Blue Label Investments (Pty) Ltd and Prepaid Company (Pty) Ltd & Others (72/LM/Jul07) [2007] ZACT 81 (30 October 2007)

Blue Label Investments (Pty) Ltd and Prepaid Company (Pty) Ltd & Others (72/LM/Jul07) [2007] ZACT 81 (30 October 2007)

The Tribunal found that the overlap between the merging parties is limited to the distribution of airtime, where their combined market share is approximately 13% by value and 7% by volume, both of which are low and do not raise competition concerns. The merged entity will continue to face competition from established market players such as Vodacom, MTN, Telkom, Cell C, Smart Call, Virgin Mobile, and Autopage Cellular. The vertical relationship between TPC and Virtual Voucher was examined, but Virtual Voucher's purchases from TPC constitute less than 1% of TPC's total sales, and thus do not present customer foreclosure risks. No public interest issues were identified. Accordingly, the...

Citation
[2007] ZACT 81
Parties
Applicant: ListCo; Applicant: Blue Label Investments (Pty) Ltd; Respondent: The Prepaid Company (Pty) Ltd; Respondent: House of Business Solutions; Respondent: Cellfind (Pty) Ltd; Respondent: African Prepaid Services (Pty) Ltd; Respondent: Polsa Holdings (Pty) Ltd; Respondent: Oxigen South America Limited; Respondent: Virtual Voucher (Pty) Ltd; Respondent: Budding Traders; Respondent: Premet Cellular (Pty) Ltd; Respondent: The Hub Pretalk (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
30 October 2007
Case Number
72/LM/Jul07
Procedural Posture
Merger Application / Reasons for Unconditional Approval Issued
Outcome
Merger approved unconditionally.
Judges
D Lewis, N Manoim, Y Carrim
Legal Topics
Merger Control, Market Share Analysis, Vertical Integration, Public Interest, Airtime Distribution
Competition Law Commercial and Corporate Merger Control Market Share Analysis Vertical Integration Public Interest Airtime Distribution

Case Brief

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Parties

ListCo

Applicant

Blue Label Investments (Pty) Ltd

Applicant

The Prepaid Company (Pty) Ltd

Respondent

House of Business Solutions

Respondent

Cellfind (Pty) Ltd

Respondent

African Prepaid Services (Pty) Ltd

Respondent

Polsa Holdings (Pty) Ltd

Respondent

Oxigen South America Limited

Respondent

Virtual Voucher (Pty) Ltd

Respondent

Budding Traders

Respondent

Premet Cellular (Pty) Ltd

Respondent

The Hub Pretalk (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Reasons for Unconditional Approval Issued

Legal Issues

  1. 1 Whether the proposed merger between ListCo, Blue Label Investments (Pty) Ltd, The Prepaid Company (Pty) Ltd, and various target firms is likely to substantially lessen or prevent competition in the relevant markets.
  2. 2 Whether any public interest concerns arise from the transaction.

Ratio Decidendi

The Tribunal found that the overlap between the merging parties is limited to the distribution of airtime, where their combined market share is approximately 13% by value and 7% by volume, both of which are low and do not raise competition concerns. The merged entity will continue to face competition from established market players such as Vodacom, MTN, Telkom, Cell C, Smart Call, Virgin Mobile, and Autopage Cellular. The vertical relationship between TPC and Virtual Voucher was examined, but Virtual Voucher's purchases from TPC constitute less than 1% of TPC's total sales, and thus do not present customer foreclosure risks. No public interest issues were identified. Accordingly, the...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between ListCo, Blue Label Investments (Pty) Ltd, The Prepaid Company (Pty) Ltd, and the identified target firms is approved unconditionally.