Mobile Telephone Networks (Pty) Ltd v Afrihost (Pty) Ltd (019075) [2015] ZACT 10; [2016] 1 CPLR 184 (CT) (12 January 2015)

Mobile Telephone Networks (Pty) Ltd v Afrihost (Pty) Ltd (019075) [2015] ZACT 10; [2016] 1 CPLR 184 (CT) (12 January 2015)

The Tribunal found that the proposed acquisition would not substantially prevent or lessen competition in the relevant markets. The merged entity's market shares in hosting services and retail ADSL and mobile data services were found to be low, and both MTN and Afrihost would continue to be constrained by other large competitors. The vertical relationship between MTN and Afrihost did not raise significant exclusionary concerns, as MTN lacked sufficient market power at the wholesale level to foreclose rivals, and incentives for margin squeeze were minimal. The Tribunal concurred with the Commission's assessment that bundling would not be exclusionary and could be pro-competitive. No public...

Citation
[2015] ZACT 10
Parties
Applicant: Mobile Telephone Networks (Pty) Ltd; Respondent: Afrihost (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
12 January 2015
Case Number
019075
Procedural Posture
Merger Review / Final Determination
Outcome
The proposed transaction is approved unconditionally.
Judges
Norman Manoim, Andiswa Ndoni, Imraan Valodia
Legal Topics
Merger Control, Vertical Integration, Margin Squeeze, Bundling, Market Power, Retail and Wholesale Data Services
Competition Law Commercial and Corporate Telecoms and Media Merger Control Vertical Integration Margin Squeeze Bundling Market Power +1 more

Case Brief

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Parties

Mobile Telephone Networks (Pty) Ltd

Applicant

Afrihost (Pty) Ltd

Respondent

Procedural Posture

Merger Review / Final Determination

Legal Issues

  1. 1 Whether the proposed acquisition of Afrihost by MTN is likely to substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the transaction raises concerns regarding margin squeeze or exclusionary conduct in the telecommunications sector.
  3. 3 Whether any public interest issues arise from the proposed transaction.

Ratio Decidendi

The Tribunal found that the proposed acquisition would not substantially prevent or lessen competition in the relevant markets. The merged entity's market shares in hosting services and retail ADSL and mobile data services were found to be low, and both MTN and Afrihost would continue to be constrained by other large competitors. The vertical relationship between MTN and Afrihost did not raise significant exclusionary concerns, as MTN lacked sufficient market power at the wholesale level to foreclose rivals, and incentives for margin squeeze were minimal. The Tribunal concurred with the Commission's assessment that bundling would not be exclusionary and could be pro-competitive. No public...

Court Disposition

The proposed transaction is approved unconditionally.

Orders

  • The acquisition by Mobile Telephone Networks (Pty) Ltd of Afrihost (Pty) Ltd is approved without conditions.