The Competition Tribunal imposes R250 000 fine on Edcon
The Competition Tribunal has found that Edgars Consolidated Stores Limited
(Edcon) and Retail Apparel Ltd (RAG) have contravened the Competition Act in
that they have implemented a merger prior to approval in terms of the Act. The
Tribunal has accordingly imposed a fine of R250 000.
The Competition Commission had asked the Tribunal to impose a fine of R85 552
610 on the grounds that the Edcon"s purchase of RAG"s book debts constituted a
merger and the Edcon had contravened the Act by implementing the merger prior to
approval.
The Tribunal said that a fine far lower than that proposed by the Commission was
appropriate given that the violation was procedural rather than substantive. In
addition, the parties had never intended to evade substantive scrutiny of the
merger because they did notify the Commission of their views regarding
acquisition of the book debt prior to implementation. But the Tribunal said it
could not be so low that a firm would regard it as worth evading the procedural
prerequisites of the Act to secure a quick deal because the implementation of
the transaction could be held up in the process to obtain regulatory approval.
The criteria for imposing a fine are set out in the Act and include, the nature
and duration of the contravention, the level of profit derived from the
contravention and the degree to which a respondent has co-operated with the
Competition authorities. The Tribunal may impose a fine of up to 10 % of the
defaulting firm"s annual turnover for the preceding financial year.
Issued by: Jane Sussens
Communications Advisor
The Competition Tribunal
Tel: (011) 483 2687
Cell: 082 920 0875
E-Mail:jane.sussens@mweb.co.za
On Behalf of: Shan Ramburuth
CEO
The Competition Tribunal
Tel: (012) 482 9204
Fax (012) 482 9201
Cell: 083 3571 685
E-Mail: shanr@comptrib.co.za
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