The Competition Commission has referred for adjudication two complaints involving possible collusion and collective abuse of dominance against five vehicle-tracking and recovery companies.
The complaints, which are also against 15 gearlock and electronic alarm/immobiliser manufacturers, are being referred to the Competition Tribunal.
A statement issued by the commission yesterday says these companies are members of the Vehicle Security Association of SA (Vesa), allegedly the only standards and regulation body dedicated to promoting and protecting the vehicle security industry and consumers in SA.
The commission`s investigation followed complaints lodged against these companies by Tracetec and CB Radio Installation Services.
Tracetec, which operates a vehicle and movable asset identification, tracking and recovery system, alleged that Netstar, Matrix Vehicle Tracking, Tracker, Global Telematics (Orchid) and Bandit are using the Vesa committees as a platform for collusion and collective abuse of dominance within the vehicle-tracking system industry.
Collectively, these respondents hold almost 100% of the relevant market of supplying products and services for the tracking and recovery of motor vehicles in SA. This makes them the only significant competitors in this market, the most dominant players being Netstar with 46.2% and Tracker with 39.8% market share.
Furthermore, it is alleged these companies within the Vesa Stolen Vehicle Recovery Committee determine the membership criteria for Vesa accreditation, raising barriers to entry into Vesa. It is also alleged that it is almost impossible for other competitors to enter this market without Vesa accreditation, as its accreditation is required to qualify for insurance-related work.
The commission`s investigation established there were contraventions of the Competition Act, but only the Competition Tribunal can make the determination on whether the respondents are guilty or not.
"It appears that Vesa members within the Stolen Vehicle Recovery Committee agreed on accreditation requirements for new applicants into the committee in a manner that excluded any new entrants to the market from receiving Vesa approval," states the commission.
It was also found that the respondents have engaged in a restricted horizontal practice in that the agreement between, or concerted practice by, the respondents impeded or prevented Tracetec and other competitors from entering or expanding within this market.
"This exclusive conduct in the industry further entrenched the dominance of Netstar and Tracker to the detriment of other competitors or potential competitors," notes the Competition Commission`s statement.
The commission has asked the tribunal to declare the conduct of Netstar, Tracker, Matrix, Orchid and Bandit as prohibited practices and illegal.
No one from Vesa was available to comment today, while Netstar and Tracker would not comment.
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