Uniform pricing is against the law
DURBAN - The recent investigation into price fixing by the South African Competition Commission should be a warning to businesses in industries that practice price fixing.
According to Nick Altini, the Partner and Head of Competition Practice at Ben Mckenzie said that companies within industries that commit the act of price fixing will be found guilty of breaching the Competition Act.
Price fixing is when an industry body promotes fixed prices and members of that body agree to charge people those prices.
Uniform pricing is only allowed when pricing is regulated, an example could be petrol prices. For price fixing or collusion to take place competitors have an agreement or a concerted effort. A concerted effort happens when businesses knowingly follow the others pricing or match prices with no agreement.
Altini said that the South African Football Intermediaries Association and the Institute for Market Agents of South Africa members are currently facing price fixing and fixing trading conditions charges.
SAIFA and 36 of its members are being investigated by the Competition Commission regarding price fixing and fixing trade conditions in representing the football clients.
The Commission said that SAFIA members agreed to charge the parties involved, soccer players and coaches, the standard 10% fee when negotiating and ending contracts on their behalf.
The Commission has also recommended 14 fresh produce market agents to the Competition Tribunal after investigating how the agents pay the farmers. Another case that they are working on is against media owners who sell advertising space.
Some people from within the industry that are being looked into can argue that they agree with fixed pricing rules, however insist they do it this way because it has been that they have done business even before the Competition Act.
-BUSINESS REPORT ONLINE