Media 24 Proprietary Limited v Competition Commission of South Africa (146/CAC/Sep16) [2018] ZACAC 1; 2018 (4) SA 278 (CAC); [2018] 1 CPLR 56 (CAC) (19 March 2018)

Media 24 Proprietary Limited v Competition Commission of South Africa (146/CAC/Sep16) [2018] ZACAC 1; 2018 (4) SA 278 (CAC); [2018] 1 CPLR 56 (CAC) (19 March 2018)

The Competition Appeal Court held that the appropriate benchmark for assessing predatory pricing under section 8(c) of the Competition Act is average avoidable costs (AAC), not average total costs (ATC) plus intention. The Tribunal erred by applying ATC and predatory intent, which is not supported by the statutory wording or economic principles. The evidence showed that Forum's revenue exceeded its avoidable costs during the complaint period, and the inclusion of certain cost categories as avoidable was not justified on the probabilities. Opportunity costs should not be included in AAC. As the respondent failed to prove that Forum's AAC exceeded its revenue, the requirements for predatory...

Citation
[2018] ZACAC 1
Parties
Appellant: Media 24 Proprietary Limited; Respondent: Competition Commission of South Africa
Court
Competition Appeal Court
Jurisdiction
South Africa
Judgment Date
19 March 2018
Case Number
146/CAC/Sep16
Procedural Posture
Civil Appeal / Appeal From Competition Tribunal Decision
Outcome
Appeal upheld. The decision of the Competition Tribunal is set aside and the complaint is dismissed.
Judges
Davis JP, Rogers JA, Boqwana JA
Legal Topics
Predatory Pricing, Average Avoidable Costs, Dominant Firm Conduct, Exclusionary Practices, Cost Benchmarking, Competition Act Section 8
Competition Law Commercial and Corporate Predatory Pricing Average Avoidable Costs Dominant Firm Conduct Exclusionary Practices Cost Benchmarking Competition Act Section 8

Case Brief

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Parties

Media 24 Proprietary Limited

Appellant

Competition Commission of South Africa

Respondent

Procedural Posture

Civil Appeal / Appeal From Competition Tribunal Decision

Legal Issues

  1. 1 Whether the appellant engaged in predatory pricing in contravention of section 8(d)(iv) or section 8(c) of the Competition Act.
  2. 2 What is the appropriate cost benchmark for assessing predatory pricing under South African competition law.
  3. 3 Whether the Competition Tribunal erred in its application of average total costs and intention as a test for predatory pricing.

Ratio Decidendi

The Competition Appeal Court held that the appropriate benchmark for assessing predatory pricing under section 8(c) of the Competition Act is average avoidable costs (AAC), not average total costs (ATC) plus intention. The Tribunal erred by applying ATC and predatory intent, which is not supported by the statutory wording or economic principles. The evidence showed that Forum's revenue exceeded its avoidable costs during the complaint period, and the inclusion of certain cost categories as avoidable was not justified on the probabilities. Opportunity costs should not be included in AAC. As the respondent failed to prove that Forum's AAC exceeded its revenue, the requirements for predatory...

Court Disposition

Appeal upheld. The decision of the Competition Tribunal is set aside and the complaint is dismissed.

Orders

  • The decision of the Competition Tribunal of 8 September 2015 is set aside.
  • The complaint referred by the Competition Commission to the Tribunal on 31 October 2011 is dismissed.