The Namibian Competition Commission (NaCC) plans to institute legal action against office automation equipment suppliers, Maxes Office Machines and South African-based Riso Africa for contravening the Namibian Competition Act.
This comes as the two companies were found to have entered into an exclusive distributorship agreement, which prevents interested distributors from trading in the supplying of Riso Africa’s office printing equipment and associated products, as well as providing after-sale services to those products.
“In terms of the conduct, the Respondents have entered into an exclusive distributorship agreement, which has been in existence since 1996. The exclusive distributorship agreement designated Maxes as the sole distributor, service provider and retailer of Riso Africa’s office printing equipment, associated products and services. This type of conduct creates barriers to entry into the market. The exclusive agreement prevents interested distributors from trading in the supplying of Riso Africa’s office printing equipment and associated products, as well as providing after-sale services to those products.
“The Commission is of the view that this exclusive distributorship agreement is harmful to fair competition,” NaCC Spokesperson Dina //Gowases said on Friday.
This comes as the competition watchdog had instituted an investigation centered on the distribution of digital duplicators which are used for mass printing, used in schools, government offices such as the Directorate of Education and other public and private institutions that require mass printing.
“There are, however, other products available in Namibia such as Duplo, Ricoh and Nashua which compete with the Riso digital duplicators. However, the Commission’s investigation found that the Riso digital duplicators make up a substantial part of the market. The Commission’s investigation further found that, as a result of the exclusive agreement, there is no intra-brand competition as far as the distribution of the Riso-related products is concerned. On the other hand, however, intra-brand competition was found to exist between other brands of digital duplicators. Other brands are also not distributed through exclusive distributorship agreements and any interested party can distribute such brands,” she said.
The Commission said it was seeking a court order, ordering the Respondents to cease with the conduct; restraining the two companies from engaging in the conduct in future; seeking an appropriate pecuniary penalty against the companies in terms of the Competition Act, an order that the two companies pay the costs of the proceedings and “any alternative relief as the Court may consider appropriate.”
