South Africa’s retailer Shoprite charged for contravening competition act

SOUTH AFRICA – Shoprite Checkers, South Africa’s supermarket chain store and holding company of ticket distributor- Computicket, has been charged for allegedly contravening the competition act, reports IOL Business.

Competition Commission had earlier on said that it had referred a case against ticket distributors Computicket Ltd and Shoprite Checkers Ltd to the Competition Tribunal for prosecution for alleged anticompetitive conduct.

“The two companies have been charged with signing and enforcing exclusive agreements in contravention of the Competition Act from 2013 to date,” the commission said.

In terms of the agreements, the commission said, Computicket had been appointed as the sole provider of ticketing services to the inventory provider or customer.

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However, after Shoprite Checkers acquired Computicket, the firm changed the duration of its exclusive contracts in 2015 to a standard period of three years.

“In these agreements, Computicket has the ability to price discriminate between its large and small inventory provider customers.

The contractual terms of the agreements extend the foreclosure in that third parties, who are not necessarily contracted with Computicket, are required to deal with Computicket, to the exclusion of Computicket’s competitors,” the commission said.

The commission further said that Computicket was able to isolate competitive pressure arising from inventory providers due to the ability of larger customers to negotiate better rates than small customers.

The commission asked the Tribunal to impose an administrative penalty of 10% of Computicket and Shoprite Checkers’ annual turnover.

Shoprite Checkers said in a statement that the firms had been served with a notice of referral of the complaint by the commission to the Competition Tribunal.

“The companies have studied the referral and disagree with the basis for the referral,” Shoprite said.

“In terms of the Competition Act, the respondent companies may answer the referral within 20 business days after being served with the referral. Opposing affidavits will be filed by the respondent companies within the required time frames,” it said.

The commission initially received five complaints between 2008 and 2009 from Strictly Tickets, Artslink, Going Places, TicketSpace and Ezimidlalo Technologies against Computicket.

The commission said it had consolidated the complaints from 1999 to 2012 into a single case and referred the matter to the tribunal in April 2010 on the basis that “the exclusive agreements between Computicket and inventory providers contravene sections of the Competition Act No 89 of 1998, as amended”.

It referred this case, covering the period from 1999 to December 2012, to the tribunal in April 2010, with the merits of the matter heard in October last year and the tribunal’s decision still pending.

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