29 October 2014 by Cliffe Dekker Hofmeyr Competition Alert

Competition Commission investigates automotive industry

The Competition Commission (Commission) recently announced that it is investigating various instances of collusive conduct in the market for the manufacture and supply of automotive components used to manufacture motor vehicles.

The Commission is investigating alleged price fixing, market division and collusive tendering by the manufacturers of various vehicle parts, including electric power steering and motors, glow plugs, pressure regulators, accelerator pedal modules and spark plugs.

The Commission indicated that it has information in its possession of collusive conduct taking place from 2000 up to date, with 82 vehicle part manufacturers being implicated in such conduct in respect of the supply of over 121 different parts to motor vehicle manufacturers such as Toyota, Daihatsu, Nissan, Isuzu, General Motors, Hyundai, Yamaha, Volvo, Mazda, Mitsubishi and Ford.

The Commission is currently only investigating this conduct and there is no indication of whether the Commission will proceed to refer this collusive conduct to the Competition Tribunal for adjudication in the near future or at all.

The Commission has extensive powers at its disposal during an investigation to assist it in determining whether collusive conduct has in fact taken place and to formulate its case against parties that have transgressed the Competition Act, No 89 of 1998.

This includes summonsing parties to be interrogated by the Commission and to provide the Commission with relevant information and documentation and conducting search and seizure operations (referred to as dawn raids) to obtain information that may be relevant to its investigation.

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