Commission embarks on dawn raids in September and October

The Competition Commission (Commission) has been embarking on dawn raids with increasing frequency. September saw two dawn raids being conducted in the space of one week, one involving recruitment agencies and the other furniture removal companies. Only two weeks later the Commission raided the offices of various liquefied petroleum gas suppliers (in respect of an investigation into deposits charged for gas cylinders – an investigation unrelated to the current inquiry being conducted by the Commission into this market).

Dawn raids entail the Commission searching for and seizing, documents and information which will advance its investigation into whether the firm being raided has contravened the Competition Act, 1998 (the Act). Of course, this occurs whilst being observant of the firms’ rights and within the bounds of s48 of the Act.

The Commission’s dawn raid at the Bloemfontein and Port Elizabeth premises of Stuttafords Van Lines Proprietary Limited (Stuttafords), Pickfords Removals SA Proprietary Limited (Pickford), the Bloemfontein premises Afriworld 142 Proprietary Limited (Afriworld) and Cape Express Removals Proprietary Limited (Cape Express Removals) in Cape Town relates to on-going investigation, dating back to 2010, into the market for the provision of furniture removal services.

Interestingly, the above named furniture removal companies have been investigated before by the Commission. Despite previously settling with the Commission, this dawn raid is the second for Cape Express since the launch of the Commission’s investigation into this market.

As far as Pickford and Afriworld is concerned, this dawn raid comes at a time when the referral of its collusion charge arising from the Commission’s initial investigation has yet to be heard by the Tribunal. The Commission has concluded its initial investigation into Stuttafords and the matter is also set to appear before the Tribunal once the Commission refers the matter.

The furniture removal companies’ alleged continued involvement in transgressing conduct is surprising, especially since these companies are by now fully au fait with the consequences of contravening the Act. The Commission is likely to request strict penalties be imposed on these repeat offenders and this is a specific consideration in terms of the Act when determining administrative penalties.