Case Comments: The Law of Unlawful Competition (Misappropriation of a Rival’s Product) and Its Constitutional Compatibility: Phumelela Gaming and Leisure Ltd v Gründlingh

• Jurisdiction: South Africa
• Author: J Neethling
• Date: 25 May 2019
• Pages: 414-421
• Published date: 25 May 2019
• Citation: (2008) 20 SA Merc LJ 414

The Law of Unlawful Competition

(Misappropriation of a Rival’s Product) and Its

Constitutional Compatibility: Phumelela

Gaming and Leisure Ltd v Gründlingh

J NEETHLING

University of South Africa

1 Introduction

Traditionally, the South African economic regime has been run largely on

the basis of a free-market economy that presupposes free competition

amongst the participants in the market (see J Neethling Van Heerden-

Neethling Unlawful Competition 2 ed (2008) at 1; Heyneman & Another v

Waterfront Marine CC & Others [2005] 2 All SA 382 (C) at 397-8). In fact, a

free market and active competition have been described as the life-blood of

commerce, and are considered to be both socially and economically desirable

(see, eg, Taylor and Horne (Pty) Ltd v Dentall (Pty) Ltd 1991 (1) SA 412 (A)

at 421-2; Premier Hangers CC v Polyoak (Pty) Ltd 1997 (1) SA 416 (A) at

426; Silver Crystal Trading (Pty) Ltd v Namibia Diamond Corporation (Pty)

Ltd 1983 (4) SA 884 (D) at 888). The emphasis on freedom of trade and

competition is also ref‌lected in the Competition Act 89 of 1998 (s 2(a)-(f)).

The principal purpose (raison d’être) of the Act is the promotion and

maintenance of competition in South Africa (see PEJ Brooks ‘Redef‌ining the

Objectives of South African Competition Law’ (2001) 34 Comparative and

International LJ of Southern Africa 295 at 306), while certain social

objectives aimed at promoting the welfare of society as a whole have also

been included (see M Brassey ‘Introduction’ in: MSM Brassey (ed)

Competition Law (2002) at 1-2). However, according to Brassey (op cit at 2),

‘the abiding assumption within competition circles is that this [social goal] is best achieved by

a system of free trade in open markets. The principal goal of competition law is to ensure that

the trade remains free and the markets are kept open’.

This position seems to have been entrenched in the 1996 Constitution with

the inclusion of the right to freedom of trade, occupation and profession (and,

by implication, free competition) in the Bill of Rights (s 22 of the Constitution

of the Republic of South Africa, 1996 (hence ‘the Constitution’); see

Affordable Medicines Trust & Others v Minister of Health & Others 2006 (3)

SA 247 (CC) at 274-6 for a clear exposition of the scope of s 22). According

to that case, s 22 has two components: the right to choose a profession, and

the right to exercise or practise the chosen profession. This right overlaps with

or is embodied in the right to the goodwill of a business, which constitutes the

basis of protection against unlawful competition in our law. This also appears

414

(2008) 20 SA Merc LJ 414

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