Wesbank and Toyota Financial Services facing fines for alleged car loan collusion
The Competition Commission has referred FirstRand Bank Limited (FirstRand), Wesbank, and Toyota Financial Services South Africa (TFS) to the Competition Tribunal for prosecution on allegations of dividing the market by allocating customers or suppliers.
This comes after it investigated an agreement between Wesbank and TFS, which the commission contends divided markets by allocating customers or suppliers for the provision of vehicle finance.
The commission said this was in contravention of section 4(1)(b)(ii) of the Competition Act 89 of 1998, as amended.
“FirstRand Bank Limited (FirstRand), through its WesBank division and TFS are involved in the provision of vehicle finance services. They are therefore supposed to compete,” it explained.
“They, however, concluded a shareholder agreement which contains clauses that prevent them from competing.”
Under the agreement, WesBank was prohibited from offering vehicle finance to customers seeking to purchase vehicles at authorised Toyota dealerships.
The agreement identifies the vehicles that Wesbank is prohibited from financing, including “new” Toyota, Lexus, and Hino vehicles and any used vehicles sold through authorised Toyota dealerships, except McCarthy Group.
“This arrangement constitutes market division by allocating customers or suppliers in contravention of section 4(1)(b)(ii) of the Act,” the commission said.
“This type of collusive conduct is harmful to the consumers as it deprives them of the benefits which arise from competition.”
“Such agreements are inherently inimical to competition, and the Commission has asked the Tribunal to fine the companies 10% of their turnover.”
FirstRand, TSA Investment Holdings and Toyota Motor Finance (UK) each have a 33.3% share each in Toyota Financial Services South Africa.
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