Media24 welcomes ConCourt dismissal of predatory pricing appeal

The Cape Town Central City Improvement District noted Media24's revamped building, adding value to the CBD property value.
The Cape Town Central City Improvement District noted Media24's revamped building, adding value to the CBD property value.

Media24 has welcomed a Constitutional Court ruling which dismissed an application for leave to appeal against the company in a case where it was accused of engaging in predatory pricing practices.

The ruling on Wednesday followed on from a 2011 Competition Tribunal ruling that Media24's pricing was predatory.

The company had been accused by a competitor in the Welkom newspaper market, Gold Net News, of engaging in uncompetitive pricing to drive out independent publications between January 2004 and February 2009.

Media24, which was dominant in the area's newspaper market, had cut the rates that one of its publications, Forum, was charging for advertisements. Following an investigation, the Competition Commission referred a complaint to the Tribunal.

The Commission is a statutory body that investigates uncompetitive behaviour, while the Tribunal adjudicates cases.

The Competition Appeals Court, however, overturned the Tribunal's finding, on grounds that predatory pricing can only be proven through evidence of specific exclusionary conduct and the Tribunal had used an inappropriate average total cost threshold.

The Commission then sought leave to appeal against the CAC's judgement and order in the Constitutional court, arguing that the findings were contrary to the objectives of the Competition Act.

On Wednesday, the majority of the apex court's 11 judges held the view that the application raised an arguable point in law. According to a summary of the judgement released by the court, the commission was "granted leave to appeal against the judgment and order of the CAC". 

But on the merits of the case, six members of court did not uphold the appeal. The verdict was that the bid to appeal must be dismissed with costs.

"There was thus a majority decision that the application raised an arguable point of law of general public importance within this Court’s jurisdiction, that leave to appeal should be granted, and that the appeal must be dismissed with costs," stated the court in its summary. 

Commenting on the ruling, the CEO of Media24, Ishmet Davidson, said the company was "pleased with the outcome".

* Fin24 is part of News24, a subsidiary of Media24.

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