Competition Commission of South Africa Charges Wesbank and Toyota for Collusion

Competition Commission of South Africa Charges Wesbank and Toyota for Collusion
Photo: https://www.jacarandafm.com/news/news/wesbank-toyota-charged-car-loan-collusion/ 03.02.2022 1292

The Competition Commission has referred motor vehicle finance groups FirstRand Bank, Wesbank and Toyota Financial Services South Africa Limited (TFS) to the Competition Tribunal. 

The Commission’s investigation revealed that Wesbank and TFS entered into an agreement to divide markets by allocating customers or suppliers in the market for the provision of vehicle finance in contravention of section 4(1)(b)(ii) of the Competition Act. The motor vehicle finance market includes offering vehicle finance, leases, and dealerships financing. The Commission's press release reads:

“FirstRand Bank Limited (FirstRand), through its WesBank division, and TFS are involved in the provision of vehicle finance services. They are therefore supposed to compete. They, however, concluded a shareholder agreement which contains clauses that prevent them from competing.FirstRand, TSA Investment Holdings Limited and Toyota Motor Finance (UK) have 33.3% share each in TSA. They concluded a shareholder agreement which includes clauses that prohibit WesBank from offering vehicle finance to customers seeking to purchase vehicles at authorised Toyota dealerships”.

The agreement identifies the vehicles that Wesbank is prohibited from financing, and these are the ‘new’ Toyota, Lexus and Hino vehicles and any ‘used’ vehicles sold through any authorised Toyota dealership, except McCarthy Group. Such an agreement was deemed by the Commission to be a fact of market segmentation.

“This type of collusive conduct is harmful to the consumers as it deprives them of the benefits which arise from competition”, said the Commission. The competition watchdog has asked the Tribunal to fine the companies 10% of their turnover.

Source: Compcom.co.za

South Africa 

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