Masstores (Pty) Limited and Cell-Shack Communications (Pty) Limited (02/LM/Jan05) [2005] ZACT 14 (18 March 2005)

Masstores (Pty) Limited and Cell-Shack Communications (Pty) Limited (02/LM/Jan05) [2005] ZACT 14 (18 March 2005)

The Tribunal found that the merged entity would have a combined post-merger market share of 11% in the sale of pre-paid and contract airtime, cellular phones, and accessories, which is below the Competition Commission's benchmark for concern. Even if the wholesale market is considered separately, the combined share would be 8%. The presence of major network providers as competitors further constrains the merged entity. No significant vertical or public interest concerns were identified. Therefore, the merger does not substantially lessen or prevent competition, nor does it raise public interest issues. The merger was approved unconditionally.

Citation
[2005] ZACT 14
Parties
Applicant: Masstores (Pty) Limited; Respondent: Cell-Shack Communications (Pty) Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 March 2005
Case Number
02/LM/Jan05
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved unconditionally.
Judges
Norman Manoim, Yasmin Carrim, Lawrence Reyburn
Legal Topics
Large Merger Review, Market Definition, Vertical Integration, Public Interest, Market Share Analysis
Competition Law Commercial and Corporate Large Merger Review Market Definition Vertical Integration Public Interest Market Share Analysis

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Parties

Masstores (Pty) Limited

Applicant

Cell-Shack Communications (Pty) Limited

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Does the proposed merger between Masstores and Cell-Shack substantially lessen or prevent competition in the relevant market?
  2. 2 Are there any significant vertical concerns arising from the merger?
  3. 3 Does the merger raise any public interest concerns that would justify prohibition or conditions?

Ratio Decidendi

The Tribunal found that the merged entity would have a combined post-merger market share of 11% in the sale of pre-paid and contract airtime, cellular phones, and accessories, which is below the Competition Commission's benchmark for concern. Even if the wholesale market is considered separately, the combined share would be 8%. The presence of major network providers as competitors further constrains the merged entity. No significant vertical or public interest concerns were identified. Therefore, the merger does not substantially lessen or prevent competition, nor does it raise public interest issues. The merger was approved unconditionally.

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Masstores (Pty) Limited and the business of Cell-Shack Communications (Pty) Limited is approved without conditions.