Coronavirus - Competition Tribunal: excessive pricing complaint referrals - South Africa

• South Africa

• Consumer

04-04-2020

On 3 April 2020, Regulations on Competition Tribunal Rules for Covid-19 Excessive Pricing Complaints Referrals (“Regulations”) were published in response to an increase of allegations of excessive prices and profiteering during the National State of Disaster. The Regulations allow the Competition Tribunal (“Tribunal”) to hear matters on an urgent basis and to impose necessary orders for the duration of the National State of Disaster. On 6 April 2020, the Tribunal issued a directive as a guideline for dealing with urgent complaint referrals.

In terms of section 8(1)(a) of the Competition Act No. 89 of 1998 (“Act”), read together with Regulation 4 of the Consumer Protection Regulations, a dominant firm may not charge excessive prices to the detriment of consumers or customers. Any material price increase of certain goods or services during the National State of Disaster, which does not correspond with the average margin of mark-up in the three months prior to 1 March 2020, will be a relevant factor for determining whether the price is excessive or unfair. These goods and services include, inter alia, basic consumer items and food, emergency products and medical and hygiene supplies.

Procedure

The steps for initiating urgent complaints of alleged section 8(1)(a) contraventions with the Tribunal include the following:

1. A complaint referral must be filed by way of a Notice of Motion together with a founding affidavit (“Application”). This complaint referral may either be filed by the Competition Commission (“Commission”) or an individual complainant as soon as possible after the Commission has issued a notice of non-referral to that complainant.

2. The Notice of Motion must:

• include the alleged contravention of section 8(1)(a) of the Act read together with Regulation 4 of the Consumer Protection Regulations
• indicate the order sought against the respondent(s)
• state the name and address of each respondent (this can be an electronic address)

3. The Notice of Motion may specify the date and time on which the applicant requests the matter to be heard by the Tribunal. In this regard, the founding affidavit should set out the grounds for urgency and the material facts or points of law and evidence in support of the urgent complaint referral. The founding affidavit may include supporting and/or confirmatory affidavits from any witnesses.

4. The applicant is responsible for serving a copy of the Application on each of the respondent(s) named in the Notice of Motion. A copy of the Application must be filed with the Tribunal, together with proof of service on the respondent(s), on the same day.

5. Respondent(s) wishing to oppose the Application must serve an answering affidavit on the complainant and the Tribunal within 72 hours of service of the Application.

6. The applicant will thereafter have the opportunity to serve a replying affidavit within 24 hours of receiving the answering affidavit. The answering affidavit must be filed with the Tribunal, together with proof of service on the respondent(s), on the same day.

7. The Tribunal will set the matter down for hearing within 48 hours of the close of pleadings.

8. The applicant and the respondent(s) must file a joint statement with the Tribunal within 24 hours of the close of pleadings. The joint statement should indicate the facts and issues which are agreed between them and those which are in dispute.

In terms of the Regulations and the Tribunal’s directive, it is important to note that:

• parties may electronically file all documents with the registrar of the Tribunal (ctsa@comptrib.co.za and registry@comptrib.co.za)

• all evidence must be contained in the relevant affidavits, as the Tribunal will determine any contraventions based on the evidence contained in the affidavits (unless the Tribunal determines that oral evidence should be heard by way of video or audio proceedings)

Hearings

Consent Orders (i.e. where the respondent agrees to settle) between the Commission and the respondent will be granted in chambers and the parties will not be required to attend the hearing.

In the event that the respondent fails to oppose the application by filing an answering affidavit, the Tribunal will decide the matter based on the applicant’s affidavit and may request further information from the applicant. The applicant will not be required to be present for the hearing and the Tribunal will strive to issue an order within 24 hours.

Non-complex applications (where respondent opposes the application but there is no dispute of facts) will be heard in chambers by the Tribunal. Parties may be required to be present for the hearing, which may be conducted via audio or video conference. The Tribunal will strive to issue an order within 24 hours of hearing the application.

Complex applications (where there is a substantial dispute of facts) may require the Tribunal to participate in the hearing by way of audio or video conference). The Parties will be notified as soon as the Tribunal has made a decision.

The Tribunal has the power to impose a pricing order on the respondent(s) found to have contravened section 8(1)(a) of the Act, however, the respondent(s) may apply to appeal or review the pricing order on an urgent basis at the Competition Appeal Court.