What exactly did Vodacom do wrong?
THE COMPETITION Commission’s prosecution of the abuse of dominance cases has been been dismal, impulsive and without much appreciation for the remit of Section 8 of the Competition Act.
In the past 20 years, the competition authorities set about building and promoting an efficient, adaptable and developed economy, including providing consumers with competitive prices and product choices, and ensuring that SMMEs have an equitable opportunity to take part in the economy.
Of the 32 decided cases lodged with the commission before last year on “abuse of dominance”, only seven were successful.
Twenty-two cases were dismissed and the others were settled outside the normal remit of competition law adjudication.
The commission initiated 12 of these as a complainant.
Its complaint against Vodacom is couched in insinuations that Vodacom might have abused its dominance.
Exactly what Vodacom did in terms of Section 8 of the Competition Act remains mystifying.
It is thus difficult for rational South Africans to engage in the debate when the alleged conduct is framed in ambivalence.
Nothing in Vodacom’s behaviour suggests that there was “abuse of dominance”.
Section 8’s scope is far-reaching and wide. It entails a constellation of unending sub-sections, which prima facie, are devoid of Vodacom’s alleged conduct.
Section 8 enlists the following punishable conduct in respect of “abuse of dominance”:
Where a dominant firm charges an excessive price to the detriment of consumers, refuses to give a competitor access to an essential facility when it is economically feasible to do so.
Engages in an exclusionary act, which entails requiring or inducing a supplier or customer not to deal with a competitor.
Refusing to supply scarce goods to a competitor when supplying the goods is economically feasible.
Selling goods or services on condition that the buyer purchases separate goods or services unrelated to the object of a contract, or forcing a buyer to accept a condition unrelated to the object of a contract.
Selling goods or services below their marginal or average variable cost, or buying up a scarce supply of intermediate goods or resource required by a competitor.
Read textually and purpos- ively, the application of Section 8 of the act doesn’t locate any of the enunciated subsections on which the purported Competition Commission investigation was based.
The Competition Commission, armed with the economic experts and market valuators, cannot continue unabated with its spurious prosecution of impropriety against firms.
It has to establish merit to a complaint, make rebuttals, corroborate evidence and, as is standard practice, rely on the decided cases on “abuse of dominance”.
It has to understand its role in an economy that is closed and contrived. Mandla Galo
The complaint is couched in insinuations
MIXED SIGNALS: The Competition Commission’s complaint against Vodacom that it might have abused its dominance is framed in ambivalence, says the writer.