Datacentrix Holdings Limited v DG Store (SA) (Pty) Ltd (LM275Jan18) [2018] ZACT 23 (23 March 2018)

Datacentrix Holdings Limited v DG Store (SA) (Pty) Ltd (LM275Jan18) [2018] ZACT 23 (23 March 2018)

The Tribunal found that the evidence did not support the Competition Commission's broad market definition. Instead, it focused on the area of overlap: IT systems integration. The merging parties' post-merger market share would be below 10%, with several strong competitors remaining in the market. Customers confirmed the availability of alternative providers. The vertical relationship between Datacentrix and DG Store was not likely to result in foreclosure, as alternative suppliers and customers exist. No negative impact on employment or other public interest concerns was identified. Accordingly, the Tribunal concluded that the merger would not substantially prevent or lessen competition,...

Citation
[2018] ZACT 23
Parties
Applicant: Datacentrix Holdings Limited; Respondent: DG Store (SA) (Pty) Ltd; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
23 March 2018
Case Number
LM275Feb18
Procedural Posture
Merger Approval / Final Determination
Outcome
The proposed merger is approved unconditionally.
Judges
AW Wessels, Medi Mokuena, Andiswa Ndoni
Legal Topics
Merger Control, Market Definition, Horizontal Overlap, Vertical Relationships, Public Interest, Employment Impact
Competition Law Merger Control Market Definition Horizontal Overlap Vertical Relationships Public Interest Employment Impact

Case Brief

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Parties

Datacentrix Holdings Limited

Applicant

DG Store (SA) (Pty) Ltd

Respondent

Competition Commission

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed merger between Datacentrix Holdings Limited and DG Store (SA) (Pty) Ltd is likely to substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the transaction raises any public interest concerns, including employment impact.
  3. 3 Whether the market definition adopted by the Competition Commission is supported by evidence.

Ratio Decidendi

The Tribunal found that the evidence did not support the Competition Commission's broad market definition. Instead, it focused on the area of overlap: IT systems integration. The merging parties' post-merger market share would be below 10%, with several strong competitors remaining in the market. Customers confirmed the availability of alternative providers. The vertical relationship between Datacentrix and DG Store was not likely to result in foreclosure, as alternative suppliers and customers exist. No negative impact on employment or other public interest concerns was identified. Accordingly, the Tribunal concluded that the merger would not substantially prevent or lessen competition,...

Court Disposition

The proposed merger is approved unconditionally.

Orders

  • The merger between Datacentrix Holdings Limited and DG Store (SA) (Pty) Ltd is approved without conditions.