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Fire protection services companies prosecuted for cartel conduct

Published: 9th Oct 2019
Author: Sipho Ngwema; Head of Communication
Pretoria, Gauteng, SA (September 15, 2019) - The Commission has referred to the Competition Tribunal (Tribunal) for prosecution 18 fire protection companies for collusion.
These  companies are  Automatic Sprinkler Inspection Bureau (Pty) Ltd, Belfa Solutions (Pty) Ltd, Bhubesi Fire Projects (Pty) Ltd, Centa KZN Sprinklers Cc, National Security (Pty) Ltd, Country Contracts Cc, Cross Fire Management (Pty) Ltd, Fire Check Cc, Fire King Cc, Fireco (Pty) Ltd, IBR Fire Protection Cc, Jasco Fire Solutions (Pty) Ltd, Multi-Net Systems (Pty) Ltd, Specifire (Pty) Ltd, Sylvester Fire & Piping Services Cc, TFMC (Pty) Ltd, Tshwane Fire Sprinklers Cc and Whip Fire Projects (Pty) Ltd.
These companies allegedly reached an agreement around 1995 in terms of which ASIB would exclusively render fire sprinkler inspection services while the rest of the companies would exclusively provide fire sprinkler installation services. They further agreed that each company would provide their services only in provinces where they are based. This conduct amounts to division of markets by allocating specific type of services and territories which contravenes section 4(1)(b)(ii) of the Competition Act.
The matter emanates from the Commission’s investigation between 2014 and 2017 which included a dawn raid at the of these companies in August 2017. This investigation found that these companies had divided markets in contravention of the Competition Act. The alleged cartel conduct mainly affected property owners and occupants of big commercial and public buildings. 
The Commission has asked the Tribunal to impose an administrative penalty of 10% of each firm’s annual turnover. 
 
BACKGROUND
 
In February this year the Tribunal confirmed as an order a consent agreement between a fire control and protection systems company, Fireco (Pty) Ltd (Fireco) following the company’s admission to cartel conduct. In terms of the agreement, Fireco was fined an administrative penalty of R2 200 913.85 (Two Million, Two Hundred Thousand, Nine Hundred and Thirteen Rand and Eighty-Five cents).
The settlement arose from a Commission initiated investigation in March 2015 against Afrion Property Services CC, Belfa Fire (Pty) Ltd, Cross Fire Management (Pty) Ltd, Fire Protection Systems (Pty) Ltd, Fireco (Pty) Ltd, Fire Control Systems (Pty) Ltd, QD Air (Pty) Ltd and Technological Fire Innovations (Pty) Ltd for alleged price fixing, market allocation and collusive tendering in the market for the supply, installation and maintenance of fire control and protection systems.
In June 2015, the Commissioner amended the initiation complaint to include Fireco Gauteng (Pty) Ltd, QD Fire (Pty) Ltd and Keren Kula Mechanical (Pty) Ltd as additional respondents. In March 2017, the Commissioner amended the complaint again to include an allegation against Fireco and Fireco Gauteng. 
In March 2017, the Commissioner further amended the complaint initiation, to include Tshwane Fire Sprinklers CC as an additional respondent. 
Issued by: 
Sipho Ngwema, Head of Communication
On behalf of: The Competition Commission of South Africa
Tel: 012 394 3493 / 081 253 8889
 

 

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