Ten automatic fire sprinkler installers conclude settlement agreement with competition authorities

25th May 2022 By: Schalk Burger - Creamer Media Senior Contributing Editor

Ten installers of automatic fire sprinklers, which were implicated in a cartel case currently being heard before the Competition Tribunal, have concluded separate settlement agreements after being afforded an opportunity by the tribunal to settle the matter with the Competition Commission.

The agreements have been confirmed as orders by the tribunal, which means the firms will no longer be prosecuted, as the agreements constitute a full and final settlement of all proceedings between the firms and the commission.

"In terms of the [initial] nine settlement agreements, the firms have not admitted that they contravened the Competition Act by dividing markets, which they were accused of by the commission. However, they have agreed to pay separate administrative penalties, collectively totalling more than R2-million," the tribunal said in a May 25 statement.

Further, in September 2021, Jasco Security and Fire Solutions also settled with the commission. Although Jasco agreed to pay a R300 000 administrative penalty, it also did not admit to having contravened the Competition Act.

"This brings to ten the total number of firms that have settled in this matter. In addition, the commission earlier withdrew its case against one of the accused firms, leaving seven firms that are being prosecuted in the cartel case. These firms opted not to settle with the commission and are contesting the matter before the tribunal," the tribunal said.

The commission agreed to enter into the settlement agreements without admissions of liability based on a combination of factors, including that it is incentivising these firms to discontinue from adhering to any Automatic Sprinkler Inspection Bureau (ASIB) rules that divide the markets as part of its strategy to end the alleged anti-competitive conduct occasioned by these rules in the market for installation and inspection of automatic fire sprinklers.

Other considerations include that some of the firms are small players in the affected market and the majority of these firms have not been found to have contravened the Act before, the tribunal said.

Further, among others, the firms undertake not to agree or adhere to any ASIB rule which would preclude them from operating in any geographic region and, should the firms wish to enter the market for the provision of inspection services, which is allegedly reserved for ASIB, they undertake not to restrict their right to do so by agreeing with any actual or potential competitors in that market or with ASIB to restrict such activities, said the tribunal.

"The firms undertake not to restrict their sourcing of inspection services from only ASIB, provided it is commercially viable to do so, and will develop, implement and monitor competition law compliance programmes. The firms also commit to competitive practices and refraining from engaging in any anti-competitive conduct in contravention of the Competition Act," the tribunal said.