Firms face hefty penalties for alleged windscreen price fixing cartel

SOUTH Africa’s automotive glass market is heading for a legal showdown after the Competition Commission formally referred a price-fixing case to the Competition Tribunal, accusing two major suppliers of colluding on prices for more than two decades.

The referral for prosecution took place on Tuesday.

The companies at the centre of the referral — PG Glass and Glasfit — are key players in the supply, distribution and fitment of laminated and toughened automotive glass across the country.

According to the Commission, the firms allegedly entered into an agreement, or engaged in co-ordinated conduct, to fix the prices of automotive glass products sold to motorists and insurance companies.

The watchdog’s investigation found what it describes as a longstanding arrangement in which prices were increased annually by the same percentage — a pattern regulators say points to collusion rather than coincidence. The alleged conduct dates back to 2004 and, if proven, would amount to a contravention of section 4(1)(b)(i) of the Competition Act, which prohibits price fixing among competitors.

"Automotive glass forms part of industrial intermediary products, a priority sector for the Commission. Dismantling of the alleged cartel will contribute towards fairer pricing of automotive glass for the benefit of consumers as well as insurance companies,” said Commissioner Doris Tshepe.

The Commission is seeking a ruling that the firms contravened competition law and an administrative penalty of up to 10% of each company’s annual turnover, one of the heaviest sanctions available under the Act.