19 April 2010 by

Second Tribunal finding against SAA paves way for civil claims

The Tribunal has recently declared SAA's incentive schemes during the period 1 June 2001 - 31 March 2005 to be an abuse of dominance in that they induced travel agents not to deal with SAA's rivals. 

The finding follows a similar decision relating to incentive schemes in place from 1999 to 31 May 2001. Although SAA had previously entered into a consent order relating to the period 1 June 2001-31 March 2005, and paid a penalty of R15 million, SAA did not admit to any contravention of the Act. Consequently, the consent order could not form the basis of a civil claim.

In order to seek civil damages on competition law grounds, a party must first obtain a declaratory order from the Tribunal that the conduct constituted a prohibited practice. It was this requirement that propelled Nationwide and Comair to refer the previously settled complaint to the Tribunal for a full-blown hearing. Comair and Nationwide did not ask for a penalty to be imposed and the decision is solely a declaratory order indicating that the SAA incentive schemes were in violation of section 8(d)(i) of the Act.

Now armed with a declaratory order, the way is clear for Nationwide and Comair to pursue a damages claim against SAA.

Chris Charter, Director, Competition
Scarlate Nkiwane, Associate, Competition 

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