🇿🇦 I am not entirely convinced by the authorities’ approach to the matter involving Global Roofing Solutions (GRS), a supplier of roofing products.
The Competition Commission South Africa established (and the Competition Tribunal of South Africa confirmed) that GRS is not a dominant firm, and had not contravened the Competition Act, 1998. Despite this, a non-exclusivity remedy was imposed.
Before the remedy was imposed, GRS customers had to use GRS clamps for their roofing products (solar panels) because the competitors' clamps did not meet GRS's quality standards, and using them would void the warranty.
Despite GRS’ non-dominance and adherence to the Act, the Commission imposed (and the Tribunal confirmed) the following remedies:
● for GRS to provide a warranty on roofing products even if 3rd party solar clamps had been used; and
● for GRS to retain the right to deny warranty claims if any deterioration or failure of products supplied by GRS had been caused by 3rd party clamps that do not meet its technical and material standards or installation methods.
Comment:
● The authorities appear to both acknowledge and disregard the importance of quality products in the market by (i) finding GRS innocent but (ii) imposing remedies aiming to promote the use of low quality products.
● The use of quality clamps is a critical competitive factor in the market due to the high price of solar panels, which are paid for by end consumers.
● Moreover, a quality-based regime is critical in the residential built environment where structural failures could be fatal. We have seen this in George in the Western Cape 6 months ago.
● The complainant, Metal Roof Innovations (MRI) does not require GRS as a “route to market” because GRS is not dominant. Moreover, MRI is a USA subsidiary which is presumed to be well-resourced (in any event, sufficiently so as to improve clamp quality).
● As in Sekunjalo, the authorities are again insisting that “high risk” players be entertained by other players in the market in the name of “competition” with no regard to the extent (or the bearers) of the actual risk.
● One of the goals of an exclusivity warranty is to “prevent rather than cure”. The authorities' remedy encourages structural failure over prevention. Worse still, it leaves the consumer without recourse, because the warranty now excludes the very failure that it contributes to.
● Who are GRS' competitors, and must they also entertain low quality clamps as part of their warranty programs? If not, GRS will be worse off.
● Why not simply requiring the use of a SABS approved clamp?