7 December 2009 by

The Competition Appeal Court dismisses Senwes' appeal - but no fine in the offing

The Competition Appeal Court (CAC) has recently dismissed Senwes' appeal against the Tribunal's finding, in February of this year, that Senwes had abused its dominant position in the grain storage and trading markets by engaging in a margin squeeze in contravention of the Act. A margin squeeze can occur when a vertically integrated firm (such as Senwes), which is dominant in the upstream market, supplies an essential input to downstream rivals at prices which prevent the latter from earning a viable margin.

As the Tribunal was called upon to determine whether Senwes' impugned conduct constituted an anti-competitive practice, it has not yet imposed a remedy on Senwes, since the imposition of a remedy was postponed pending the appeal to the CAC. In terms of the Act, however, firms found to have engaged in a margin squeeze may not be fined for a first time offence. In this regard, the CAC also rejected the Commission's cross-appeal against the Tribunal's decision that Senwes' conduct should be considered under section 8(c) of the Act, with the Commission arguing that the conduct should rather have been classified as a species of price discrimination and assessed under other provisions of the Act (which carry a fine for a first offence).

Chris Charter, Director Competition and
Pia Harvey, Senior Associate, Competition

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