The Competition Commission (Commission) has fined two companies
active in the mining roof bolts industry for their involvement in
the rigging of tenders and the allocation of customers in
contravention of the Competition Act.
The Commission initiated an investigation into alleged cartel behaviour in the mining industry pursuant to receiving information from Murray & Roberts subsidiary, RSC Ekusasa Mining (Proprietary) Limited (RSC) which admitted, through a corporate leniency application, its participation in a cartel. The cartel involved Aveng (Africa) Limited t/a Duraset (Duraset), Dywidag Systems International (Proprietary) Limited (DSI) and Videx Wire Products (Proprietary) Limited (Videx).
The Commission's investigation revealed that the cartel may have existed from the 1990s to 2008. However, the complaint referral was limited to conduct which occurred between 2004 and 2006. Duraset reached a settlement with the Commission in which it had to pay an administrative penalty of almost ZAR 22 million. Accordingly, the matter proceeded against DSI and Videx.
The Commission specifically alleged that the two respondents were involved in bid rigging in respect of two reverse auction tenders put out by Anglo Platinum; an agreement to bid very low prices for a tender from Goldfields in a bid to punish Duraset; and an agreement to collude and assist RSC to increase its margins at Anglo Coal.
The respondents, while admitting many of the contraventions, alleged that the complaint was time-barred in that it was initiated more than three years since the prohibited practice ceased. Furthermore, the respondents alleged that they were not involved in the contravention involving Anglo Coal and that, as a matter of fairness, this aspect of the Commission's case was brought against them too late in the Tribunal's proceedings.
The Tribunal found that, in respect of all but the Anglo Coal and the Anglo Platinum contraventions, the Commission had not established that the effects of the collusive agreements subsisted beyond the cut-off date allowed by the Act for initiating complaints. Regarding the allegation on the Anglo Coal contract, the Tribunal found that to allow this late submission would have been procedurally unfair to the respondents.
In respect of the Anglo Platinum contract, the Tribunal found that the Commission had presented sufficient evidence of a contravention and accordingly the collusive effect of the respondents conduct in this regard subsisted beyond the three year prescription period allowed by the Act.
The Tribunal confirmed the Commission's order and an administrative penalty of ZAR 1,8 million and almost ZAR 4,8 million was imposed on DSI and Videx respectively for contravening the Act.
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