On November 10 2011 the Competition Commission announced that it had entered into a settlement agreement with Apollo Tyres South Africa (formerly Dunlop), in which Apollo admitted that it took part in a tyre manufacturers' cartel and agreed to pay a penalty of R45 million.

Apollo admitted that it was involved in cartel conduct, whereby the main South African tyre manufacturers agreed on pricing and price increases at what they referred to as 'coffee table talks'.

The settlement agreement follows the commission's referral on September 6 2010 of the findings of its investigation against the South African Tyre Manufacturers Conference (Pty) Ltd (SATMC) and four local tyre manufacturers and suppliers (Apollo, Goodyear South Africa (Pty) Ltd, Continental Tyre South Africa (Pty) Ltd and Bridgestone South Africa (Pty) Ltd) to the Competition Tribunal for adjudication (for further details please see "Commission refers tyre price-fixing complaint to tribunal"). Bridgestone was granted conditional immunity by the commission following its application for corporate leniency and its cooperation pursuant thereto.

The commission initiated the investigation following a complaint lodged by a fleet owner, alleging that the local tyre manufacturers simultaneously adjusted their prices around the same time and within the same parameters. This was followed by a search and seizure operation on the premises of Bridgestone, Apollo and SATMC on April 4 2008. Subsequently, Bridgestone applied for and was granted conditional immunity from prosecution.

The cartel concerned the manufacture and supply of passenger tyres, light truck/commercial tyres, truck and bus tyres, off-road tyres, agricultural tyres and earthmover tyres in South Africa. The commission's investigation revealed that the cartel operated from 1999 to at least 2007. It further found that the SATMC was used as a platform to conduct its discussions.

The R45 million penalty represents 4.75% of Apollo's 2008 turnover.

The commission has filed an application for the confirmation of this settlement agreement with the tribunal.

For further information on this topic please contact Daryl Dingley at Webber Wentzel by telephone (+27 11 530 5000), fax (+27 11 530 5111) or email ([email protected]).