Spotlight on tyre manufacturers over price fixing
Original complaint to stay
THE COMPETITION Tribunal has rejected an application by tyre manufacturers Goodyear and Continental Tyre for an order setting aside a portion of the Competition Commission’s complaint referral against four tyre manufacturers for price fixing.
The commission referred a complaint against Goodyear; Continental Tyre; Apollo Tyres South Africa, formerly Dunlop; Bridgestone South Africa; and industry association, the SA Tyre Manufacturers Conference (SATMC), to the tribunal in 2010 for collusive tendering, price fixing of passenger, light truck, bus, off-road, agricultural and earthmoving tyres, information exchange and market allocation between 1999 and 2007.
The referral followed a complaint lodged with the commission by Parsons Transport in October 2006, which alleged that tyre manufacturers simultaneously adjusted their prices at about the same time and within the same parameters.
This led to the commission conducting a search and seizure operation at the premises of Bridgestone, Apollo and the SATMC in April 2008.
Bridgestone SA applied for and was granted conditional immunity from prosecution in terms of the commission’s corporate leniency policy after admitting it held telephonic discussions and met with its competitors between 1999 and 2007 to agree in principle that they should co-operate to ensure stability in the market.
Tyre importers Yokohama Southern Africa and Michelin Tyre Company South Africa were found not to be involved in the cartel conduct.
The commission’s investigation found that the SATMC was used as a platform for “coffee table discussions” to determine price increases and general co-ordination in the market among the tyre manufacturers.
These meetings were attended by the tyre manufacturers’ sales and marketing representatives and co-ordinated the timing and the average percentage price increase of tyres, agreed on the discount structure to be given to tyre dealers and messages to be given to the market explaining the increases.
Various interlocutory applications since the commission’s referral in 2010 resulted in Goodyear, Continental and the SATMC only filing their answering affidavits to the main matter last year.
In its application to the tribunal, Continental had questioned whether complainant Parsons Transport had validly authorised all the extensions received by the commission during its investigation and argued that not all the extension agreements
SATMC was used as a platform for ‘coffee table discussions’ to determine price increases.
were signed by the complainant, with some signed by the complainant’s legal representative and others by Continental Tyre’s financial manager.
The tribunal ruled that the Competition Act did not stipulate that an agreement to extend should be reduced to writing and it had become a practice by the commission to requests extensions from complainants by first obtaining these verbally and then submitting them in writing.
This could result in the signed document being sent back by the complainant after the date on which the agreement was obtained rather than the date on which the agreement had been obtained.
Goodyear and Continental had also alleged the referral against them was lodged out of time and should therefore be rejected because it was filed at 4.50pm, which was after the 3.30pm time period stipulated in the tribunal rules.
However, the tribunal said the tribunal rules showed that the registrar could accept documents within or outside the office hours of the tribunal, in his or her discretion, as well as at the direction of the tribunal or a member of the tribunal assigned by its chairperson.
The tribunal will hear discovery applications next week from Continental and Goodyear on further documents they were seeking from the commission. A new timetable still has to be agreed on when the main matter will be heard.
New car tyres inside the Clairoix Continental tyre factory in this file photo. Tyre manufacturers Continental and Goodyear are probed by the Competition Commission over price fixing allegations.