Competition Commission v. Board of Healthcare Funders of Southern Africa

The Competition Commissioner initiated a complaint and undertook an investigation into an alleged prohibited practice by the Respondent, Board of Healthcare Funders of Southern Africa. Respondent was an association that represented approximately 85% of medical aid schemes in South Africa that, among other things, determined, recommended and published benchmark tariffs for health care services annually. The Commissioner alleged that such conduct had the effect of fixing a purchase price in contravention of section 4(1)(b)(i) of the Competition Act, 1998.

The Commission found that the Respondent’s annual determination, recommendation and publishing of benchmark tariffs amounted to prohibited price fixing as contemplated in section 4(1)(b)(i) of the Competition Act. Such conduct had the effect of fixing a purchase price of certain health care benefits offered to members of the public. The Respondent disagreed with the Commission’s finding, but it nonetheless entered into a settlement agreement with the Commission in terms of which the former agreed to pay a penalty of R500 000. The Respondent further undertook to refrain from publishing a reference price list. This agreement was made an order of the Competition Tribunal in terms of section 49D of the Competition Act.

“The Respondent hereby undertakes to cease publishing a tariff, recommended scale of benefits or other form of price guideline for services rendered in the private healthcare industry. Without limiting or derogating from the aforegoing, the Respondent will be entitled to convert information that exists in the public domain into an alternative format for use by medical schemes. It is recorded that the Respondent has sent a letter to each of its members informing them that the Respondent shall no longer determine, recommend or publish tariffs for the provision of medical services.” Paras. 6.1, 6.2 and 6.3.