EDITORIAL: Competition Commission overreach
‘Commission's poor decisions open the possibility that it is being influenced by politics’
You have to ask, does the Competition Commission actually know what abuse of a dominant position is? The commission is completely unabashed by its surprise announcement that it would open a case of the abuse of a dominant position against Vodacom for concluding a contract with the government to supply government employees with cellphone services. The contract is large, valued at R5bn over four years, and it is exclusive. But it was won on an open tender in which all the other cellphone companies participated. Neither was there anything in the contract that stipulated that Vodacom’s offer was conditional on it winning the contract exclusively. Most importantly, as a result of the contract, it has been estimated that the government’s costs would decline by 30%-40%. As a result of the commission’s announcement, R16bn was wiped off Vodacom’s market capitalisation at one point. Most of the loss was regained once the market began to appreciate the flimsiness of the commission’s case. But ...
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