Vexall Proprietary Limited v Business Connexion Proprietary Limited and Another (IR119Oct19) [2020] ZACT 85 (12 February 2020)
- Citation
- [2020] ZACT 85
- Status
- Order
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- Yasmin Carrim, Anton Roskam, Halton Cheadle
- Case number
- IR119Oct19
More details
- Court
- Competition Tribunal
- Panel
- Yasmin Carrim, Anton Roskam, Halton Cheadle
- Case number
- IR119Oct19
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that BCX's practice of selling Unisolv licences on condition that customers also purchase value-added services constituted a prima facie tying arrangement and potential abuse of dominance under the Competition Act. The applicant demonstrated imminent harm to competition and customers if the conduct continued. The Tribunal was satisfied that the requirements for interim relief under section 49C were met and accordingly prohibited BCX from imposing such conditions for a period of six months or until the complaint hearing is concluded, whichever occurs first. Costs were awarded to the applicant.
Court disposition
Interim relief granted prohibiting BCX from tying the sale of Unisolv licences to value-added services; costs awarded to applicant.
Orders
- BCX is prohibited from selling or offering a Unisolv licence on condition that a customer purchases value-added services from BCX.
- This prohibition remains in force for six months from the date of the order or until the conclusion of a hearing into the complaint, whichever is earlier.
- BCX must pay the applicant's costs of the application.
02
Material facts
Parties
Vexall Proprietary Limited
ApplicantBusiness Connexion Proprietary Limited
RespondentCompetition Commission
Respondent03
Procedural history
Posture
Urgent Application / Order Issued After Hearing
04
Questions and positions
Legal issues
- 01
Whether BCX's sale of Unisolv licences was unlawfully tied to the purchase of value-added services.
- 02
Whether interim relief should be granted to prohibit BCX from imposing such tying arrangements.
- 03
Whether the applicant is entitled to costs.
Party arguments
- Applicant
- The applicant argued that BCX, as the supplier of Unisolv licences, unlawfully required customers to purchase value-added services as a condition for obtaining the licence. This conduct constituted an abuse of dominance and anti-competitive tying, warranting urgent interim relief to prevent further harm to competition and customers. The applicant sought an order prohibiting BCX from continuing this practice and requested costs.
- Respondent
- BCX contended that its conduct did not amount to unlawful tying and that the provision of value-added services was not a mandatory condition for the sale of Unisolv licences. BCX argued that interim relief was unwarranted as there was no imminent harm or abuse of dominance. The Competition Commission supported the respondent's position and opposed the granting of interim relief.
05
Court’s reasoning
Legal principles
- 01
Competition Act 89 of 1998, section 49C
Interim relief may be granted under section 49C of the Competition Act where there is prima facie evidence of prohibited conduct and imminent harm to competition.
- 02
Competition Act 89 of 1998
Tying arrangements by a dominant firm may constitute an abuse of dominance if they restrict competition or coerce customers into purchasing unwanted products or services.
- 03
Competition Tribunal Rules
Costs may be awarded to the successful applicant in interim relief proceedings before the Tribunal.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that BCX's practice of selling Unisolv licences on condition that customers also purchase value-added services constituted a prima facie tying arrangement and potential abuse of dominance under the Competition Act. The applicant demonstrated imminent harm to competition and customers if the conduct continued. The Tribunal was satisfied that the requirements for interim relief under section 49C were met and accordingly prohibited BCX from imposing such conditions for a period of six months or until the complaint hearing is concluded, whichever occurs first. Costs were awarded to the applicant.
Obiter and limits
- The Tribunal noted that interim relief is a temporary measure and does not constitute a final determination of the merits of the complaint.
- The order is intended to preserve the status quo and prevent further harm pending the outcome of the main complaint proceedings.
Court disposition
Interim relief granted prohibiting BCX from tying the sale of Unisolv licences to value-added services; costs awarded to applicant.
- BCX is prohibited from selling or offering a Unisolv licence on condition that a customer purchases value-added services from BCX.
- This prohibition remains in force for six months from the date of the order or until the conclusion of a hearing into the complaint, whichever is earlier.
- BCX must pay the applicant's costs of the application.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Order
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: IR119Oct19
In the matter between:
VEXALL
PROPRIETARY LIMITED Applicant
And
BUSINESS CONNEXION PROPRIETARY LIMITED First
Respondent
THE COMPETITION COMMISSION Second
Respondent
Panel: Yasmin Carrim (Presiding Member), Anton Roskam (Tribunal Member),Halton Cheadle (Tribunal Member)
Heard on: 3 February 2020
Order issued on: 12 February 2020
ORDER
KINDLY TAKE NOTICE THAT having heard the parties, the Competition Tribunal issues the following order in terms of section 49C of the Competition Act 89 of 1998, as amended ("the Act") in the following terms:
1. For the purposes of this order the following terms mean-
a. 'BCX' means the First Respondent;
b. 'complaint' means the complaint referred to the Competition Commission by the Applicant on 16 October 2019;
c. 'customer' means a customer of the Unisolv licence supplied by BCX;
d. 'Unisolv licence' means the use of the Unisolv software and any upgrades, bug fixes, repairs or additional coding to the software;
e. 'software support services' means those support services related to the upgrading and repairing of the Unisolv software provided by BCX;
f. 'value added services' includes BCX's Data Bureau Service, its Electronic Remittance Services and support services other than software support services.
2. From the date of this order BCX is prohibited from selling or offering a Unisolv license on condition that a customer purchases value-added services from BCX.
3. The order in paragraph 2 remains in force for 6 months from date of this order or the conclusion of a hearing into the complaint, whichever is the earlier.
4. BCX to pay Applicant's costs of the application.
Ms Yasmin Carrim
Mr Anton Roskam and Prof. Halton Cheadle concurring.
Date: 12 February 2020
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