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Spring Lights fined for price-fixing

Sasol's black economic empowered gas company, Spring Lights, has agreed to pay R10m for its anti-competitive agreements with Sasol Gas that resulted in market division and price-fixing.
Spring Lights fined for price-fixing

As part of Spring Lights' consent agreement with the Competition Commission, the company agreed to put several measures in place to prevent its conduct being misconstrued as price-fixing in future.

This includes the resignation of Spring Light directors - who were active in Sasol Gas - from its board.

Spring Lights applied to the commission for an exemption of the act in terms of the market allocation clauses in the agreements, on the basis that it promotes the ability of small businesses, or firms controlled by previously disadvantaged people, to become competitive. Until the exemption is granted the clauses may not be enforced.

The Competition Tribunal on Thursday (11 April) confirmed the consent order and fine that represented 3% of Spring Lights' 2008 turnover.

Spring Lights acquired a share of Sasol Gas and entered into a range of agreements aimed at allowing it to get gas from Sasol Gas and receive administrative assistance, including access to international and local energy price indices.

The commission started its investigation in 2008 following an application for corporate leniency from Sasol on behalf of Sasol Gas.

It found that Sasol Gas had supplied gas to Spring Lights, but restricted the empowerment company to only buying products from Sasol.

The commission found that a range of agreements had effectively divided the market through the allocation of customers and territories for its piped gas. Through the administration agreements Sasol Gas was paid a service fee for maintaining a database of indices and ensuring that price adjustment intervals were complied with.

These agreements had the effect of price-fixing.

Spring Lights has subsequently secured independent service providers to administer the pricing database and analyse the economic data that drives the gas price adjustments. Sasol Gas no longer provides any administrative or support services to the company.

Source: Business Day via I-Net Bridge

Source: I-Net Bridge

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