CTP Limited and Another v Competition Commission (IM232Feb16) [2016] ZACT 38; [2016] 1 CPLR 105 (CT) (11 May 2016)

CTP Limited and Another v Competition Commission (IM232Feb16) [2016] ZACT 38; [2016] 1 CPLR 105 (CT) (11 May 2016)

The Tribunal found that CDT met the requirements of the EU test for failing firms, as it was in a declining market, had suffered significant losses, and no alternative buyer was realistically available. The evidence showed that CDT's market share would have transferred to CTP upon exit, and attempts to find other buyers would have been fruitless. The Tribunal concluded that imposing a pricing cap was not justified, given the market's rapid decline and the short-lived nature of any market power gained post-merger. The merger was approved subject to conditions addressing non-price competition concerns and public interest, including limits on retrenchments, minimum order quantities, and...

Citation
[2016] ZACT 38
Parties
Applicant: CTP Limited; Applicant: Compact Disc Technologies (a division of Times Media (Pty) Ltd); Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
11 May 2016
Case Number
IM232Feb16
Procedural Posture
Review Application / Reconsideration of Merger Prohibition
Outcome
Merger approved subject to conditions addressing non-price competition and public interest concerns.
Judges
Norman Manoim, Andreas Wessels, Anton Roskam
Legal Topics
Failing Firm Doctrine, Merger Control, Unilateral Effects, Public Interest Considerations, Market Definition, Remedies and Conditions
Competition Law Commercial and Corporate Failing Firm Doctrine Merger Control Unilateral Effects Public Interest Considerations Market Definition Remedies and Conditions

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Parties

CTP Limited

Applicant

Compact Disc Technologies (a division of Times Media (Pty) Ltd)

Applicant

Competition Commission

Respondent

Procedural Posture

Review Application / Reconsideration of Merger Prohibition

Legal Issues

  1. 1 Whether the merger between CTP Limited and Compact Disc Technologies should be approved despite the Competition Commission's prohibition.
  2. 2 Whether the failing firm doctrine applies to CDT in the context of a declining market.
  3. 3 Whether the imposition of a pricing cap condition is justified given the market circumstances.

Ratio Decidendi

The Tribunal found that CDT met the requirements of the EU test for failing firms, as it was in a declining market, had suffered significant losses, and no alternative buyer was realistically available. The evidence showed that CDT's market share would have transferred to CTP upon exit, and attempts to find other buyers would have been fruitless. The Tribunal concluded that imposing a pricing cap was not justified, given the market's rapid decline and the short-lived nature of any market power gained post-merger. The merger was approved subject to conditions addressing non-price competition concerns and public interest, including limits on retrenchments, minimum order quantities, and...

Court Disposition

Merger approved subject to conditions addressing non-price competition and public interest concerns.

Orders

  • CTP will not compel customers to use its distribution services as a condition for replication services.
  • CTP will allow customers to place minimum orders of between 100 and 300 CDs.