Abstract
Important pronouncements of legal principle were recently made by the Competition Appeal Court and Constitutional Court on the determination of predatory pricing under section 8 of the Competition Act 89 of 1998. These pronouncements must now be seen in the context of the subsequent commencement of certain provisions of the Competition Amendment Act 18 of 2018, which affect predatory pricing cases under section 8 of the Act. In light of these developments, the main aim of this series of three articles is to evaluate the law relating to the economic concept of predatory pricing under the Competition Act. In this context, the main constituent elements of a predatory pricing case – namely dominance, identifying an exclusionary abuse, and predatory prices – are discussed in three parts. Part 1 has critically evaluated the law on the determination of single-firm dominance under section 7 of the Competition Act. Part 2 starts to focus on the abuse analysis and discusses the basic forms of abuse, the meaning of abuse, tests that have been developed to identify exclusionary abuse, the criticism of the traditional theory of predatory pricing, the main strategic economic theories of predatory pricing and non-pricing theories of predation. Part 3 then specifically deals with the law of predatory prices under section 8(c) and (d)(iv) of the Competition Act. Pursuant to section 1(3) of the Competition Act, when interpreting or applying the Competition Act, appropriate foreign and international law may be considered. This is complementary to section 1(2)(a), which directs that the Competition Act must be interpreted in a manner that is consistent with the Constitution and gives effect to the purposes set out in section 2. In light hereof, where appropriate, the South African position is mainly compared with the position in the European Union and the United States.
Highlights
In light of the Media[24] case,[1] in which several important pronouncements of legal principle were made, as well the subsequent commencement of certain provisions of the Competition Amendment Act 18 of 2018, the aim of this series of three articles is to evaluate the law and elements relating to the economic concept of predatory pricing under the Competition Act 89 of 1998
The other specific types of exclusionary act, are prohibited if the complainant can show that the act in question had an anticompetitive effect and if the respondent fails to show that the act resulted in technological, efficiency or other pro-competitive gains that outweigh the anti-competitive effect of its act
This section prohibits all those exclusionary acts (including predatory pricing allegations that are not listed in section 8(d)), but only if the complainant shows that the anti-competitive effect of the act in question outweighs any technological, efficiency or other pro-competitive gain shown by the respondent
Summary
Important pronouncements of legal principle were recently made by the Competition Appeal Court and Constitutional Court on the determination of predatory pricing under section 8 of the Competition Act 89 of 1998. Part 3 deals with the law of predatory prices under section 8(c) and (d)(iv) of the Competition Act. Pursuant to section 1(3) of the Competition Act, when interpreting or applying the Competition Act, appropriate foreign and international law may be considered.
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