Eldan Auto Body initially signed a R750 000 administrative penalty with the Competition Tribunal after admitting to cartel conduct.
The Competition Tribunal has dismissed a Pretoria panel beater’s application to withdraw its admission of cartel conduct.
The tribunal made the consent agreement it had signed Eldan Auto Body an order last year. In the agreement, Eldan admitted to breaching parts of the Competition Act, that include price fixing, dividing markets and collusive tendering.
Eldan was going to pay a R750 000 administrative penalty, as part of the agreement.
The case dates back to 2015, when the Competition Commission referred a complaint against Eldan and fellow panel beater Precision & Sons to the Tribunal.
The Commission’s investigation found that the companies had discussed and agreed to exchange cover quotes from 2011, and that the two held meetings and discussions on how to collaborate when providing quotes to clients. They also discussed prices to be charged for auto body repair services including panel beating and spray painting. Employees also regularly emailed each other to request cover quotes from each other.
At the time of the referral, Eldan and Precision were two out of three certified Mercedez Benz auto bodies repairers in Pretoria.
Eldan has however backtracked on its admission, asking for it to be removed because it is “facing economic hardship”, since Mercedes Benz terminated its certification. It explained that it did not have legal representation for the R750 000 settlement negotiations.
It claimed the agreeent would not be aligned to the objectives of the act or the commission’s Automotive Aftermarket Guidelines, to promote small businesses and historically disadvantaged people.
However, the Tribunal hit back saying that “cartel conduct … is one of the most egregious forms of anti-competitive conduct. “
“Consumers are harmed when they are deprived of competitive prices and product choice by a firm engaging in anticompetitive conduct, whether the firm is big or small”
The tribunal added that another small business or one that is owned by those previously disadvantaged, could be equally competitive, in line with the objectives of the Automotive Aftermarket Guidelines.