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BMW SA price fixing charges stick

2009-11-10 07:41
The Competition Commission has applied to the Competition Tribunal to amend part of its complaint referral against BMW South Africa, the Tribunal said on Monday.

The Commission had withdrawn its allegations that BMW contravened Section 5(1) and 8(c) of the Competition Act, the Tribunal said in a statement.

However, the Commission's allegation - that BMW contravened Section 5(2) by maintaining minimum resale prices (price fixing) - remained, the tribunal said.

"The Commission has not given reasons for its application to amend the complaint. This is an unopposed application," the Tribunal said.

The Commission had received a complaint against BMW from complainant Fourier Holdings, a former franchised dealer of BMW.

"The Commission investigated the complaint and determined that prohibited practices had occurred and referred the matter to the Tribunal," the Tribunal said.

"Abused dominance"

In its complaint referral the Commission had alleged that BMW had contravened Section 5(1) of the Act by assigning exclusive territorial areas in which franchised dealers were not permitted to deal.

The Commission also alleged that BMW had contravened Section 8(c) of the Act in that the car manufacturer had abused its dominance by hindering the third to fourteenth respondents (franchised dealers) including the complainant Fourier Holdings from expanding into and competing in territorial areas assigned.

"On the other hand BMW permitted its retail outlet to deal in all territories, including those assigned to their franchised dealers."

The Commission further alleged that BMW had contravened Section 8 (c) by refusing to supply Fourier Holdings with the relevant range of products ie, BMW parts and motorcycles.

"As a result of the amendment the complaint will be reduced to an allegation that BMW, in contravention of Section 5(2) of the Act, maintained minimum resale prices (price-fixing)."

The Commission alleged that BMW maintained minimum resale prices in relation to the products (i.e. BMW parts and motorcycles) that it franchised, and that it would not allow franchised dealers to offer discounts to customers from the prices determined by it, that it also monitored compliance with the set prices, and threatened sanctions for those who did not comply with set prices.


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