Visa prices aren't excessive- competition commision

AFTER investigating
allegations of abuse of
dominance against the visa
company VFS Global, the
Competition Commission will
not refer the complaint to
the Competition Tribunal for
adjudication.
The Commission
investigated the issue
that VFS was charging
excessive pricing as a
result of its exclusive
contracts with various
foreign embassies, but the
Commission ruled that as
“VFS does not determine
the prices independently, it
is unlikely that its prices are
excessive”.
The exclusive contracts
VFS signed with various
foreign governments also
came under scrutiny. The
Commission admitted that
the exclusive contracts the
governments signed with
VFS were likely to restrict
competition in the market
but said it didn’t have power
over ‘governments or organs
of state’.
The Commission said: “the
Competition Tribunal held
that the Act shall only apply
when the state/government
acts through a vehicle like
a firm. The Competition
Tribunal further held that it
does not have the power to
instruct a state functionary
exercising a public power to
act in a particular manner
or to desist from acting in a
particular manner. Further,
for an entity to qualify as a
firm, it must engage in an
economic activity.”
Haniff Hoosen, Democratic
Alliance’s Shadow Minister
of Economic Development,
disagrees with the
Commission’s ruling. “I
find the response from the
Commission very interesting,
in fact to the point that I
think it is quite hypocritical.
It does not make sense that
on the one hand they agree
that VFS and its operations
are anti-competitive but
cannot hold governments
accountable because they
are not a ‘firm’. I believe the
Commission doesn’t have
the courage to rule against
the government.”
Mava Scott, spokesperson
for the Competition
Commission, told TNW that
although the Commission
would not be investigating
the matter further, it is
pursuing the advocacy route
in dealing with the issues
that have been raised.
She said the Commission
was in the process of
communicating with the
various foreign embassies
on the matter. She said:
“Advocacy efforts are
currently under way, working
with various embassies
relating to their arrangements
with VFS.”
She said the Commission
would also engage the South
African government as it had
similar agreements with VFS.
The SA government recently
awarded VFS Global a R1bn
visa facilitation tender to
process visas for South
Africa.
Jaco Badenhorst, md of
Visa Request, says he is
“extremely disappointed”
because the Commission
confirmed market dominance
by VFS Global but is not
willing to pursue the case.
Jaco says he has
requested the Commission
to send him the list of
embassies with which they’ve
communicated but that they
refused. “The Commission is
hiding something! After this
experience, I do not trust the
Competition Commission
to protect the South African
population against unfair
competition due to market
dominance.”