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CONSTRUCTION COMPANY AGREES TO PAY R300K PENALTY
FOR ALLEGED CARTEL CONDUCT
A Gauteng-based company, active in the supply of construction, electrical civils and transportation services, has agreed to pay a R300 000 penalty for allegedly colluding on a City Power Johannesburg (SOC) Ltd (“City Power”) tender in June 2018. The tender related to the appointment of labour contractors for installation, maintenance of medium and low voltage infrastructure including public lighting and major capex projects.
In terms of a settlement agreement, concluded between Maziya General Services CC (“Maziya”) and the Competition Commission (“the Commission”), Maziya also agrees to implement a competition law compliance programme and undertakes to refrain from engaging in any anti-competitive conduct, in contravention of the Competition Act (“the Act”), in future. The settlement agreement has been confirmed as an order by the Tribunal.
Although Maziya agrees to the terms of the settlement agreement, it does not admit that it contravened the Act, as alleged by the Commission. The Commission has agreed to enter into the settlement agreement with Maziya without an admission of liability, based on, among others, the following factors, read with the remedies contained in the settlement agreement:
- Maziya has not previously been found guilty of contravening the Act;
- The Commission does not wish to use its limited litigation resources to pursue a small firm like Maziya; and
- The tender was cancelled before coming to an end.
Case background
In December 2019, the Commission received a complaint from City Power. It had alleged that competitors, Maziya and Cromico Trading (Pty) Ltd (“Cromico”), entered into an agreement to fix prices and tender collusively when responding to the City Power tender.
The Commission’s investigation found that around June 2018, Maziya and Cromico agreed on prices for line items to the tender, related to, among others, the supply of ready mix concrete, laying of cable and replacement of jumpers. The Commission concluded that this behaviour contravened section 4(1)(b)(i) and (iii) of the Act.
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