The Supreme Court of Appeal (SCA) has dismissed the appeals brought by vehicle tracking company, Tracetec, and the Competition Commission (Commission) against the February 2011 decision of the Competition Appeal Court (CAC).

In 2005, Tracetec lodged a complaint with the Commission against Netstar, Matrix Vehicle Tracking and Tracker, alleging that the three companies, which together enjoy over 90% of the market, were forcing competitors out of the market. Tracetec alleged that the three companies, through the Vehicle Security Association of SA (VESA), contravened the Competition Act by setting standards for VESA membership and accreditation that created barriers to entry as newcomers to the industry could not satisfy the set standards. Tracetec argued it had not been able to become VESA accredited, which meant it could not grow its business because of the fundamental importance insurers attached to such accreditation.

The Competition Tribunal (Tribunal) found that the three companies were preventing competition in the industry and denying consumers lower prices. The CAC disagreed, setting aside the Tribunal's decision and dismissing both the Commission and Tracetec's complaints against the three companies.

The CAC's decision was taken on appeal by the Commission and Tracetec. The SCA dismissed the applications and awarded costs to Netstar, Matrix Vehicle Tracking and Tracker, which are likely to run into several million rands in legal fees.

Written by: Chris Charter, Director, Competition, Cliffe Dekker Hofmeyr

Kayley de Oliveira, Associate, Competition, Cliffe Dekker Hofmeyr