South Africa 11.5.2017 11:50 pm

Commission welcomes ConCourt dismissal of bicycle cartel leave to appeal

Constitutional Court justices.  Picture: Tracy Lee Stark

Constitutional Court justices. Picture: Tracy Lee Stark

Two members of the bicycle cartel were found guilty of price fixing.

The Competition Commission has welcomed the Constitutional Court’s decision to dismiss with costs the application for leave to appeal by two members of the bicycle cartel, who were found guilty of price fixing.

Omnico and Coolheat Agencies went to court seeking leave to appeal the Competition Appeal Court’s ruling against them.

The appeals court had ruled that if a firm participates in a collusive meeting, without publicly distancing itself from what was discussed, the company has given other participants in the meeting reason to believe that it agreed to and would comply with what was decided at the meeting.

In 2008, some 20 bicycle retailers and wholesalers contravened the Competition Act by agreeing to fix prices during a meeting held in September of that year.

The Commission initiated a complaint against all 20 parties and subsequently concluded settlement agreements with 11 bicycle retailers and six wholesalers. Among others, the retailers and wholesalers admitted to having contravened the Act.

However, Omnico and Coolheat did not conclude any settlement with the Commission and pleaded not guilty. They argued at the Tribunal that they did not “actively participate” in the discussions and were therefore not liable.

The Tribunal, however, found the wholesalers did nothing to distance themselves from the discussions and that their silence amounted to an agreement.

The two subsequently took the decision on appeal to the Competition Appeal Court. The appeal was dismissed and the Competition Appeal Court found that Omnico and Coolheat engaged in price fixing.

The Commission fined Omnico and Coolheat R46 million and R42 million respectively.

The Constitutional Court on Wednesday also dismissed the application for leave to appeal.

This means that the precedent-setting decision by the Competition Appeal Court, relating to silent or passive participation in a collusive meeting, stands.

The decision of the Constitutional Court concludes the matter.

African News Agency (ANA)

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