The Competition Tribunal (“Tribunal”) has found that Cape Gate (Pty) Ltd (“Cape Gate”) contravened section 4(1)(b)(i) of the Competition Act (“Act”) by participating in price-fixing in the market for the purchase of scrap metal in South Africa.
Scrap metal, which includes waste metal from cans, household appliances and other metal items, is a key input in the production of steel products.
The Tribunal has found that certain large buyers of scrap, including Cape Gate, entered into an agreement to fix the purchase price of scrap metal. The other respondents were ArcelorMittal South Africa Ltd (“ArcelorMittal”), Columbus Stainless (Pty) Ltd (“Columbus”) and Scaw South Africa (Pty) Ltd (“Scaw”).
ArcelorMittal and Columbus both admitted liability and concluded settlement agreements with the Competition Commission (Commission), which were later confirmed by the Tribunal.
Scaw was the corporate leniency applicant.
Background
The Commission submitted that the firms operated as a buyers’ cartel, working together to use the same pricing formula and premium when buying scrap metal from scrap merchants. The Commission contended that collective negotiations by competitors to directly or indirectly agree on a purchase price for scrap, in contrast to individual and independent negotiations between each of them and each of the scrap merchants, is prohibited by the Act.
Cape Gate denied the allegations, but the Tribunal dismissed its defences.
Further proceedings in relation to remedies will be determined in due course.
According to the Commission, the buyers’ cartel conduct ended in 2008.
Scrap metal, which includes waste metal from cans, household appliances and other metal items, is a key input in the production of steel products.
The Tribunal has found that certain large buyers of scrap, including Cape Gate, entered into an agreement to fix the purchase price of scrap metal. The other respondents were ArcelorMittal South Africa Ltd (“ArcelorMittal”), Columbus Stainless (Pty) Ltd (“Columbus”) and Scaw South Africa (Pty) Ltd (“Scaw”).
ArcelorMittal and Columbus both admitted liability and concluded settlement agreements with the Competition Commission (Commission), which were later confirmed by the Tribunal.
Scaw was the corporate leniency applicant.
Background
The Commission submitted that the firms operated as a buyers’ cartel, working together to use the same pricing formula and premium when buying scrap metal from scrap merchants. The Commission contended that collective negotiations by competitors to directly or indirectly agree on a purchase price for scrap, in contrast to individual and independent negotiations between each of them and each of the scrap merchants, is prohibited by the Act.
Cape Gate denied the allegations, but the Tribunal dismissed its defences.
Further proceedings in relation to remedies will be determined in due course.
According to the Commission, the buyers’ cartel conduct ended in 2008.
Issued by:
Gillian de Gouveia, Communications Manager
On behalf of the Competition Tribunal of South Africa
Tel: +27 (0) 12 394 1383
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
X (Twitter): @comptrib
LinkedIn: Competition Tribunal of South Africa