THE Competition Tribunal yesterday found three vehicle-tracking companies - and the industry body - guilty of anti-competitive behaviour.
The tribunal found that Netstar, Matrix Vehicle Tracking, and Tracker Network - representing more than 90percent of the industry - and the Vehicle Security Association of SA (Vesa) contravened the Competition Act by setting standards that created barriers to entry.
This prevented competitors from entering the market and denied consumers the benefit of lower prices, greater choice and technological development.
The tribunal found the standards had an exclusionary effect and were "self-serving and irrational".
The case was brought to the tribunal by both the Competition Commission and the complainant in the matter, a firm called Tracetec.
Tracetec wanted to enter the stolen vehicle recovery (SVR) market because it believed that radio transmitter technology could be applied in the SVR market.
But based on the existing standards Tracetec was prevented from being admitted to the SVR category.
Vesa was an industry association for firms engaged in the vehicle security industry that, at the relevant time, had a sub-committee that set standards for admission to membership of its SVR category.
The tribunal concluded, based on evidence, that it was not possible for a firm to expand in the SVR market at the time - without having its product approved by Vesa in the SVR category.
This was because all the major short-term insurance companies, represented by their association, would not approve a customer installing a system that did not have Vesa approval.
The tribunal also noted, in its reasons that the SA Insurance Industry Association - representing all the large insurers and a large part of the rest of the industry - who had organised Vesa to set standards for the industry, did so not because of concerns for the consumer but for its own business interests.
The relief being sought by both the commission and Tracetec was limited to a declaration that the conduct constituted a prohibited practice.
All four defendants were liable for the costs of Tracetec. - Sapa