Mauritius Brief – 06/08/2010

6 August 2010|In Mauritius Briefs

In this issue:

  • CCM releases report on travel agents service fees

CCM releases report on travel agents service fees

The Competition Commission of Mauritius (“CCM”) has recently published its report on its investigation into travel agents’ service fees in which it has found that Air Mauritius Ltd. (“Air Mauritius”) and The Mauritius Association of IATA Travel Agents (“MAITA”), an association grouping some 25 IATA accredited travel agents in Mauritius, have infringed Section 41 of The Competition Act 2007 (“The Act”), which prohibits collusive agreements.

The report mentions that the two entities had jointly agreed on the price charged for reservations, bookings and ticket issuing facilities offered by Travel Agents (“service fees”) for various categories of tickets, resulting in a higher price in the market.

Unusually, the agreements in relation to service fees occurred prior to the commencement of the Act, and although they were not a breach at the time they were entered into, the CCM found that there continues to be a common understanding in the market.

Following the CCM’s Provisional Findings Report, both Air Mauritius and MAITA provided the CCM with their responses advising of measures that both companies have taken, which could mitigate the breach in investigation. Surprisingly, the Executive Director in his report did not recommend the imposition of an administrative sanction but instead stated “It is up to the Commission to decide whether it agrees with these findings, and if so, what to do about it. However, in the very unusual circumstances of this case, I am recommending no further action. Financial penalties might not be appropriate, because they can be imposed only for an intentional or negligent breach of the Act, and we have not found evidence of an intentional breach in the period since the Act came into force.”

In conclusion the Executive Director warned that businesses which discuss prices with their competitors should not assume that they will escape penalties, and that intentional or negligent breaches of the prohibition on price-fixing could result in financial penalties of up to 10% of a companies’ turnover over up to five years.

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