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CityPress - - Business - DEWALD VAN RENS­BURG dewald.vrens­burg@city­press.co.za see box).

etro­chem­i­cal gi­ant Sa­sol rid it­self of half a bil­lion rand in li­a­bil­ity this week – and has prob­a­bly suc­ceeded in squash­ing gov­ern­ment’s hopes that com­pe­ti­tion courts will play a defin­ing part in ex­tract­ing de­vel­op­men­tal prices from for­mer state-owned mo­nop­o­lies.

Com­pe­ti­tion author­i­ties can­not be “price reg­u­la­tors” and should stop al­low­ing econ­o­mists to pre­tend that they are le­gal ex­perts, de­clared Com­pe­ti­tion Ap­peal Court Judge Pres­i­dent Dennis Davis.

In a harsh judg­ment re­leased on Thurs­day, he over­turned two fines to­talling R534 mil­lion, which was im­posed on Sa­sol by the Com­pe­ti­tion Tri­bunal last year.

The fines re­lated to charges of “ex­ces­sive pric­ing”, a neb­u­lous con­cept tied to tech­ni­cal and the­o­ret­i­cal pre­sump­tions about the “real eco­nomic value” of a prod­uct (

The Com­pe­ti­tion Com­mis­sion, which brought the case, and the tri­bunal that judged it, came in for a drub­bing from Davis.

He found that the tri­bunal’s de­ci­sion to fine Sa­sol was “hard to un­der­stand” and ap­par­ently based on a very se­lec­tive read­ing of the one other ma­jor judg­ment in South Africa around ex­ces­sive pric­ing – Davis’ own 2007 dis­missal of a case against ArcelorMit­tal SA.

The tri­bunal had ap­par­ently not read his ear­lier ArcelorMit­tal SA judg­ment prop­erly, Davis sug­gested in his com­ments this week.

ArcelorMit­tal SA and Sa­sol are the two ma­jor for­mer state-owned mo­nop­o­lies that have been in the gov­ern­ment’s cross hairs for al­leged abuse of their pub­licly funded dom­i­nance in the econ­omy.

Get­ting both Sa­sol and Mit­tal to adopt some­thing like a de­vel­op­men­tal pric­ing model has been a long-stand­ing as­pi­ra­tion in South African pol­icy cir­cles.

When the Sa­sol case went to the tri­bunal in 2013, of­fi­cials in the depart­ment of trade and in­dus­try couched it in terms of South Africa claim­ing its right­ful ad­van­tage as a re­sult of his­tor­i­cally state-sub­sidised in­dus­tries.

A scheme to di­rectly reg­u­late the price of propy­lene if the com­pe­ti­tion author­i­ties did not im­pose a sat­is­fac­tory rem­edy was be­ing dis­cussed, a gov­ern­ment source said at the time.

“A great deal was made by the com­mis­sion and the tri­bunal with re­gard to the ori­gin of the ap­pel­lant’s dom­i­nance, in par­tic­u­lar the history of state sup­port,” said Davis.

The ev­i­dence around what con­sti­tuted the eco­nomic value of Sa­sol’s propy­lene was, how­ever, found to be flimsy.

Davis laid into the tes­ti­mony of the com­mis­sion’s eco­nomic ex­pert Si­mon Roberts, crit­i­cis­ing his “un­for­tu­nate ten­dency” to “pro­vide the tri­bunal with his le­gal ex­per­tise

EX­PERT VIEW Judge Dennis Davis

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