Competition Tribunal uses EU 2006 fining guidelines for first time in wire mesh case

The Competition Tribunal has fined Reinforcing Mesh Solutions (RMS) and Vulcania Reinforcing a R27.2 million administrative penalty for their roles in a wire mesh cartel. The companies had been fixing prices and discounts, and allocating customers.

Following a leniency application by Murray and Roberts Steel, the Competition Commission investigated the cartel. It found that an industry association, the South African Fabric Reinforcing Association, was used to hold meetings, where prices were discussed and set. Vulcania claimed that its participation was merely a sham, and that any agreements reached at the meetings were not formalized in contracts. However, the Tribunal found that since Vulcania benefited from the cartel, the company contravened the Competition Act.

The Competition Tribunal followed a new six-step approach based on the EU 2006 fine guidelines when it calculated the penalties. RMS is to pay R21.6 million. Vulcanian is fined R5.6 million.

Full content: fin24

Related content: EU Cartel Fining Laws and Policies in Urgent Need of Reform (Karl Hofstetter, Schindler Holding AG and University of Zurich)

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