omnico (Pty) Limited and Another v Competition Commission and Others (142/CAC/JUNE 16; 143/CAC/JUNE 16; : CR049 JULY 2012) [2016] ZACAC 4; [2016] 2 CPLR 398 (CAC) (15 December 2016)

The court found that Omnico and Coolheat attended meetings where the collective raising of recommended retail prices was discussed and agreed upon. Their failure to publicly distance themselves from the consensus reached at the September 2008 meeting, combined with subsequent price increases in line with the agreement, constituted participation in a cartel. The court held that passive attendance and silence, in the context of anti-competitive discussions, is sufficient for liability under section 4(1)(b)(i) of the Competition Act. The evidence presented by the Commission was clear, consistent, and convincing, and the appellants did not provide adequate rebuttal. The penalty was...

Citation
[2016] ZACAC 4
Parties
Appellant: Omnico (Pty) Limited; Appellant: Cool Heat Agencies (Pty) Limited; Respondent: Competition Commission; Respondent: Fritz Pienaar Cycles (Pty) Limited; Respondent: Melody Street 18 (Pty) Limited; Respondent: Moneymine 88 CC t/a Hot Spot Cycles; Respondent: Peddle On Marketing (Pty) Limited t/a Maverick Cycles; Respondent: Saloojee's Cycles CC; Respondent: Westrand Cycles CC; Respondent: Bowman Cycles (Pty) Limited; Respondent: Albatros Fishing and Cycling; Respondent: Cytek Cycle Distributors CC; Respondent: Maillot Jaune Trading (Pty) Limited; Respondent: Tridirect SA (Pty) Limited t/a Vicicletta; Respondent: Le Peleton (Pty) Limited; Respondent: DBS Distributing t/a Thule Carrack Systems CC; Respondent: Pedalling Dynamic CC t/a Dunkeld Cycles; Respondent: Summit Cycles; Respondent: Dynamic Choices Two CC t/a Bester Cycles; Respondent: Johnson Cycle Works CC; Respondent: The New Just Fund Group (Pty) Limited
Court
Competition Appeal Court
Jurisdiction
South Africa
Judgment Date
15 December 2016
Case Number
142/CAC/JUNE 16
Procedural Posture
Civil Appeal / Appeal From Competition Tribunal Decision
Outcome
Appeal dismissed except for reduction in penalty imposed on first appellant.
Judges
M Victor, Davis JP, NP Boqwana
Legal Topics
Horizontal Agreements, Price Fixing, Cartel Liability, Passive Participation, Administrative Penalty, Competition Act Section 4
Competition Law Commercial and Corporate Horizontal Agreements Price Fixing Cartel Liability Passive Participation Administrative Penalty Competition Act Section 4

Case Brief

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Parties

Omnico (Pty) Limited

Appellant

Cool Heat Agencies (Pty) Limited

Appellant

Competition Commission

Respondent

Fritz Pienaar Cycles (Pty) Limited

Respondent

Melody Street 18 (Pty) Limited

Respondent

Moneymine 88 CC t/a Hot Spot Cycles

Respondent

Peddle On Marketing (Pty) Limited t/a Maverick Cycles

Respondent

Saloojee's Cycles CC

Respondent

Westrand Cycles CC

Respondent

Bowman Cycles (Pty) Limited

Respondent

Albatros Fishing and Cycling

Respondent

Cytek Cycle Distributors CC

Respondent

Maillot Jaune Trading (Pty) Limited

Respondent

Tridirect SA (Pty) Limited t/a Vicicletta

Respondent

Le Peleton (Pty) Limited

Respondent

DBS Distributing t/a Thule Carrack Systems CC

Respondent

Pedalling Dynamic CC t/a Dunkeld Cycles

Respondent

Summit Cycles

Respondent

Dynamic Choices Two CC t/a Bester Cycles

Respondent

Johnson Cycle Works CC

Respondent

The New Just Fund Group (Pty) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Competition Tribunal Decision

Legal Issues

  1. 1 Does silent participation by firms at a meeting where cartel activity is discussed amount to a contravention of section 4(1)(b)(i) of the Competition Act?
  2. 2 Was there sufficient evidence of agreement or concerted practice among wholesalers to fix recommended retail prices?
  3. 3 Are Omnico and Coolheat liable for cartel conduct despite claiming passive or non-active participation?

Ratio Decidendi

The court found that Omnico and Coolheat attended meetings where the collective raising of recommended retail prices was discussed and agreed upon. Their failure to publicly distance themselves from the consensus reached at the September 2008 meeting, combined with subsequent price increases in line with the agreement, constituted participation in a cartel. The court held that passive attendance and silence, in the context of anti-competitive discussions, is sufficient for liability under section 4(1)(b)(i) of the Competition Act. The evidence presented by the Commission was clear, consistent, and convincing, and the appellants did not provide adequate rebuttal. The penalty was...

Court Disposition

Appeal dismissed except for reduction in penalty imposed on first appellant.

Orders

  • The appeal is dismissed, with costs to be paid by first and second appellants jointly and severally.
  • The order of the Competition Tribunal is altered only to the extent that the penalty imposed upon first appellant is reduced to R1,925,366.