Tribunal argues right to rule on "margin squeeze"

Business Day reports that the Competition Commission told the Constitutional Court that the main focus of a hearing before the Competition Tribunal was to find the truth and this meant the tribunal had investigative powers to establish it.

The commission was applying for leave to appeal against a Supreme Court of Appeal judgment on the tribunal's finding that silo provider Senwes's actions were "margin squeeze".

"Margin squeeze" occurs when there is such a narrow margin between an integrated provider's price for selling essential inputs to a rival and its downstream price that the rival cannot survive or effectively compete. The Supreme Court of Appeal ruled that such conduct was not covered by the commission's referral and the tribunal finding was therefore not competent. On its part, the commission argues that it included the complaint of margin squeeze in the complaint it referred to the tribunal.

According to Business Day, Senwes, a company that supplies silo capacity to grain farmers and grain traders but also trades in grain, argued the complaint of margin squeeze was not the issue that the commission referred to the tribunal and that it was therefore not required to plead on it. The commission argued before the Constitutional Court, however, that once a matter had been placed before the tribunal, it was entitled to consider and adjudicate any potentially prohibited conduct that arose in the course of that referral.

Read the full article on www.businessday.co.za.