Wednesday 13 December 2017

S/Africa’s competition commission accuses football agents of “price fixing”

S/Africa’s competition commission accuses football agents of “price fixing”
(APA 10/12/17)

APA-Johannesburg (South Africa) - The Competition Commission of South Africa has taken the South African Football Intermediaries Association (Safia) and 36 members of the body representing soccer agents to a tribunal in relation to alleged price-fixing in the sport.

The commission referred the agents to the Competition Tribunal for prosecution following an investigation into their activities found that they were overcharging their clients by seven percent in defiance of a Fifa recommendation to charge only three percent.

The body said that its investigation had indeed revealed that, among other things, “Safia and its members agreed to charge soccer players and coaches a standard 10 percent commission fee when negotiating and concluding new contracts‚ transfer contracts‚ and renewal contracts with football clubs;

“The agents also charge football players and coaches a standard 20 percent commission fee when negotiating and concluding new commercial contracts and renewal of those contracts with sponsors; and that they use Safia as a platform for this collusion.

“In referring the matter to the Tribunal for prosecution‚ the Commission is seeking an order declaring that Safia and its members have contravened the Competition Act. The Commission also wants Safia and its members to cease from engaging in this conduct and similar conduct in future.”

The commission’s spokesperson Sipho Ngwema said the fixing of a commission rate at any level was against the notion of competition.

“They (agents) sat together and agreed as competitors to fix the price. That’s where the problem comes in terms of competition. When parties are supposed to be competing‚ as agents‚ their rates should not be the same. If they are, it’s fixing.

“You can apply that to all facets of business life. For example, makers of Coke can’t sit with makers of Pepsi and say this is going to be the rate. That’s price fixing,” Ngwema said.

Explaining the background to the issue, the commission said: “In May 2015‚ the South African Football Association (Safa), acting on instructions of Fifa, sought to regulate the affairs of football agents‚ including reducing the current 10 percent commission to 3 percent Safia blocked this attempt through a court interdict.

“In July 2015‚ the Commission received a complaint from Safia against Safa. Safia alleged that the 3 percent cap introduced by Safa constitutes fixing of an agent’s fee in contravention of the Competition Act.

“Following an investigation‚ the Commission decided not to prosecute Safa. Instead‚ the Commission decided to launch an investigation in December 2015 against Safia and its members for fixing the 10 percent commission they charge football players and coaches.”

Responding to the call for their prosecution, Tim Sukazi of Quality Talent Sports said: “I reserve my comment as the matter is sub-judice.”

The two parties now await a trial date from the tribunal.

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