Dimension Data Middle East and Another v Britehouse Holdings (Pty) Ltd (LM092Aug15) [2015] ZACT 117 (9 September 2015)

Dimension Data Middle East and Another v Britehouse Holdings (Pty) Ltd (LM092Aug15) [2015] ZACT 117 (9 September 2015)

The Tribunal found that the merged entity would have a market share of 13.21% in the ERP market and 5.59% in the Microsoft services market, both of which are not high enough to raise competition concerns. The presence of large competitors such as Accenture, Deloitte, EOH, and IBM would constrain any potential exercise of market power. Concerns about bundling and input foreclosure were dismissed as neither firm had exclusive relationships with original equipment manufacturers, and the merger was not vertical in nature. The Tribunal agreed with the Commission's assessment that the merger would not substantially prevent or lessen competition. Regarding public interest, the Tribunal imposed a...

Citation
[2015] ZACT 117
Parties
Applicant: Dimension Data Middle East and Africa (Pty) Ltd; Respondent: Britehouse Holdings (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
9 September 2015
Case Number
LM092Aug15
Procedural Posture
Merger Approval / Reasons for Decision
Outcome
Merger conditionally approved subject to a two-year moratorium on retrenchments.
Judges
Norman Manoim, Andreas Wessels, Medi Mokuena
Legal Topics
Merger Control, Market Share Analysis, Public Interest Conditions, Input Foreclosure, Employment Protection
Competition Law Merger Control Market Share Analysis Public Interest Conditions Input Foreclosure Employment Protection

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Parties

Dimension Data Middle East and Africa (Pty) Ltd

Applicant

Britehouse Holdings (Pty) Ltd

Respondent

Procedural Posture

Merger Approval / Reasons for Decision

Legal Issues

  1. 1 Whether the proposed merger is likely to substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the merger raises any public interest concerns, specifically regarding employment retrenchments.
  3. 3 Whether competitor concerns about bundling and market power are valid.

Ratio Decidendi

The Tribunal found that the merged entity would have a market share of 13.21% in the ERP market and 5.59% in the Microsoft services market, both of which are not high enough to raise competition concerns. The presence of large competitors such as Accenture, Deloitte, EOH, and IBM would constrain any potential exercise of market power. Concerns about bundling and input foreclosure were dismissed as neither firm had exclusive relationships with original equipment manufacturers, and the merger was not vertical in nature. The Tribunal agreed with the Commission's assessment that the merger would not substantially prevent or lessen competition. Regarding public interest, the Tribunal imposed a...

Court Disposition

Merger conditionally approved subject to a two-year moratorium on retrenchments.

Orders

  • The proposed merger is approved subject to the condition that there will be no retrenchments for a period of two years.
  • No other public interest conditions are imposed.