Competition Commission conducts dawn raid at Akulu Marchon and Investchem

4 Feb 2015 2 min read Competition Alert Article

The Commission is armed with an arsenal of powers to conduct its investigations into alleged anti-competitive behaviour. One such power is the use of search and seizure operations, otherwise known as dawn raids. Section 48 of the Competition Act, No 89 of 1998 (Act) empowers the Commission to enter a firm's business premises in order to inter alia search the premises, inspect and request copies of any document, search electronic data and remove items from the premises, provided it has a bearing on the investigation.

In the previous year, the Commission actively engaged in a number of dawn raids, affirming its intention to bring an end to anti-competitive collusive behaviour. On 3 April, the first dawn raid of 2014 was carried out at the business premises of Unilever South Africa Proprietary Limited in Durban, Kwa-Zulu Natal and Sime Darby Hudson and Knight Proprietary Limited in Boksburg, Gauteng. On 4 July 2014, the second dawn raid was carried out the business premises of Precision and Sons, Eldan Auto Body in Pretoria, Gauteng and Vehicle Assessment Centre in Centurion, Gauteng.

The final dawn raid of 2014 occurred in December. The Commission determined that it had reasonable grounds to believe that since 2003, Akulu Marchon Proprietary Limited (Akulu Marchon) and Investchem Proprietary Limited (Investchem) have allegedly engaged in anti-competitive collusive behaviour in contravention of s4(1)(b)(i) and (ii) of the Act.

The Commission stated, in its media release, that it had reasonable grounds to believe that Akulu Marchon and Investchem have held meetings and agreed to fix the price for surfactants and allocate customers between one another in the market for the production and supply of a range of surfactants. Surfactants are used as key inputs in the manufacture of blended household detergents, cosmetics and toiletries. After obtaining warrants from the North Gauteng High Court, the Commission conducted a dawn raid at the offices of Akulu Marchon and Investchem on 4 December 2014. Competition Commissioner Tembinkosi Bonakele, in the Commission's media release, submitted that the information obtained from the dawn raid would enable the Commission to determine whether or not the parties have engaged in the alleged conduct.

It is encouraged that firms have comprehensive plans in place to deal with dawn raids, thus safeguarding their rights.

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