Competition tribunal chairman David Lewis has warned automotive manufacturer executives that they could face criminal punishment if found guilty of anti-competitive behaviour.
Competition Commission tribunal chairman David Lewis has warned automotive manufacturer executives that they could face criminal punishment if found guilty of anti-competitive behaviour.
Lewis made the announcement during the final hearing into Toyota's imposition of minimum resale prices on its dealers.
"Many other jurisdictions are following the US by introducing criminal penalties for individual corporate officers responsible for price-fixing offences," Lewis said. "It should come as a sobering thought to executives everywhere that the perpetration of a similar offence may, elsewhere, have resulted in a prison term," he said.
At the hearing, a consent order between the Competition Commission and Toyota SA was confirmed after the commission found that from September 2002 to September 2003, Toyota SA implemented a maximum discount policy. The manufacturer enforced the policy by fining eight dealers R25 000 each for selling cars below the stipulated price.
The policy was found to equate to minimum resale price maintenance, which is in contravention of the Competition Act. The vehicle manufacturer accepted a R12-million administration penalty, as well as other terms set by the commission, and agreed to refund the eight dealers it fined.
The investigation into Toyota sparked a probe into the rest of the motor industry to determine why vehicle prices remained high. The Competition Commission's manager for enforcement and exceptions, Diane Terblanche, could not say how long the industry-wide investigation would take.
The Toyota investigation started in May 2003 and ended at Wednesday's tribunal hearing.
Lewis said: "The parties to this consent order are to be commended for having arrived at this agreement. In the wake of the Federal Mogul and Toyota matters, managers everywhere should now clearly understand that resale price maintenance is an offence that will be apprehended and penalised."
But he said it would be unnecessary to consider more forceful solutions (such as bringing criminal charges against executives), provided the commission could discourage price-fixing using its existing authority.
Lewis also acknowledged the role of the complainant for bringing the matter to the attention of the authorities.
"He has demonstrated that consumers do not have to accept the appalling treatment to which they are commonly subjected." he said.
Original article from Car