Bytes Technology Group South Africa (Pty) Ltd v Unisys Africa (Pty) Ltd (07/LM/Jan12) [2012] ZACT 36 (14 May 2012)

Bytes Technology Group South Africa (Pty) Ltd v Unisys Africa (Pty) Ltd (07/LM/Jan12) [2012] ZACT 36 (14 May 2012)

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in any relevant market. The vertical relationship between the parties was only notional and did not raise competition concerns. The merged entity's market share would remain below 10% in infrastructure support services, IT outsourcing, and systems integration, and below 30% in cheque processing services—a declining market with strong countervailing power from large banks. Barriers to entry were low, and there were sufficient competitors in all relevant markets. No adverse effect on employment or other public interest concerns were identified. Accordingly, the merger was approved unconditionally.

Citation
[2012] ZACT 36
Parties
Applicant: Bytes Technology Group South Africa (Pty) Ltd; Respondent: Unisys Africa (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
14 May 2012
Case Number
07/LM/Jan12
Procedural Posture
Merger Approval / Reasons for Decision
Outcome
Merger approved unconditionally.
Judges
Yasmin Carrim, Takalani Madima, Medi Mokuena
Legal Topics
Merger Control, Vertical Relationships, Market Share Analysis, Public Interest, Barriers to Entry
Competition Law Commercial and Corporate Merger Control Vertical Relationships Market Share Analysis Public Interest Barriers to Entry

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Parties

Bytes Technology Group South Africa (Pty) Ltd

Applicant

Unisys Africa (Pty) Ltd

Respondent

Procedural Posture

Merger Approval / Reasons for Decision

Legal Issues

  1. 1 Whether the proposed merger between Bytes Technology Group South Africa (Pty) Ltd and Unisys Africa (Pty) Ltd is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises any public interest concerns, including adverse effects on employment.

Ratio Decidendi

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in any relevant market. The vertical relationship between the parties was only notional and did not raise competition concerns. The merged entity's market share would remain below 10% in infrastructure support services, IT outsourcing, and systems integration, and below 30% in cheque processing services—a declining market with strong countervailing power from large banks. Barriers to entry were low, and there were sufficient competitors in all relevant markets. No adverse effect on employment or other public interest concerns were identified. Accordingly, the merger was approved unconditionally.

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed merger between Bytes Technology Group South Africa (Pty) Ltd and Unisys Africa (Pty) Ltd is approved without conditions.