ZA Online Store Proprietary Limited v Shock Proof Investment 202 Proprietary Limited (LM066JUL22) [2022] ZACT 103 (29 September 2022)

ZA Online Store Proprietary Limited v Shock Proof Investment 202 Proprietary Limited (LM066JUL22) [2022] ZACT 103 (29 September 2022)

The Tribunal found that the proposed transaction would not result in a substantial prevention or lessening of competition in any relevant market. The horizontal overlaps in the sale of cellular phones and IT hardware were mitigated by the presence of numerous alternative resellers and distributors, including other Apple Authorised Resellers and major mobile network operators. The vertical overlap, arising from Core's role as an authorised distributor to Digicape, did not raise input foreclosure concerns because Apple Inc. independently identifies and contracts with authorised resellers, and Core supplies all such resellers on behalf of Apple. There was no evidence of customer foreclosure,...

Citation
[2022] ZACT 103
Parties
Applicant: ZA Online Store Proprietary Limited; Respondent: Shock Proof Investment 202 Proprietary Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
29 September 2022
Case Number
LM066JUL22
Procedural Posture
Large Merger / Final Determination
Outcome
The merger is approved unconditionally.
Judges
Yasmin Carrim, A Ndoni, I Valodia
Legal Topics
Large Merger Review, Horizontal Overlap, Vertical Overlap, Input Foreclosure, Customer Foreclosure, Public Interest Assessment
Competition Law Commercial and Corporate Large Merger Review Horizontal Overlap Vertical Overlap Input Foreclosure Customer Foreclosure Public Interest Assessment

Case Brief

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Parties

ZA Online Store Proprietary Limited

Applicant

Shock Proof Investment 202 Proprietary Limited

Respondent

Procedural Posture

Large Merger / Final Determination

Legal Issues

  1. 1 Does the proposed acquisition of additional shares by ZA Online result in a substantial prevention or lessening of competition in the relevant markets?
  2. 2 Are there any horizontal or vertical competition concerns arising from the merger?
  3. 3 Does the transaction raise any public interest concerns, including employment or spread of ownership?

Ratio Decidendi

The Tribunal found that the proposed transaction would not result in a substantial prevention or lessening of competition in any relevant market. The horizontal overlaps in the sale of cellular phones and IT hardware were mitigated by the presence of numerous alternative resellers and distributors, including other Apple Authorised Resellers and major mobile network operators. The vertical overlap, arising from Core's role as an authorised distributor to Digicape, did not raise input foreclosure concerns because Apple Inc. independently identifies and contracts with authorised resellers, and Core supplies all such resellers on behalf of Apple. There was no evidence of customer foreclosure,...

Court Disposition

The merger is approved unconditionally.

Orders

  • The proposed transaction is approved without conditions.
  • No merger-specific retrenchments will occur as a result of the transaction.