Africa data centres (Pty) Ltd vs Rental Enterprise Comprising the Sumrand data centre and the underlying land (LM169Mar20) [2020] ZACT 36 (29 April 2020)

Africa data centres (Pty) Ltd vs Rental Enterprise Comprising the Sumrand data centre and the underlying land (LM169Mar20) [2020] ZACT 36 (29 April 2020)

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in the market for off-site or outsourced data services in South Africa. The merged entity's market share and accretion were not sufficient to enable anti-competitive conduct, given the excess capacity and presence of strong competitors. The transaction did not present vertical foreclosure risks, as the data centre would remain carrier-neutral and alternative connectivity providers are available. No public interest concerns were identified. Accordingly, the Tribunal approved the transaction unconditionally.

Citation
[2020] ZACT 36
Parties
Applicant: Africa Data Centres (Pty) Ltd; Respondent: Rental Enterprise Comprising The Samrand Data Centre and The Underlying Land; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
29 April 2020
Case Number
LM169Mar20
Procedural Posture
Merger Approval / Final Determination
Outcome
The proposed transaction is approved unconditionally.
Judges
Y Carrim, A Ndoni, F Tregenna
Legal Topics
Merger Control, Horizontal Overlap, Vertical Overlap, Foreclosure Concerns, Public Interest, Carrier Neutrality
Competition Law Merger Control Horizontal Overlap Vertical Overlap Foreclosure Concerns Public Interest Carrier Neutrality

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 1 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Africa Data Centres (Pty) Ltd

Applicant

Rental Enterprise Comprising The Samrand Data Centre and The Underlying Land

Respondent

Competition Commission

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed acquisition of the Samrand Data Centre by Africa Data Centres (Pty) Ltd is likely to substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the transaction raises any public interest concerns.
  3. 3 Whether the transaction presents horizontal or vertical competition concerns.

Ratio Decidendi

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in the market for off-site or outsourced data services in South Africa. The merged entity's market share and accretion were not sufficient to enable anti-competitive conduct, given the excess capacity and presence of strong competitors. The transaction did not present vertical foreclosure risks, as the data centre would remain carrier-neutral and alternative connectivity providers are available. No public interest concerns were identified. Accordingly, the Tribunal approved the transaction unconditionally.

Court Disposition

The proposed transaction is approved unconditionally.

Orders

  • The merger between Africa Data Centres (Pty) Ltd and the Samrand Data Centre is approved without conditions.
  • No remedies or conditions are imposed on the parties.