Victron and the Competition Commission - RSA

Think I have annoyed the engineers enough in other threads, so maybe time to turn to the legal eagles :wink:

Relevant section of Competition Act, 89 of 1998 (part relevant to the “current” victron issue is 5(2))

5. Restrictive vertical practices prohibited

(1) An agreement between parties in a vertical relationship is prohibited if it has the effect of substantially preventing or lessening competition in a market, unless a party to the agreement can prove that any technological, efficiency or other pro-competitive, gain resulting from that agreement outweighs that effect.

(2) The practice of minimum resale price maintenance is prohibited.

Interestingly the prohibition of resale price maintenance in South Africa is per se unlawful (i.e. no reason can excuse it).

while some provisions of the Competition Act allow for the weighing up of anti-competitive effects against pro-competitive gains to determine the lawfulness of an agreement or practice, no “rule of reason” analysis is permitted where minimum resale price maintenance is concerned – it is outright unlawful. [ source ]

It is apparently also not necessary to show that the conduct/policy actually lead to an anti-competitive outcome

Section 5(2) is an outright or, in the language of antitrust jurisprudence, a per se prohibition. In other words simply
proving the existence of the specified restrictive practice is sufficient for making a finding under Section 5(2). In contrast with violations alleged in terms of Section 5(1), Section 5(2) does not require that anti-competitive effects be established nor does it permit of an efficiency defense. [ source ]

So, if there is evidence of possible penalties (lowering discounts or refusing to supply in future) then Victron might struggle to not cough up for this (even if this happened in the past and regardless of motivation of the complainant).

It is unlikely that things got to this stage (i.e. Competition Commission referring to the Competition Tribunal) without this kind of evidence. The Competition Commission has powers of search and seizure and to summons.

Unless there are disputes around fact (for instance Victron might claim that the distributors chose to not “allow” discounts beyond a certain price, and “made up” the excuse that “Victron says we are not allowed to…”) I suspect Victron will negotiate for a consent order, with the Competition Commission before this goes to full litigation - like this one involving Toyota (see, I do read the posts…) where they do not admit liability.

Edit: @plonkster also noted the “I do not have inside info” part - my post is not intended to rehash the topic :slightly_smiling_face:

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