Economist: Tough for CompCom to prove cargo shipping price-fixing
An economist believes it would be challenging for the Competition Commission to prove that eight cargo shipping companies allegedly engaged in price fixing.
The commission has referred a complaint against the global firms to the Competition Tribunal.
They are accused of fixing general rate increases on routes linking South Africa with Asia and West Africa.
The alleged collusion spanned from 2008 to 2018, with identical rate hikes applied to routes including Shanghai, Ningbo, Shekou, and Durban.
Companies under investigation include Maersk South Africa, Mediterranean Shipping Company, CMA CGM, Pacific International Lines, Mitsui O.S.K Lines, Evergreen Agency, COSCO Shipping Lines, and K Line Shipping South Africa.
Chief economist at the Efficient Group, Dawie Roodt, says a way to prove the alleged price fixing would be to obtain a document in which the various parties explicitly agree to raise prices by a specified percentage.
" Now that piece of paper doesn't exist, so you have to make use of circumstantial evidence, or you have to make use of some kind of other evidence if you want to prove that there was some kind of collusion. The fact that prices increase at the same rate does not necessarily mean there was some sort of collusion.
"These players face similar conditions in the market, and if they are all relatively productive and good at what they're doing, then their price increases will be similar because the market conditions are similar. In order for the competition commission to actually prove that there was collusion, this is not going to be easy. You need to find a smoking gun. And a smoking gun is quite difficult to find."
He says that if the allegations are proven true, companies may avoid South Africa and view the Competition Commission as overly aggressive.
" Create an environment that is conducive to business, and it doesn't only go to this kind of business; it goes to everything. So, make it easy for anybody to participate in the South African economy."
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