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 a licensing agreement concluded between the parties, granting certain rights for a period of 5 years, amounted to a merger in terms of s 12(1) of the Competition Act 89 of 1998 (the act).
The focus was on whether the transaction would lead to structural changes in the market, thus, whether there is a reasonable chance that the transaction could impact on a competitive market outcome. It was argued that the transaction amounted to a transfer of the second respondent’s business, thus an acquisition of control. The court considered what is the appropriate test for acquiring or establishing direct or indirect control over the whole or part of the business for another was. Thus, in line with USA academic Professor Herbet Hovenkamp’s ‘Hovenkamp test’, the component of the business which was transferred must have constituted part of the business of the transferor, which has now been placed under direct or indirect control of the transferee.
The court held that, there had been no transfer of productive capacity which would amount to the transfer of market share, indicating that the transfer of the business could not have taken place within the realm of the license agreement. The court ordered that the commission was to give a report ascertaining whether there had been a change of control, and if it had, then the matter was referred back to the tribunal for determination.
The court held that, there was nothing in the agreement which amounted to a merger as defined in terms of the act. Appeal upheld.
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.
This application was in relation to a court order that the Competition Appeal Court (the CAC) granted in June 2016. This order held that the agreement between the first and second respondents did not give rise to a merger within the meaning of s 12(1) of the Competition Act 89 of 1998 (the act).
In the current application, the core issue to be resolved was the proper interpretation of the order granted by the CAC. Furthermore, evidence was sought to be led with regards to the parliamentary hearing that was conducted on 7 December 2016.
The CAC held that this order was clear and unambiguous. Accordingly it was not open to the CAC to give it a fresh interpretation or to supplement its meaning.
With regards to the parliamentary hearing, the CAC held that an order which would empower the commission to conduct interviews with both Mr Naidoo and Ms Makhobo fell outside the scope of the order it granted in June 2016. However, since the transcript of the parliamentary hearings was a public document, it found it not to be an obstacle to have the commission examine this transcript. The CAC held that whatever information contained in this transcript may be employed by the commission in order to make a recommendation as to whether the agreement falls within the definition of merger in terms of the act.
The matter involves a merger approval application for an already implemented merger between Media24 and Novus following concerns raised by Caxton and a consequent divestiture.
The Competition Tribunal first considered whether the merger had raised any competition concerns. It dealt with two concerns; information exchange and input foreclosure. In assessing the information exchange concern, the tribunal accepted the parties’ assertion that appointing non-operational persons to the Novus board would minimise the risk of information sharing.
Concerning the possibility of competitor foreclosure, the tribunal accepted that the lack of Novus’ competitors to absorb the foreclosed capacity gives more incentive for foreclosure. However, it reasoned that this incentive is countered by the divestiture which reduces media24’s control, both de jure and de facto, over Novus. Further, it noted that the other publications handled by Novus are not in competition with Media24 thus it would not need to foreclose.
The tribunal also considered if the merger raised public interest concerns, mainly whether the merger would negatively affect smaller businesses. It was stated that noting that there is reduced possibility of market foreclosure - conduct which would negatively impact these businesses, these concerns fell away. Moreover, it was noted that the merger would in fact positively impact B-BBEE shareholders of Media24 hence it positively served public interests.
The Tribunal therefore concluded that considering the divestiture and the absence of negative competition and public interests impacts, the merger transaction has to be approved.