CC Case No: 121/17 CAC Case No: 140/CAC/MAR16
In the matter between:
S.O.S SUPPORT PUBLIC BROADCASTING COALITION First Applicant
THE TRUSTEES FOR THE TIME BEING OF
THE MEDIA MONITORING PROJECT BENEFIT TRUST Second Applicant
CAXTON AND CTP PUBLISHERS AND PRINTERS LIMITED Third Applicant
and
SOUTH AFRICAN BROADCASTING CORPORATION
(SOC) LIMITED First Respondent
MULTICHOICE (PROPRIETARY) LIMITED Second Respondent
THE COMPETITION COMMISSION Third Respondent
APPLICANTS’ PRACTICE NOTE
NATURE OF THE MATTER
1 On 24 June 2016, the CAC directed the Competition Commission (‘the Commission’) to investigate whether an agreement concluded between the South African Broadcasting Corporation (SOC) Limited (‘the SABC’) and Multichoice (Proprietary) Limited (‘Multichoice’) gave rise to a notifiable merger.
2 The dispute in the present application for leave to appeal pertains to whether, in conducting this investigation, the Commission may exercise its powers of investigation in Part B of Chapter 5 of the Competition Act, 89 of 1998.
3 The applicants and the Commission argue that it can exercise these powers. The SABC and MultiChoice argue that it cannot.
4 On 28 April 2017, the Competition Appeal Court (‘the CAC’) upheld the contentions of the SABC and MultiChoice and dismissed the application before it. This is an application for leave to appeal against that decision.
ISSUES ON APPEAL
5 First, may the Commission exercise the powers contained in Part B of Chapter 5 of the Competition Act in order to investigate whether a transaction was required to be notified as a merger?
6 Second, if so, does the CAC’s June 2016 order preclude the Commission from exercising these powers and limit it to a “desktop” review of documentation furnished by the SABC and Multichoice?
7 Third, only insofar as may be necessary:
7.1 Ought the CAC to have granted a variation of the June 2016 order or issued a fresh order permitting the Commission to exercise these powers?
7.2 Ought the CAC to have granted the application to adduce further evidence?
SUMMARY OF THE APPLICANTS’ SUBMISSIONS
8 The applicants contend that:
8.1 In the ordinary course, the Commission is entitled to exercise the powers contained in Part B of Chapter 5 of the Competition Act in order to investigate whether a transaction was required to be notified as a merger;
8.2 The CAC order of June 2016 in no way precluded the Commission from exercising these powers; and
8.3 Accordingly, the declaratory relief sought by the Applicants ought to have been granted.
9 The CAC erred in three key respects in dismissing the application for declaratory relief.
10 First, the CAC erred in framing the essential issue for determination as being whether the June 2016 order “granted” the Commission powers to use its investigative powers under the Competition Act.
10.1 That was, with respect, the wrong place to start. The Commission’s powers of investigation are derived from the Competition Act, not from the CAC.
10.2 The correct starting point was therefore to start by considering what the ordinary powers of the Commission were and then to consider whether the CAC’s June 2016 order prohibited the Commission from exercising these powers.
11 Second, the CAC erred in holding that the Commission’s investigation into the agreement was “clearly and unambiguously” constrained by its order to being a “desktop” exercise.
11.1 The CAC ought to have found that its order did not prohibit the Commission from exercising its ordinary investigative powers.
11.2 Indeed, given the powerful separation of powers concerns at play in relation to an independent and expert regulator such as the Commission, it is doubtful that the CAC could even validly have
purported to prohibit the Commission from exercising its ordinary investigative powers in the absence of extraordinarily compelling justification.
12 Third, the CAC failed to interpret its order in accordance with the established principle that the rule of law requires that court orders provide effective relief. The CAC’s interpretation of its order fundamentally undermines the effectiveness of the relief granted in this case, as the Commission’s evidence before it made patently clear.
ESTIMATED DURATION OF THE HEARING
13 One day.
PARTS OF THE RECORD WHICH NEED TO BE READ
14 There is a dispute between the parties regarding the ambit of the relevant record. The correspondence in this regard appears in vol 21, pp 1804- 1818.
15 As is explained in that correspondence:
15.1 The applicants are of the view that this Court only needs to consider the June 2016 judgment of the CAC (vol 15) and the papers filed thereafter (vols 16 – 21). The letter from the applicant’s attorneys of
13 September 2017 explaining this position was erroneously omitted from the record and is attached hereto, marked “A”.
15.2 By contrast, MultiChoice insists that the entire record that led to the CAC’s June 2016 judgment be placed before this Court (vols 1 – 14).
MultiChoice’s position appears from the letter from its attorneys of 14 September (vol 21, pp 1814-1815).
STEVEN BUDLENDER LUKE KELLY
Applicants’ counsel Chambers
Johannesburg and Cape Town 6 October 2017