What ex­actly did Vo­da­com do wrong?

The Star Late Edition - - LETTERS - Cape Town

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.

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