The Competition Commission’s investigations into vehicle pricing could take some time since the commission has warned consumers that certain allegations may be harder to prove than others.
The Competition Commission’s investigations into vehicle pricing could take some time since the commission has warned consumers that certain allegations may be harder to prove than others.
As part of the landmark investigation, the commission is investigating the issues of alleged collusion, excessive pricing and minimum resale price maintenance. All three investigations were triggered after allegations were made against Toyota, which in May was fined R12 million by the commission when it admitted to the practice.
Zodwa Ntuli of the commission said more manufacturers would be called upon soon to explain practising minimum resale price maintenance. However she pointed out that there might be no collusion or excessive pricing practices within the industry. Ntuli added, though, that the information uncovered in the Toyota and other investigations provided enough grounds to launch an official investigation.
Ntuli said the collusion allegations would be difficult to prove since simultaneous price movements alone could not be regarded as collusion. She said it would first have to be shown that manufacturers had an agreement regarding pricing.
The investigation into excessive vehicle pricing would take the longest time, Ntuli cautioned, since lots of economics would need to be applied in the enquiry.
Defined as occurring when the market price of the vehicle bears no relation to the production of that vehicle, Ntuli told the that “expensive does not mean excessive”.
She said the commission would have to determine whether market forces or anti-competitive behaviour were the main factors influencing vehicle prices. If the commission uncovers sufficient evidence, it will be the first such case to be heard by the Competition Tribunal.
