Crackdown on inverter, cellphone and TV repairs in South Africa
The Competition Commission has published its final Guidelines on Repair, Service and Maintenance Aftermarkets under section 79 of the Competition Act.
The Guidelines cover repair and maintenance services for a host of products, including backup water and electricity systems, such as inverters.
They cover commonly purchased products such as mobile phones, tablets, gaming consoles, and other electronics.
This also includes audiovisual equipment such as televisions, household appliances such as washing machines and tumble dryers, medical equipment, and other devices.
However, motor vehicles are not included because they are already covered by the Commission’s Guidelines for Competition in the South African Automotive Aftermarket.
“The Guidelines promote greater choice for consumers about where and how their products are repaired or serviced and seek to protect customers against anti-competitive business practices,” the Commission said.
Under the Guidelines, some anti-competitive business practices include refusing to sell spare parts to independent technicians or supplying them on unfair or discriminatory terms.
It is also considered an anti-competitive practice to enter into exclusive contracts with component suppliers, thereby preventing independent shops from buying parts directly.
Other anti-competitive practices include:
- Requiring technicians to use special, manufacturer-branded diagnostic tools or connectors when standard, widely available tools could safely do the same job is considered anti-competitive behaviour.
- Using software locks that stop a replacement part from working unless the manufacturer remotely activates or pairs it.
- Displaying warning pop-ups on a device screen after an independent repair to discourage or scare consumers is an anti-competitive tactic and should be discouraged.
The Commission explained that encouraging independent repair markets helps small repair businesses grow and expands the market for refurbished products while keeping them functional for longer.
The new Guidelines provide insight into certain business practices that can harm competition, including blocking access to spare parts, repair information, or diagnostic tools.
The Guidelines were published under Section 79 of the Competition Act No. 89 of 1998, as amended, following public consultations with businesses and stakeholders across various sectors.
No new rules beyond what is already established in the law
The Guidelines provided by the Commission do not add any new rules that aren’t already found in the existing law (the Act).
Instead, the Commission is urging manufacturers (OEMs) and related companies to carefully examine these Guidelines.
These groups should ensure that their practices for repairing, servicing, and maintaining products after they have been sold do not restrict competition in the market or negatively affect consumers.
The focus is on promoting fair practices that benefit both businesses and consumers.
The Commission said that service providers should inform it when OEMs take part in anti-competitive conduct, limit their ability to provide services, or engage in the types of conduct outlined in the Guidelines.
It explained that when it becomes too expensive to switch to another brand, or when only the original manufacturer holds the spare parts, repair manual or tools, consumers can feel stuck.
This leaves buyers with fewer choices and prevents independent technicians from offering competing, affordable services.
The Guidelines mainly apply when a consumer needs to pay for the repair out of pocket because it is not covered by a standard or statutory warranty.
These rules apply to any specific damage or fix that the warranty excludes, even if the product is still within its warranty period.
The Commission said that every complaint regarding repair restrictions will be evaluated individually based on its own specific facts and evidence.
It will also check whether a manufacturer’s restriction breaches key sections (sections 5, 8, or 9) of the Competition Act. Under the new Guidelines, the restrictions are not automatically considered illegal.
Manufacturers may justify their policies if they are genuinely necessary to protect consumer safety, safeguard intellectual property, improve technology or efficiency, or comply with other legal requirements.
The Commission said that the practices mentioned in the Guidelines are examples only, and that it may investigate other conduct and take action where necessary.
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