The law wears shade

The price of justice?

Following a complaint by a member of the public, the Competition Commission investigated Oakley Athletic, the sole distributor of Oakley Sunglasses in South Africa.

The complainant had alleged that all retailers charged the same price for Oakley sunglasses.

The Commission's investigation revealed that Oakley Athletic prescribed a minimum price for the resale of sunglasses to its retailers. This conduct amounts to minimum resale price maintenance prohibited by section 5(2) of the Competition Act.

Following the investigation, Oakley Athletic and the Commission signed a consent agreement in terms of which Oakley Athletic admitted to the contravention, agreed to pay an administrative penalty of R212 100.00 and undertook to implement a compliance program which will ensure that its business complies with the Competition Act.

So we put the obvious questions to the competition commission: According to Liziwe Konyana, head of communications at the Competition Commission, any consumer who suffered damages as a result of a prohibited practice may in terms of section 65 of the Competition Act, institute civil action against the contravening firm, after obtaining a certificate from the Competition Tribunal on the prohibited practice.

This claim for damages must however, as any other civil damages claim be proven in a Court of Law; in other words the amount claimed must be proven and there must be a causal link between the damages and the prohibited practice.

In the present case, consumers might have qualified for discount of between 10 - 20% on Oakley sunglasses if it was not for the prohibited practice and I personally doubt if any consumer would go through the trouble, incur legal costs and face the risk of litigation to try and recover damages of around R100 to R200.

Regarding the implementation of a compliance programme, it is the offending firm's responsibility to ensure that a proper programme is introduced to ensure that its business practices are in compliance with the provisions of the Competition Act.

A copy of the programme is submitted to the Commission, but the onus is on the relevant firm to ensure that its employees comply fully with the provisions of the Act and that it does not run the risk of becoming a repeat offender.

Editor's thoughts:
* Don't you love this? First the FSB won't prosecute anyone and insider traders pay a fine but don't acknowledge guilt, and then the competition commission finds anti competitive behaviour and the consumer, who has been done-over for so many years, has no recourse because of the cost of law.
* The last paragraph is especially interesting as it implies that the management in case had no idea of the anti-competitive behaviour and blamed it on the employee.
* So the message is simple, as is the case in most regulatory activity in this country. Get the complaint, investigate, find a problem, discuss with the guilty party, settle out of court, pay a fine and walk away scot free. Now what kind of message does that send out to the youth of the country. It's OK to do something illegal because all you will do is pay a fine.