Competition: Newspaper dispute to set predatory pricing practice precedent
Gildenhuys Malatji is acting on behalf of the Competition Commission in this headline making case, in which Legalbrief Today reports as follows: The outcome of SA's first under-pricing case involving Media24 is being eagerly awaited by competition experts, says a Mail & Guardian report. It's a case that has seen the Reserve Bank Deputy Governor and a wide range of economists and former staff members take the stand, and it still has a way to go after the Competition Tribunal provided more time for evidence to be presented. Lawyers and advisers are hoping that a ruling by the tribunal will provide some clarity on how to define under-pricing, which falls under predatory pricing in the Competition Act, particularly as there is little international jurisprudence on the matter. This case was presented to the Competition Tribunal in 2011. Section 8(d) of the Act prohibits the 'selling (of) goods or services below their marginal or average variable cost', but there is no clarity on how this should be calculated. The Competition Commission alleges that Media24's community newspaper the Goudveld Forum was a loss-making publication that was used as a 'fighting brand', pricing its advertising below cost to undermine Free State Goldfields competitor Gold-Net News, which eventually closed. Former commission head and Corruption Watch executive David Lewis said the importance of a hearing into the loss of a relatively small Free State knock-and-drop should not be underestimated. 'This is an extremely significant case and the impact of under-pricing on the market should not be dismissed.'
To read the full article click the link below-
Mail & Guardian 26 May 2014: Knock and Drop case is big news