ABSA Bank Ltd v Private Label Store Card Portfolio of EDCON (Pty) Ltd (70/LM/Jun12) [2013] ZACT 2; [2013] 1 CPLR 176 (CT) (23 January 2013)

ABSA Bank Ltd v Private Label Store Card Portfolio of EDCON (Pty) Ltd (70/LM/Jun12) [2013] ZACT 2; [2013] 1 CPLR 176 (CT) (23 January 2013)

The Tribunal found that the proposed transaction would result in ABSA acquiring the Private Label Store Card Portfolio of Edcon and entering into a strategic relationship for the provision of unsecured credit. While the merger would not result in significant unilateral effects due to the presence of other competitors, the Tribunal concurred with the Commission that ABSA's post-merger stake in both Edcon's portfolio and Woolworths Financial Services created a risk of anti-competitive information exchange between Edcon and Woolworths. To address this, the Tribunal imposed behavioural conditions requiring ABSA to ring fence competitively sensitive information and prevent its sharing between...

Citation
[2013] ZACT 2
Parties
Applicant: ABSA Bank Limited; Respondent: Private Label Store Card Portfolio of Edcon (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
23 January 2013
Case Number
70/LM/Jun12
Procedural Posture
Large Merger Review / Conditional Approval
Outcome
Conditional approval of the merger subject to behavioural and monitoring conditions.
Judges
N Manoim, A Wessels, M Mokuena
Legal Topics
Large Merger, Information Exchange, Behavioural Remedies, Market Share, Collusion Risk
Competition Law Banking and Finance Large Merger Information Exchange Behavioural Remedies Market Share Collusion Risk

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Parties

ABSA Bank Limited

Applicant

Private Label Store Card Portfolio of Edcon (Pty) Ltd

Respondent

Procedural Posture

Large Merger Review / Conditional Approval

Legal Issues

  1. 1 Whether the proposed acquisition of Edcon's Private Label Store Card Portfolio by ABSA raises competition concerns in the market for unsecured credit.
  2. 2 Whether the transaction creates a platform for collusion or information exchange between competitors Edcon and Woolworths via ABSA.
  3. 3 Whether the imposed behavioural conditions adequately address the risk of anti-competitive information exchange.

Ratio Decidendi

The Tribunal found that the proposed transaction would result in ABSA acquiring the Private Label Store Card Portfolio of Edcon and entering into a strategic relationship for the provision of unsecured credit. While the merger would not result in significant unilateral effects due to the presence of other competitors, the Tribunal concurred with the Commission that ABSA's post-merger stake in both Edcon's portfolio and Woolworths Financial Services created a risk of anti-competitive information exchange between Edcon and Woolworths. To address this, the Tribunal imposed behavioural conditions requiring ABSA to ring fence competitively sensitive information and prevent its sharing between...

Court Disposition

Conditional approval of the merger subject to behavioural and monitoring conditions.

Orders

  • The merger is approved subject to the conditions set out in Annexure A, including ring fencing of competitively sensitive information between Edcon and Woolworths via ABSA.
  • ABSA must implement and maintain behavioural remedies to prevent the sharing of pricing, margin, cost, client, and marketing information between Edcon and Woolworths.