Friday, 23 May 2008

Penal costs threat for unmerited competition claims

In "South Africa: Competition Tribunal Warns On Contrived Claims", Jowell Glyn & Marais partner Maarten Van Hoven, formerly a senior merger analyst at the Competition Commission, writes that South Africa's Competition Tribunal has sounded a warning to businesses that intervene in merger proceedings: if they do so for the purpose of harassing their competitors and delaying the conduct of legitimate business, they face punitive costs orders. The tribunal objects to enterprises which
"... file vast tracts of evidence and devise some of the most exotic theories of competitive harm known to competition law. Where competition issues fail, the public interest is invoked with enthusiasm. Firms hitherto not known for their love of labour or empowerment become overnight the standard bearers of social equity".
This may be of significance in terms of intellectual property licensing, where cartels and anticompetitive practices may be dressed up as standard setting and technology transfer, or where refusal to grant a licence is seen as an abuse of a dominant position. In these cases, the party alleging anticompetitive practices may almost of necessity be quite small -- and the increased threat of penal costs may be a deterrent to bringing a genuine, if borderline, complaint.

No comments: