Telkom SA Ltd and Another and Praysa Trade 1062 (Pty) Ltd (81/LM/Aug00) [2000] ZACT 43 (6 October 2000)

Telkom SA Ltd and Another and Praysa Trade 1062 (Pty) Ltd (81/LM/Aug00) [2000] ZACT 43 (6 October 2000)

The Tribunal found that the merger does not result in a substantial lessening or prevention of competition in either the property or facilities management services markets. The transaction expands market reach rather than shifting market share, and the exclusive arrangements apply only to TFMC, not its shareholders, who remain free to compete. The Tribunal rejected Infracom's arguments regarding anti-competitive conduct and essential facility doctrine, noting that replacing one exclusive contract with another does not affect competition. The Tribunal also determined that employment concerns were adequately addressed by the inclusion of a 20-month no-retrenchment clause for transferred...

Citation
[2000] ZACT 43
Parties
Applicant: Telkom SA Ltd; Applicant: TPI Investments; Applicant: Praysa Trade 1062 (Pty) Ltd; Respondent: Communications Workers Union (CWU); Respondent: Infracom (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
6 October 2000
Case Number
81/LM/Aug00
Procedural Posture
Large Merger / Approval With Conditions
Outcome
Merger approved subject to conditions protecting employment and enforceability of employee rights.
Judges
D. H. Lewis, N.M. Manoim, P. Maponya
Legal Topics
Large Merger Review, Exclusive Dealing, Public Interest Employment, Essential Facility Doctrine, Outsourcing, Employee Protection
Competition Law Commercial and Corporate Large Merger Review Exclusive Dealing Public Interest Employment Essential Facility Doctrine Outsourcing Employee Protection

Case Brief

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Parties

Telkom SA Ltd

Applicant

TPI Investments

Applicant

Praysa Trade 1062 (Pty) Ltd

Applicant

Communications Workers Union (CWU)

Respondent

Infracom (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Approval With Conditions

Legal Issues

  1. 1 Whether the merger between Telkom SA Ltd, TPI Investments, and Praysa Trade 1062 (Pty) Ltd substantially lessens or prevents competition in the relevant markets.
  2. 2 Whether the exclusive facilities management agreement between Telkom and TFMC constitutes an anti-competitive restrictive practice.
  3. 3 Whether the merger adversely affects employment and public interest considerations under the Competition Act.

Ratio Decidendi

The Tribunal found that the merger does not result in a substantial lessening or prevention of competition in either the property or facilities management services markets. The transaction expands market reach rather than shifting market share, and the exclusive arrangements apply only to TFMC, not its shareholders, who remain free to compete. The Tribunal rejected Infracom's arguments regarding anti-competitive conduct and essential facility doctrine, noting that replacing one exclusive contract with another does not affect competition. The Tribunal also determined that employment concerns were adequately addressed by the inclusion of a 20-month no-retrenchment clause for transferred...

Court Disposition

Merger approved subject to conditions protecting employment and enforceability of employee rights.

Orders

  • TFMC must not retrench any employee transferred from Telkom SA Ltd as part of this transaction for a period of twenty (20) months from the effective date of the merger.
  • During the 20-month period, the employment protection obligation must be enforceable by each transferred employee against TFMC and, if necessary, against its shareholders Rebserve Ltd and WS Atkins International Ltd.