South African steel giant Mittal Steel has contravened the Competition Act by charging excessive prices, the Competition Tribunal ruled on Tuesday.
It found that the company contravened Section 8(a) of the Competition Act by charging an excessive price for its flat steel products to the detriment of consumers.
The tribunal, however, dismissed a complaint that Mittal Steel contravened the Act by inducing its customers not to deal with a competitor.
The facts presented on the second matter were not satisfactory, the tribunal said.
”We would want to proceed with particular care on an inducement allegation.”
The tribunal postponed a decision on penalties for the company’s contravention.
It said it needed to hear further evidence in connection with the extent, if any, of the administrative penalty to be imposed.
”Although the record is complete in regard to the remaining remedies … we consider it undesirable to consider remedies in a piecemeal fashion.”
Harmony Gold and Durban Roodepoort Deep have filed a complaint against Mittal Steel and Macsteel International Holdings BV.
Harmony alleged that Mittal SA was a dominant firm in the domestic market for flat primary steel products and that it had abused this dominance by charging, in contravention of the Competition Act, excessive prices for its flat steel products.
The complainants also claimed Mittal SA contravened the Act, in that it required or induced customers to not deal with a competitor.
Mittal Steel expressed disappointment at the ruling that it had contravened the Competition Act by charging excessive prices.
The company, however, welcomed the dismissal of the complaint that it induced its customers not to deal with a competitor.
Mittal Steel chief executive Rick Reato said the company’s legal team would study the reasons for the judgement once it had received a copy from the tribunal.
”We currently are unable to comment further on the ruling until we have seen the reasons for the judgement. We believe however, that we have a strong legal case and will be considering our legal options,” Reato said.
Harmony welcomed the ruling, describing it as a landmark decision.
”It’s been a long haul, but knowing what an unashamedly cost-conscious mining house like Harmony stood to gain from lower steel prices … made the battle worthwhile,” said chief executive Bernard Swanepoel.
”The little guys who didn’t have market power or alternative supply markets suffered at the hands of Iscor and later from Mittal’s unilateral, monopolistic behaviour for many decades.”
The decision would change the way some industries in South Africa did business, Swanepoel said. – Sapa