BUSINESS MAVERICK: Shining a spotlight on Covid-19 price gouging

To date, over 1,600 complaints have been lodged and overBetween April and early July 2020, the authorities’ Covid-19 excessive pricing investigations had yielded settlements to the value of R14-million, of which R5.5-million has been donated to the Solidarity Fund.

The company did not admit “guilt”, but did conclude a settlement agreement with the Commission and has donated essential goods to the value of R243,000 to three community benefit organisations and a further R44,000 to theBrights Hardware on the West Coast agreed to donate R6,074 to the Solidarity Fund, and reduce its gross margin on FFP1 dust face masks to an agreed maximum percentage after the Commission found it had allegedly charged excessive prices for face masks during March 2020.

They did not admit liability, but did settle with the Commission and agreed to make a contribution to the Solidarity Fund or other causes.What has been particularly unusual has been the competition authorities’ approach to assessing dominance during the pandemic. Many of these firms would not – in ordinary circumstances – meet the market share thresholds for dominance for purposes of the Competition Act.

“This, for example, could be as a consequence of panic buying during a period of crisis where goods and services are limited, and consumers are restricted in terms of movement,” he says. “One would usually not regard customers of a small hardware store, pharmacy or seller of ginger to be price takers with no other alternatives or as being captive to those retailers.

It’s also worth noting that the penalties have been structured as contributions to the Solidarity Fund so may not truly fall within the definition of an administrative penalty under the Competition Act, which is ordinarily paid to the National Revenue Fund.

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