A critical analysis of the competition authorities’ treatment of the element of causation in exclusionary abuse cases

• Jurisdiction: South Africa
• Citation: (2020) 6(2) JCCL&P 49
• Published date: 31 March 2021
• Pages: 49-81
• DOI: https://doi.org/10.47348/JCCL/V6/i2a2
• Date: 31 March 2021

https://doi.org/10.47348/JCCL/V6/i2a2

49

A CRITICAL ANALYSIS OF THE

COMPETITION AUTHORITIES’

TREATMENT OF THE ELEMENT OF

CAUSATION IN EXCLUSIONARY

ABUSE CASES

SIBUSISO RADEBE*

Research Assistant, the Mandela Institute, University of the

Witwatersrand, Johannesburg

ABSTRACT

It is trite law that in order for an impugned act to be condemned

in terms of the exclusionary abuse prohibition, entrenched under

the Competition Act 89 of 1998, there must be evidence evincing

that the said act caused some anti-competitive effect and that the

anti-competitive effect caused by the said act outweighs any pro-

competitive effect caused by it. This position makes the element of

causation of central importance in the determination of whether or

not to condemn an impugned act in terms of the exclusionary abuse

prohibition. However, despite the pivotal role played by causation in

the resolution of exclusionary abuse cases, the competition authorities

have repeatedly neglected to, inter alia, expound the framework of

causation envisaged under the exclusionary abuse prohibition and

state the legal principles upon which their conclusions of causation are

based. This neglect has caused some competition law commentators

to argue that the competition authorities have failed to assess the

element of causation in exclusionary abuse cases. This paper examines

exclusionary abuse case law through the lens of the common-law

framework and tests for assessing causation and demonstrates that,

despite the criticism levelled against the competition authorities,

first, the authorities do in fact have a framework of causation and

tests for assessing causation; secondly, the authorities have been

employing the framework referred to above consistently since its

* BSc(Wits) LLB(Wits) LLM(Wits). This paper is a modified version of the

author’s unpublished LLM Research Report, submitted at the University of the

Witwatersrand, Johannesburg, in January 2020, in partial fulfilment of the

requirements of the degree.

(2020) 6(2) JCCL&P 49

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50 (2020) 6(2) JOURNAL OF CORPORATE AND COMMERCIAL LAW & PRACTICE

https://doi.org/10.47348/JCCL/V6/i2a2

first appearance in the case law; and thirdly, the said framework is

consistent with the framework of causation envisaged, or apparently

envisaged, under the exclusionary abuse prohibition entrenched in

the Competition Act 89 of 1998.

Keywords: exclusionary abuse prohibition; Competition Act 1998;

anti-competitive effect; pro-competitive effect; a framework of

causation.

I INTRODUCTION

It is trite law that in order for an impugned act to be condemned

in terms of the exclusionary abuse prohibition entrenched under

the Competition Act 89 of 1998 (the Act),1 there must be evidence

evincing that the said act caused some anti-competitive effect and

that the anti-competitive effect caused by the said act outweighs any

pro-competitive effect caused by it.2 This position makes the element

of causation of central importance in the determination of whether

or not to condemn an impugned act in terms of the exclusionary

abuse prohibition,3 as in the absence of knowledge of which anti-

competitive effects were caused by the impugned act and which pro-

competitive effects were caused by the impugned act, the impugned

act’s effects cannot be weighed and, therefore, the issue of which

effects outweigh which cannot be resolved, with the effect that no

decision can be made on whether or not to condemn the impugned

act.4

Despite the significance of the element of causation to the fabric

of the exclusionary abuse prohibition, the competition authorities

have repeatedly neglected to, first, expound the framework of

causation envisaged under the exclusionary abuse prohibition;

secondly, provide and expound on the nature of the tests envisaged

for assessing causation under the said framework; and thirdly, state

the legal principles upon which their conclusions of causation in

exclusionary abuse cases are based.5 As a result of the competition

1 See s 8(1)(c) and (d) of the Competition Act 89 of 1998 (the Act).

2 See Competition Commission v South African Airways (Pty) Ltd [2005] 2 CPLR 303

(CT) (hereafter SAA) paras 132–5; Computicket (Pty) Ltd v Competition Commission

of South Africa [2019] JOL 46068 (CAC) (hereinafter Computicket (CAC)) paras 25–

6.

3 See Computicket (CAC) supra note 2 paras 25–6.

4 See Competition Commission v Senwes Ltd [2009] 1 CPLR 18 (CT) (hereafter Senwes

(CT)) para 173, where the Competition Tribunal remarked that: ‘One can only

balance considerations of anti-competitive effect versus pro-competitive gain

once one has two weights to place on either side of the scale’. See also SAA supra

note 2 para 110.

5 See generally Phumudzo Munyai ‘The lack of an appropriate causation framework

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51

A CRITICAL ANALYSIS OF THE COMPETITION AUTHORITIES’ TREATMENT

OF THE ELEMENT OF CAUSATION IN EXCLUSIONARY ABUSE CASES

https://doi.org/10.47348/JCCL/V6/i2a2

authorities’ neglect, there is a great deal of confusion surrounding

this crucial element.6

The aim of this work is, thus, to investigate, first, whether the

competition authorities have a framework for assessing causation;

secondly, the tests used by the competition authorities to assess

causation under the said framework; and thirdly, whether the said

framework and tests are consistent with the framework of causation

and the tests for assessing causation envisaged, or apparently

envisaged, under the exclusionary abuse prohibition.

To this end, Part II will provide a discussion on the common-

law element of causation to provide a means through which one

can evaluate and understand the reasoning of the competition

authorities in exclusionary abuse cases, particularly in the cases that

will be discussed in Part III. Part III will provide a discussion on the

judgments of the Competition Tribunal in Competition Commission

v South African Airways (Pty) Ltd7 and Competition Commission v

British American Tobacco South Africa (Pty) Ltd,8 as these judgments

have been the subject of much of the controversy surrounding the

element of causation in exclusionary abuse cases.9 Part III will also

provide a brief discussion on the Competition Tribunal’s judgment

in Competition Commission v Media24 Ltd,10 with a view of providing

a balanced account of the Tribunal’s approach to the element of

causation in exclusionary abuse cases. Part IV will provide an analysis

of the definition of an ‘exclusionary act’ entrenched in s 1 of the

Act with the aim of determining the framework of causation and

the tests for assessing causation envisaged, or apparently envisaged,

under the exclusionary abuse prohibition. Thereafter, Part V will

conclude by arguing that the framework of causation and the tests

for assessing causation employed by the competition authorities are

consistent with the framework of causation and the tests for assessing

causation discernible from the definition of an exclusionary act and,

therefore, the authorities’ framework and tests must be consistent

with the framework and the tests envisaged under the exclusionary

abuse prohibition.

in competition law proceedings under the Competition Act, 1998’ (2017) 38(3)

Obiter 485; See Philip Sutherland & Katharine Kemp Competition Law of South

Africa (2017) para 7.11.

6 See Sutherland & Kemp op cit note 5 at para 7.11. See also, generally, Munyai op

cit note 5.

7 SAA supra note 2.

8 Competition Commission v British American Tobacco South Africa (Pty) Ltd (05/CR/

Feb05) (hereafter BATSA).

9 See Sutherland & Kemp op cit note 5 at para 7.11; Munyai op cit note 5.

10 Competition Commission v Media24 Ltd [2015] 2 CPLR 409 (CT) (hereafter Media24

(CT)).

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