A local industrial automation company has alleged that two larger companies are breaching competition legislation by acting in concert to prevent it from securing business-critical products so as to eliminate it as competition.
The allegations have been made by Protea Automation Solutions, which reports that it has lodged a complaint with the Competition Commission against JSE-listed EOH and London-listed supplier Invensys.
Protea CEO Gary Johnston claims that it has built up the market for Foxboro and Eurotherm industrial automation products and systems over six decades during a time when Invensys, the company that owns the brands, did not wish to enter the South African market directly.
“Now Invensys is using EOH as an inter- mediary to prevent the supply of products we need to serve our customers, many of whom require system upgrades costing millions of rands,” Johnston alleges, arguing that the behaviour constitutes an abuse of market power.
“We are seeking a significant fine. We are also seeking compensation for the loss of contracts that we suffered as a result of the lack of business-critical products,” he says.
“We want the Competition Tribunal to determine the rights of local companies to retain the market they have worked hard to establish [so that they are protected from] suppliers or international parent companies aiming to take over the local market share,” says Johnston.
The Competition Act governs the abuse of market dominance, an example of which is the court ruling which determined that fixed-line operator Telkom had abused its market dominance by asking for high prices for services to competitors.
EOH did not respond to enquiries from Engineering News, while Invensys said that its lawyers would study the allegations before responding.
The Competition Commission confirmed the submission of the charge was made in September, but the Competition Tribunal had not heard the interim relief case yet.