23 August 2010 by

Tribunal dismisses Media 24's application to set aside the Commission's summons

In January 2009 Berkina Twintig (Pty) Ltd (Berkina) filed a complaint against Media 24 Limited (Media 24) for allegedly abusing its dominance. Berkina is a publisher of a newspaper called Goldnet News which competed for advertising in the Free State Goldfield's area with two publications owned and managed by Media 24, called Vista and Forum. Berkina alleged that in about 2004/2005, Media 24 cut its advertising rates for Vista and Forum below the cost of production, to the extent that Berkina was forced to close down as it was unable to respond to the cuts. 

During its investigation, the Commission issued two summonses against Media 24 requesting a wide range of information and documents. Media 24 duly responded to the first summons but challenged the second summons, alleging, inter alia, that the summons contained impermissible interrogatories and was ultra vires the powers of the Commissioner.

The argument that the summons contained impermissible interrogatories was premised on the fact that the summons (in a section dealing with documents) contained questions requiring information from Mr Van Zyl (a representative of Media 24), which questions were allegedly not susceptible to an answer by way of documents, but only by Mr Van Zyl answering questions. Media 24 argued that such an approach was impermissible as the questions were framed in the "document request" section of the summons therefore rendering the request unlawful.

The Commission argued that the objection was without substance. The Tribunal agreed with the Commission and went on further to say, even if one characterised the questions as interrogatories (and not document requests) they would be permissible in the terms of the Act which empowers the Commission both to request documents and submit the person summoned to answer interrogatories.

Another attack on the summons by Media 24 was that the information sought was void for vagueness. Media 24 argued that the portions of the summons that did not amount to interrogatories were unintelligible and overbroad. For instance, the complaint related to the Free State. However, the Commission in its summons requested information regarding publications outside the Free State area which information according to Media 24 was irrelevant to the present complaint. In addition, Media 24 argued (supported by a report by an economist) that any rate comparison across geographic areas would be meaningless given the variance in market conditions. As such, the information would be unlikely to produce statistical results that could be competently used.

The Tribunal held that this attack to the summons essentially required the Tribunal to accept Media 24's say-so regarding the outcome of the rate comparison exercise without the benefit of a trial or evidence. The point of the request in the summons, the Tribunal held, was to enable the Commission to undertake its investigation and come to a conclusion on the data.

The Tribunal acknowledged that companies under investigation are often put to considerable inconvenience to assemble documents to comply with a summons but pointed out that that burden does not invalidate the request summons.

In light of the above, the Tribunal concluded that the application was without merit and dismissed it.

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

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