Category: settlement

SA telecoms firm implements antitrust settlement terms

Posted on by andreasstargard

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According to a report by ITweb Business, the South African incumbent R16 billion telecommunications giant Telkom Limited (no stranger to this blog) has now taken steps to implement its landmark June 2013 settlement in a margin-squeeze and monopolization case brought by the South African Competition Commission (the “Commission”).

The settlement was finalized by the Competition Tribual on 18 July 2013.  Its terms include, importantly for the latest job-related and divisional developments at Telkom, the functional separation between the company’s retail and wholesale divisions, in addition to other pricing commitments, a fine, and ongoing monitoring obligations under the guidance of the Commission.  As reported today, the company has now also issued and implemented a new antitrust/competition compliance policy, its so-called “Competition Settlement Code of Conduct Policy,” reportedly a whopping 25-page document.

In this latest round of compliance efforts, Telkom’s CEO Sipho Maseko is said to have sent out communications to all staff, attempting to alleviate media reports about potential large-scale job cuts.  He is cited as follows: “While I can’t predict the future, I can unhesitatingly say the 12 months that lie ahead will be demanding. Challenges await, of this we can be certain. We will have to be on top of our game and tackle the issues that influence our business with focus and purpose if we are to unlock our full potential.”

Telkom’s CEO

Soccer fields, SRAM, and Sotheby’s? Fast-track settlements in ZA construction probe yield €113m

Posted on by andreasstargard

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What do soccer stadiums, LCD panels, and lysine** have in common?  Price-fixing might be one answer.  Record antitrust fines might be another, closely related, response.

The South African Competition Commission (“Commission”) has obtained settlements of 1.5 billion rand or about €113 million with up to 15 construction companies.  This constitutes, by our reckoning, a new record for the Commission.

The fast-track settlement procedure used by the agency (in all but 3 cases, in which the accused firms chose not to pursue fast-tracking) shortened the time necessary to reach finality on the deals.  It also allows the Commission to free up its manpower resources to work on other matters, since maintaining full-fledged investigations in all of the now-settled cases would have been a long and arduous process for all parties involved — as we reported previously on AfricanAntitrust.com here and here, the scope of the ZA construction-sector bid-rigging investigation has ballooned beyond even the wildest dreams of enforcers.

The Commission’s press release sheds further light on the breakdown of the fines per party, covering conduct since September 2006 in over 300 instances of bid-rigging:

constructionfines

Post-scriptum: The fines, although record-setting, are lower than expected by investors.  Consequently, shares in the affected undertakings have soared 1-3%, as reported by BusinessReport here.

** Sorry – I strayed a bit from the original alliterative title here.  (Otherwise, I could not have made the “record fines” point…)

Details of $2.9 billion bid-rigging come to light in South African parliament

Posted on by andreasstargard

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As SAcommercialPropNews reports, the South African Parliament heard testimony from the chairman of the Construction Industry Development Board (CIDB), Mr. Bafana Ndendwa, on the developments and results of the South African Competition Commission’s investigation into the building industry at large.

The investigation into the potential 26 billion Rand collusion had begun when building budgets related to the 2010 FIFA soccer world cup in South Africa were plagued with cost overruns.  Since then, it appears that well over 40 construction companies have been investigated by the Commission.  We had previously reported on antitrust settlements in the S.A. building industry here.

Even with some settlements underway, the building-industry antitrust saga appears far from over, though.  Creating a spectre of double jeopardy, Mr. Ndendwa stated that leniency from the Commission may not yield similar treatment by other investigating bodies.  The cited article also quotes members of the ‘Portfolio Committee’ of the Parliament as pressing for criminal charges to be filed.  This is an interesting development, as the South African competition law (as it is currently in effect) does not [yet] provide for criminal sanctions against individuals.  While the law had been amended to include such a provision, the amendments have not yet been ratified and put into effect.

South Africa: Telkom agrees to penalty

Posted on by oxenhamjmj

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South Africa’s incumbent telecommunications infrastructure provider, Telkom Limited, has agreed to pay R449 million ($49m) to the South African Competition Commission (the “Commission”) to settle allegations that Telkom had abused its dominant market position. The company statement can be found here.

In August 2012, the Competition Tribunal (the “Tribunal“) levied the R449 million fine against Telkom for abusing its dominant position between 1994 and 2004, after the Commission received complaints from, inter alia, the South African Value Added Networks Services.

Telkom subsequently appealed the Tribunal’s decision to the Competition Appeal Court (“CAC“) which the Commission followed with its own appeal to the CAC seeking to increase the fine to R3 billion ($327m). The settlement agreement will effectively result in the parties withdrawing their appeal and/or cross-appeal and cover their own costs. In terms of the agreement, Telkom will pay 50% of the fine within six months and the balance within 18 months.

S.A. Competition Tribunal confirms 2 new settlements

Posted on by andreasstargard

south_africa

South Africa’s highest governmental competition authority, the Competition Tribunal, has approved two settlement agreements reached by the lower Competition Commission with Air Products South Africa and MVA Bricks / MVA Stene, respectively.

These relate to collusive behaviour in various business sectors, including the building sector which had been investigated by the antitrust watchdog for an extensive period of time.

The former settlement requires Air Products to pay a penalty of almost R2.8 million (about USD300,000) for purported market allocation between it and Sasol Chemical Industries in the industrial gases market. The undertaking published a press release, noting that:

“Air Products has agreed to amend the suite of agreements with Sasol to remove any provisions that contravene the Competition Act; to develop, implement and monitor a (renewed and enhanced) competition law compliance programme incorporating corporate governance designed to ensure that its employees, management, directors and agents do not engage in future contraventions of the Competition Act; and to refrain from engaging in anti-competitive conduct in the future.

“Air Products intends to implement further internal measures to inculcate an increased awareness of the Competition Act and to ensure compliance with the competition laws of South Africa going forward, to ensure that no further inadvertent contraventions of the Competition Act take place.”

The latter settlement with MVA Bricks calls for a R672 565 penalty for collusion between MVA and Aveng Africa in the market for generic paving blocks.