October 18, 2004
By Roy Cokayne
Bill Rawson, the institute's president, said yesterday it a reached a verbal agreement with the commission last week about the penalty but a consent order had not yet been signed.
Rawson's comments follow the commission's statement on Friday that the institute would be prosecuted for contravening the Competition Act by indirectly fixing the selling prices of various services provided by estate agents.
This included the 7.5 percent estate agents' commission recommended by the institute to its members.
Menzi Simelane, the commissioner of the competition commission, said the price at which estate agents' services were available in the market was largely determined or influenced by tariffs contained in the institute's tariff book, and had resulted in indirect price-fixing and the elimination of the competitive process in contravention of the act.
Rawson said he was "totally amazed" at the commission's conduct in its investigation into the institute, adding that it was "unfair" and "unprofessional" of the commission not to give the institute time to comment on its statement.
He said that contrary to legal opinion it had obtained, the institute had entered into discussions with the commission on the contravention of the act.
The institute had an agreement with the competition board, the predecessor to the competition commission, dating back to about 1984. The competition board had advised the institute to use recommended rates and tariffs.
Rawson said the new Competition Act made the institute guilty of an offence but it had last published a tariff list in 2002, and had immediately passed a resolution abolishing the tariff guidelines when the prosecution of other professional bodies by the commission was brought to its attention by the press.
"Suddenly, the competition commission then says we were guilty of a contravention of the act and subpoenaed all our records. We complied and co-operated fully."
Rawson said it was agreed with the commission last week that the institute would pay an administrative penalty of R100 a member rather than incur "tremendous legal costs" fighting the commission.
However, he emphasised that in terms of the Competition Act there was an obligation on the commission and the department of trade and industry to educate consumers.
"They have failed to do that. We're the department's consumer in the industry. What has the department done since 1997 to educate its consumers?"
Rawson said the rates guidelines the institute had provided to its members had always been negotiable, there had not been any complaint from the public and the commission's actions amounted to "abuse".
He said: "They beat up the institute. The message is 'do not fight us, agree with us'. They are a cash cow for the government and are supported by legislation."
By Roy Cokayne |
