The Star Early Edition

Spotlight on tyre manufactur­ers over price fixing

Original complaint to stay

- Roy Cokayne

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.

 ?? PHOTO: REUTERS ?? 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.
PHOTO: REUTERS 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.

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