26 October 2016 by Competition Alert

Commission impossible? – Does the commission have the statutory powers to refer a complaint to the tribunal?

The Competition Appeal Court (CAC) has recently dismissed an application brought by Computicket (Pty) Limited (Computicket), for the setting aside of the Competition Commission’s (Commission) application for the production of certain documents, pursuant to a referral to the Competition Tribunal (Tribunal).

The leading ticket dealer has defended allegations of anti-competitive practices, which allegations have been levelled against it as far back as 2008 by some of its competitors, and which became the subject matter of Commission’s investigations in 2010. The Commission subsequently referred the complaint to the Tribunal. Computicket challenged the referral on the basis that the Commission as an institution has no statutory powers to make such a referral, relying on s50(2)(a) of the Competition Act, 1998 (Act) which reads that “within one year after a complaint was submitted to it, the Commissioner must subject to subsection (3), refer the complaint to the Competition Tribunal, if it determines that a prohibited practice has been established”. The Commission dismissed this argument, saying that a literal interpretation of this provision could not have been the intention of the Legislature, and that the reference to a Commissioner was clearly a drafting error considering that subsections (1) and (3) refer to the Commission’s referral.

The CAC was thus tasked with interpreting this particular section, so as to determine whether in fact the Commission was in breach of the statutory provisions, thus rendering the referral invalid and of no force or effect. In doing so, it considered the process of a complaint, and by whom such a complaint is made in terms of the Act.

Pursuant to an initiation of a complaint, either the Commissioner or the complainant may submit a referral. The CAC’s interpretation of subsection (1) is that “where the Commissioner has initiated the complaint, the complaint can only be referred by the Commission”. The CAC also highlighted the fact that the Commissioner is by definition a part of the Commission as an institution.

Computicket’s arguments were received as unconvincing, and the Tribunal favoured the Commission’s interpretation of this section of the Act. The application was accordingly dismissed and thus either the Commission as an institution or the Commissioner as an office of the institution is granted the statutory powers to refer a complaint to the Tribunal.

This interpretative approach favours the intention of the Legislature and gives a practical and holistic effect to the provisions of the Act.

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