Swazi Med frustrates consumers 

Swazi Med’s Principal Officer Peter Simelane

By Phephile Motau

Swazi Med is allegedly holding emaSwati at ransom by refusing them to join other medical aid schemes operating in the country.
The alleged anti competitive behaviour of Swazi Med is not only affecting consumers, but also the other companies in the medical aid scheme industry. Because of the alleged conduct, the Eswatini Financial Times has established that other medical aid providers are struggling to penetrate the market due to alleged uncompetitive behaviour from Swazi Med. 

Other industry players in the medical aid industry are Oracle Insurance Eswatini and Lidwala Health. Through our sources, we have reliably learnt that Swazi Med allegedly doesn’t allow companies to have double membership, with them and other industry players. It is alleged if a certain group of employees from a company decide to join another medical aid scheme, Swazi Med compels them to either stick with them or join the other medical aid player en mass.
According to a source who has worked with two companies in the industry, this has been going on for a while. He said a circular from the Financial Services Regulatory Authority (FSRA) issued in 2016 stipulates that if a company has 30 or more employees, they are free to choose a medical scheme of their choice and are not bound to be under one medical scheme.

“The company does not comply with that; they want all or nothing. They would rather have all the employees leave their scheme,” he said.
After getting wind of the alleged anticompetitive practice, the regulator, the Financial Regulatory Authority (FSRA) issued a notice in December 2018 stating that it was against the terms of the FSRA Act 2010 and an undesirable business practice for a medical scheme to offer medicalscheme services on condition that the employer undertook to exclusively utilise the services of that medical scheme/medical scheme provider.Members of the public who have concerns were advised to submit their complaints to the FSRA for necessary remedial action.

Another player who spoke on condition of anonymity said Swazi Med continued to do this despite previously being fined for the same behaviour by the Ombudsman of Financial Services. He said companies were now apprehensive about their employees joining other medical schemes because they do not want to deal with this company.

The industry player went on to say they had approached several companies in different sectors with proposals to provide medical aid services for their employees and they have been met with the same response. The response has been that their employees were members of Swazi Med and if some want to change because they prefer the other company’s benefits, Swazi Med will allegedly force them to decide whether they want to exclusively continue with them or join the other company.

“We have engaged several companies with the intent of attracting new customers and we always get this response. It is worrying because this is anti-competitive behaviour,” he said.

The source said in the past, some companies had written several letters to the FSRA complaining about the alleged behaviour of Swazi Med, which prevented them from penetrating the market. Efforts to reach Swazi Med’s Principal Officer Peter Simelane were unsuccessful. An email was sent to him on Monday but he had not responded by the time of going to print. Follow-up calls were made and WatsApp messages were also sent but he did not respond.
When reached for comment on whether they had been made aware of Swazi Med’s alleged conduct and if any official complaint has been lodged, FSRA Head of Consumer and Stakeholder Affairs Mbuso Gamedze said the “organisation would respond when the time is right.”

The company is in breach of the Competition Act 

The company is in breach of the Competition Act of 2007 and the Fair-Trade Act of 2001. This is according to competition law expert Modicai Donga. Donga said the conduct of the medical aid provider was harassment and cohesion, which is against the law.
He said Section 31 of the Competition Act 08 of 2007 prohibited such conduct where an entity wants to exclusively hold consumers to their detriment.
“It is an uncompetitive conduct by whoever is doing it,” he said.

He said subsection C of the Act talked to the making of goods or supplies dependent upon the consumer accepting some restriction of distribution. He said the consumers must now be drawn to accept such kind of uncompetitive conduct and must not be held at ransom by the serviceproviders. 
Donga said in terms of competition law, consumers must be free to choose a service provider to deal with.

“Where a service provider says a consumer is not free to shop around, then that becomes an uncompetitive conduct,” he said.
Donga said consumers must bring this to the attention of the competition authority which is properly equipped to deal with entities that are acting in an uncompetitive manner.

Donga said many people were not aware of the Fair-Trading Act of 2001 which protects the rights of consumers. He said when you had a customer and you were refusing for them to go elsewhere, it was tantamount to coercion and harassment. He said this consumer was no longer with the company willingly, and this was anti-competitive conduct that must attract the wrath and attention of the Competitions Commission.

“If they are saying you should stay, or all leave, they are in breach of Section 17 of the Fair Trading Act,” he said.
Donga added that Section 17 could also be read with Section 33 Subsection 2 of the Competition Act, which says a person should not do any acts that are prohibited under the Fair-Trading Act. He said should the Competition Commission investigate and find that the medical aid scheme is in breach of the Act, the commission would then impose a fine which is up to 10 per cent of the revenue of such an entity.

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