Digital Titan (Pty) Ltd v TDE Investments (Pty) Ltd (LM165Jan22) [2022] ZACT 27; [2022] 2 CPLR 31 (CT) (18 August 2022)

Digital Titan (Pty) Ltd v TDE Investments (Pty) Ltd (LM165Jan22) [2022] ZACT 27; [2022] 2 CPLR 31 (CT) (18 August 2022)

The Tribunal found that the proposed merger would not result in a substantial prevention or lessening of competition in the market for data centre services in South Africa, as Digital Realty is not active in the country and there is no accretion of market share. The concerns raised by ADC regarding network effects and foreclosure were addressed through access conditions agreed between ADC and the merging parties, ensuring continued open access to NAP Africa for third-party data centre providers and their customers. The Tribunal also determined that the transaction would not negatively impact employment or the spread of ownership by historically disadvantaged persons, as there would be no...

Citation
[2022] ZACT 27
Parties
Applicant: Digital Titan (Pty) Ltd; Respondent: TDE Investments (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 August 2022
Case Number
LM165Jan22
Procedural Posture
Large Merger / Conditional Approval After Intervention and Hearing
Outcome
Merger conditionally approved subject to access and public interest conditions.
Judges
Y Carrim, I Valodia, T Vilakazi
Legal Topics
Large Merger Review, Network Effects, Foreclosure Theory of Harm, Public Interest Conditions, Colocation Services, Internet Exchange Point Access
Competition Law Commercial and Corporate Large Merger Review Network Effects Foreclosure Theory of Harm Public Interest Conditions Colocation Services Internet Exchange Point Access

Case Brief

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Parties

Digital Titan (Pty) Ltd

Applicant

TDE Investments (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Conditional Approval After Intervention and Hearing

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in the market for data centre services in South Africa.
  2. 2 Whether the merger would result in foreclosure or network effects detrimental to competitors, particularly ADC.
  3. 3 Whether the transaction raises public interest concerns, including employment and spread of ownership by historically disadvantaged persons.

Ratio Decidendi

The Tribunal found that the proposed merger would not result in a substantial prevention or lessening of competition in the market for data centre services in South Africa, as Digital Realty is not active in the country and there is no accretion of market share. The concerns raised by ADC regarding network effects and foreclosure were addressed through access conditions agreed between ADC and the merging parties, ensuring continued open access to NAP Africa for third-party data centre providers and their customers. The Tribunal also determined that the transaction would not negatively impact employment or the spread of ownership by historically disadvantaged persons, as there would be no...

Court Disposition

Merger conditionally approved subject to access and public interest conditions.

Orders

  • The merger between Digital Titan (Pty) Ltd and TDE Investments (Pty) Ltd is approved subject to the access conditions set out in Annexure A.
  • TDE shall not restrict or prevent third-party data centre providers or their customers from connecting to or peering at NAP Africa located at TDE's data centres.