BMW April 2022

 The Competition Tribunal has dismissed an application by Life Wise, trading as Eldan Auto Body, to excise its admission of cartel conduct, as contained in a consent agreement that was confirmed as an order of the tribunal in August 2020.

Eldan had sought the removal of its admission on the grounds that it alleges it is facing economic hardship, which constitutes exceptional circumstances to vary the order. This is because, following the tribunal’s order confirming the consent agreement, Mercedes-Benz terminated its accreditation to Eldan to repair Mercedes-Benz vehicles.

Further, Eldan said it had entered into settlement negotiations and concluded the consent agreement with the Competition Commission without legal representation, and that, as a small business owned by historically disadvantaged individuals (HDIs), it would be removed from the automotive repair services market and this would not advance the objectives of the Act or the commission’s Automotive Aftermarket Guidelines, which seek to assist small, medium-sized and microenterprises (SMMEs) and HDIs in this sector.

The tribunal said it was mindful that Eldan belongs to a designated group that the Competition Act seeks to promote.

However, it held that cartel conduct, as the relevant section of the Act in this case, was 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 anti-competitive conduct, whether the firm is big or small. “In our view, competition could equally be served by another HDI or SMME in line with the objectives of the Automotive Aftermarket Guidelines in the sector.”

Additionally, on the facts of this case, the tribunal found that the alleged hardship does not constitute exceptional circumstances which outweigh the broader interests of justice and public policy.

“The alleged exceptional circumstances pertain to consequences of the consent order on the private interests of Eldan rather than exogenous factors caused by changes to a market where a behavioural remedy may be affected,” the tribunal said.

Further, it noted that Eldan had been legally represented throughout the matter up until the settlement stage.

“Before it had confirmed the consent order, the tribunal specifically questioned the commission and Eldan regarding the scope of the admission. The commission and Eldan responded and confirmed that the admission includes the latter sections and signed an addendum to that effect,” the tribunal said.

By Schalk Burger