Victron settlement agreement worth R14m referred to tribunal

18 Jun 2024

The Competition Commission (Commission) concluded a settlement agreement worth R14 232 581 with Victron Energy B.V. (“Victron”) to the Competition Tribunal (“Tribunal”) on 06 June 2024. The settlement agreement is in respect of the Commission’s complaint referral against Victron for alleged minimum resale price maintenance.

On 11 December 2023 the Commission referred a complaint against Victron to the Tribunal for allegedly engaging in the practice of minimum resale price maintenance from March 2020 to at least the end of 2022 in contravention of section 5(2) of the Competition Act (89 of 1998), as amended. Victron develops and sells electric power conversion products for mobile and other off-grid applications which includes products such as sine wave inverters, sine wave inverter/charges, battery chargers, DC/DC converters, transfer switches, battery monitors, batteries, solar panels, solar charge regulators and many more.

In its complaint referral the Commission alleged inter alia that Victron largely relied on its distributors to implement and to enforce the practice of minimum resale price maintenance in respect of Victron products sold by online stores to end users in South Africa. The Commission further alleged that Victron published a recommended retail price list on its website from time to time and provided updated pricelists to its distributors on a quarterly basis. Although the list indicated that it is a recommended price, Victron, in practice insisted on a maximum discount from its recommended retail price list when the Victron products are sold to end customers by online stores.

In addition, it was alleged that Victron instructed its distributors to ensure that its online store customers comply with the maximum discount practice by threatening to either lower the discount provided to the distributor by Victron or by stopping supply to the distributor. The distributor would then in turn use similar threats of either lowering the discount provided to the online store by the distributor or by stopping supply to its online store customer to ensure compliance.

During the investigation Victron asserted that the principal objective of the pricing discussions was to address the issue of end customers being sold Victron products without being provided with the appropriate after-sales and technical support and it has denied liability for a contravention of the Competition Act. The Commission maintained that the conduct amounts to a contravention of section 5(2) of the Competition Act regardless of any justifications that may be proffered by the firm involved.

In terms of the settlement agreement, Victron does not admit that it contravened the Competition Act, but has agreed to pay R14 232 581 and, to ensure compliance with the Competition Act going forward, implement a competition law compliance program in respect of all its employees, management, directors and agents who participate in any commercial activities in South Africa.

The settlement agreement has been referred to the Tribunal and once confirmed, will bring to an end the complaint referral proceedings currently before the Tribunal against Victron.

Article sourced from The Competition Commission South Africa.

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