Vodacom Services Provider Company (Pty) Ltd / Vodacom Properties No.2 (Pty) Ltd and Africell Cellular Services (Pty) Ltd (48/LM/Jun06) [2006] ZACT 72 (23 August 2006)

Vodacom Services Provider Company (Pty) Ltd / Vodacom Properties No.2 (Pty) Ltd and Africell Cellular Services (Pty) Ltd (48/LM/Jun06) [2006] ZACT 72 (23 August 2006)

The Tribunal found that the merger between Vodacom Service Provider Company (Pty) Ltd, Vodacom Properties No.2 (Pty) Ltd, and Africell Cellular Services (Pty) Ltd would not result in a substantial lessening of competition. The horizontal overlap was limited to intra-brand competition, as Africell's outlets sold Vodacom airtime exclusively. Vertical integration would not foreclose other network operators or retailers, since Africell was already an exclusive dealer of Vodacom. The Commission's investigation confirmed that no foreclosure would occur. Public interest concerns, particularly regarding employment, were addressed by the parties' commitment to transfer employees or offer severance...

Citation
[2006] ZACT 72
Parties
Applicant: Vodacom Services Provider Company (Pty) Ltd; Applicant: Vodacom Properties No.2 (Pty) Ltd; Respondent: Africell Cellular Services (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
23 August 2006
Case Number
48/LM/Jun06
Procedural Posture
Merger Control / Merger Approval
Outcome
Merger unconditionally approved.
Judges
DH Lewis, Y Carrim, M Mokuena
Legal Topics
Merger Control, Vertical Integration, Horizontal Overlap, Intra Brand Competition, Public Interest Employment
Competition Law Commercial and Corporate Merger Control Vertical Integration Horizontal Overlap Intra Brand Competition Public Interest Employment

Case Brief

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Parties

Vodacom Services Provider Company (Pty) Ltd

Applicant

Vodacom Properties No.2 (Pty) Ltd

Applicant

Africell Cellular Services (Pty) Ltd

Respondent

Procedural Posture

Merger Control / Merger Approval

Legal Issues

  1. 1 Whether the proposed merger will result in a substantial lessening of competition in the relevant market.
  2. 2 Whether the transaction will negatively impact employment or other public interest factors.
  3. 3 Whether the merger will result in foreclosure of other network operators or retailers.

Ratio Decidendi

The Tribunal found that the merger between Vodacom Service Provider Company (Pty) Ltd, Vodacom Properties No.2 (Pty) Ltd, and Africell Cellular Services (Pty) Ltd would not result in a substantial lessening of competition. The horizontal overlap was limited to intra-brand competition, as Africell's outlets sold Vodacom airtime exclusively. Vertical integration would not foreclose other network operators or retailers, since Africell was already an exclusive dealer of Vodacom. The Commission's investigation confirmed that no foreclosure would occur. Public interest concerns, particularly regarding employment, were addressed by the parties' commitment to transfer employees or offer severance...

Court Disposition

Merger unconditionally approved.

Orders

  • The proposed merger between Vodacom Service Provider Company (Pty) Ltd, Vodacom Properties No.2 (Pty) Ltd, and Africell Cellular Services (Pty) Ltd is unconditionally approved.