The Commercial Case Law Index is a collection of judgments from African countries on topics relating to commercial legal practice. The collection aims to provide a snapshot of commercial legal practice in a country, rather than present solely traditionally "reportable" cases. The index currently covers 400 judgments from Uganda, Tanzania, Nigeria, Ghana and South Africa.
Get started on finding judgments that are relevant to you by browsing the topic list on the left of the screen. Click the arrows next to the topic names to reveal a detailed list of sub-topics. Most judgments are accompanied by a short summary written by subject-matter expert postgraduate students from the University of Cape Town.
The court considered whether the South African Breweries (SAB), a dominant manufacturer and distributor of beer products, engaged in anti-competitive behaviour, by securing distribution agreements which constituted restrictive horizontal, alternatively, vertical practices in terms of s 4(1)(b)(ii) and s 5(1) of the Competition Act 89 of 1998 (‘the act’).
The commission challenged the distribution agreements and alleged that the SAB had contravened s 4(1)(b)(ii) of the act as a result of the exclusive territories awarded to appointed distributors (ADs) for distribution, amounting to a market division. The relationship between SAB and the AD’s were considered to determine whether they were competitors as contemplated in the act.
In applying the concept of ‘characterisation’ the pivotal question is a) whether the parties were in a horizontal relationship; and if so, b) whether the case involved the division of markets as contemplated in the act.
The court confirmed that, the ADs could not be seen to be autonomous economic actors, independent of the SAB, and were not in a competitive relationship with one another. Further, the true relationship was primarily a vertical one, encompassing a horizontal component, flowing from the vertical arrangement. The agreements did not amount to lessened intra-brand competition, preventing rival distributors from succeeding in the distribution within the market.
The court held that, there was not enough evidence to support the contention that the agreement had the effect of substantially preventing or lessening competition in the market, thus, there was no diminished consumer welfare supporting the prevention of competition in the market. The appeal was dismissed with costs.
The appellants are the only producers of andalusite in South Africa. The appellants notified the competition commission (the commission) of an intermediate merger in terms of s13A Competition Act 89 of 1998 (the act), which the commission prohibited. The competition tribunal (the tribunal) confirmed that prohibition. The appellants appealed to the competition appeal court (‘CAC’) contending that the merger should have been permitted subject to tendered conditions.
The CAC held that the tribunal ought to have relied on the s12A test where:
(i) it determined at first whether merger is likely to substantially prevent or lessen competition ;
(ii) whether the merger can or cannot be justified on substantial public interest grounds by assessing the factors set out in s12A(3) of the act; and
(iii) if the determination in (i) is ‘no’, the tribunal must determine whether the merger can or cannot be justified on substantial public interest grounds.
The CAC concluded that the merger was anti-competitive as it would give rise to a monopoly market. Additionally, the merging parties failed to portray any pro-competitive gains or public interest considerations which justified the merger. The appeal was therefore dismissed.
The case is an appeal by Media 24 Property Ltd which owns Forum and Vista community newspapers distributed in Welkom town against a decision of the Competition Commission Tribunal (the tribunal) which found that the selling of Forum newspaper in Welkom was predatory in contravention of s 8(c) of the Competition Act (the act). The tribunal ruled that the Forum newspaper was priced below the average cost to the detriment of other newspapers. In order to reach its decision, the tribunal employed the Average Total Cost concept (ATC).
On appeal, the appellant was challenging the use of the ATC concept as an appropriate benchmark for determining predatory pricing under the act. The court held that there are two tests for determining predatory pricing under s 8(d)(iv) being the benchmark of marginal cost and the Average Value Cost (AVC). It ruled that in order for the respondent (the commission) to show that the conduct of the appellant was predatory in nature, it needed to establish that the appellant is the dominant firm involved in selling goods below the marginal or (AVC). The court found that the ATC standard cannot be used to measure predatory pricing. It ruled that the Average Avoidable Cost (AAC) was the appropriate cost benchmark to determine predatory pricing. In light of evidence provided by the parties, the court found that the respondent failed to prove that Forum’s AAC exceeded its revenue hence the appeal was upheld.
Competition – Unlawful Competition – Collusive Tendering – appropriate penalty