The Competition Tribunal is withholding a ruling on a settlement agreement suggested by two companies that admitted they rigged a bid for a tender issued by Broadband Infraco, pending further investigation.
Last week, the tribunal heard an application for confirmation of settlement agreements between the Competition Commission and Aztec Components and Lambda Test Equipment. However, the tribunal has requested additional information and inquiries before making a ruling.
In 2010, Broadband Infraco issued a tender for the supply of production equipment that measured and tested links on long-distance telecoms network during commission, repairs, maintenance and upgrades.
The settlement agreement came after Broadband Infraco lodged a complaint against Aztec and Lambda alleging that Lambda and Aztec contravened the Competition Act by ? while being competitors in the market for the production and supply ? discussing prices and sharing commercially sensitive information with regards to the tender.
Mark Wesley, appearing for the two firms, explained during the hearing that Aztec approached Lambda and asked for assistance on the technical side and for the purchase of the equipment from Lambda, meaning Lambda assisted in the preparation of the Aztec quote. "Lambda then decided independently that it ought to put in a tender. It didn't know what Aztec's final tender looked like; it had given from its side its quotation to Aztec, but it then decided that it would put in its own tender, and obviously the technical solution would be the same and it used then the prices that it had sold to [Aztec]."
Neither Aztec nor Lambda was awarded the tender which was originally valued at R12 million. The tender was later withdrawn and re-advertised for R6.23 million and awarded to Willcom.
The companies suggested a settlement agreement in which each will pay an administrative penalty of R100 000 and agree to "develop and implement a compliance programme incorporating corporate governance, designed to ensure that its employees, management, directors and agents do not engage in conduct in contravention of [the Act]".
Tribunal chairman Norman Manoim wanted to know if it was investigated whether Aztec and Lambda did not in fact collude with Willcom and submitted bids just to "fill up the room" and not actually compete. Manoim pointed out that it is odd that Lambda did not drop its price if it was going to compete with Aztec, seeing as the company was in a "tremendously advantageous position" having assisted in the preparation of the Aztec quote.
Manoim requested that the Competition Commission investigate whether the two firms were involved in other bids jointly in the telecoms industry, "as there may be more to this than meets the eye", before the tribunal makes a decision on the settlement agreement.
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