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Tracking firms win competition appeal

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SA's Competition Appeal Court this week overturned a decision by the Competition Tribunal that found three tracking companies guilty of breaking competition rules.

Last April, the tribunal found Altech Netstar, Matrix Vehicle Tracking (now MixX Telematics) and Tracker Network set standards that prevented new companies entering the sector. The three companies together control over 90% of the market.

On Tuesday, the appeal court overturned the tribunal's April 2010 decision. Acting appeal judge Malcolm Wallis found the tribunal had erred in its interpretation of the evidence and that the “evidence before the tribunal did not sustain the factual basis for the [Competition] Commission's complaint”.

No basis

The commission referred a case against the three companies to the tribunal, after rival stolen vehicle recovery company Tracetec lodged a complaint in 2005.

Tracetec alleged the three companies and the Vehicle Security Association of SA (VESA) contravened the Competition Act by setting standards that created barriers to entry. Tracetec argued that it had not been able to become VESA accredited, which meant it could not grow its business.

The tribunal ruled that the three companies were preventing competition in the sector, and denying consumers lower prices. No penalty was imposed, but the ruling paved the way for a civil case to be brought against the respondents.

However, this week Wallis found Tracetec's grounds of complaint were unfounded. “In my view, there was not sufficient basis in the evidence for the tribunal to conclude that there was a substantial prevention or lessening of competition in the market,” said Wallis.

Altech CEO Craig Venter says the judgment vindicates Netstar, an Altech subsidiary. “We did not contravene the Competition Act, or engage in any behaviour to lessen competition in the vehicle tracking industry.”

Venter adds “businesses are publicly tarnished” when the competition authority finds them guilty of anti-competitive behaviour.

Altech Netstar MD Harry Louw says the decision is welcome. “It has always been our view that we were not operating in transgression of the law.” He says the decision “allows us to move forward and focus on growing our business, without being side-tracked by issues that should not have occurred in the first place”.

The appeal court set aside the tribunal's findings, dismissing it with costs.

Related story:
Slap on the wrist for tracking firms

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