The Competition Commission has referred a case of market allocation in the retail property market to the Competition Tribunal for adjudication.

The referral followed an investigation into allegations that Erf 179 Bedfordview (Proprietary) Ltd, Liberty Group, Bedford Square Properties and Win Twice Properties colluded to divide markets by allocating customers and territories through two deeds of restraint.

All of these respondents compete in the retail property market around the Bedfordview area.

Erf 179 owns Village View Shopping Centre, while financial services group Liberty owns Eastgate Shopping Centre, and Win Twice and Bedford Square are subsidiaries of HBW Group (Pty) Ltd, both of which own Bedford Square Shopping Centre.

The case was initiated in 2009, following information received by the commission from a complaint, and subsequent leniency applications from Bedford Square and Win Twice.

The commission's investigation established that Bedford Square was being prevented from concluding lease agreement with Woolworths or Mica Hardware Store for a period of 11 years, starting from November 2003.

The Win Twice restraint, which commenced from July 2004, prevented Win Twice from concluding a similar lease agreement for a period of 15 years. The commission investigation concluded that these restraints contravened section 4(1)(b)(ii) of the Competition Act in that they amounted to division of market by allocating customers or territories.

The commission has since entered into a settlement agreement with Liberty, which was confirmed by the tribunal this week. The commission has asked the tribunal to impose an administrative penalty on Erf 179.

The commission noted that there were pending proceedings in the North Gauteng High Court and an interim relief application in the tribunal between Erf 179 and Bedford Square pertaining to the restraints that were the subject matter of the commission's referral.

Source: I-Net Bridge