Two competing companies referred to Competition Tribunal for price fixing, collusion

The Competition Commission has referred two competing companies trading on Takealot to the Competition Tribunal for prosecution. Takealot is an online retailer.

The companies are suspected of price collusion.

The commission alleges that Medmart Health and BabyBug, both companies which sell personal protective equipment (PPE), colluded to fix prices on face masks and divided the market by allocating customers in contravention of the Competition Act.

It’s alleged that in or around December 2020, Medmart and BabyBug entered into an agreement and engaged in a concerted practice to fix prices and divide markets by allocating suppliers.

Just released: The Commission has referred two PPE companies to @comptrib for prosecution. At the height of the #Covid19 pandemic these two companies colluded to fix prices of face masks in contravention of the Competition Act. Read the media statement at https://t.co/GWTMyQhByD pic.twitter.com/bB1Ovy2JRd

— CompComSA (@CompComSA) January 26, 2023

Spokesperson for the Competition Commission, Sipho Ngwema says the Competition Commission has referred to the Competition Tribunal two companies trading on the Takealot platform for collusive conduct.

“It is alleged the two companies allocated days to each other on which each company would adjust its respective prices and stock availability accordingly, this would limit competition between themselves. They also agreed to alternate the days each would price higher than the other. This meant BabyBug and Medmart would each have a day to charge a higher price followed by a day to charge a lower price. The switching would be at 5 pm each day.”

Ngwema added: “Medmart and BabyBug agreed to communicate from time to time regarding what would be the higher and lower prices. The prices ranged from R79 to R90 per pack of 50 packs of 3-ply face masks. Takealot suspended BabyBug from its platform on 8 December 2022 and Medmart was suspended on 14 June 2021 on suspicion of collusion. This type of collusive conduct is harmful to consumers as it deprives them of the benefits which arise from competition. Such agreements are inherently inimical to competition and the Commission has asked the Tribunal to impose a maximum penalty.”