South African Competition Appeal Court Upholds Tribunal’s Excessive Pricing/ Anti-Price Gouging Decision re: Babelegi

In June 2020, the South African Competition Tribunal (Tribunal) handed down two seminal decisions (Babelegi and Dis-Chem) in relation to “excessive pricing” during the Covid-19 pandemic. The Tribunal found that both respondents had engaged in excessive pricing in relation to the sale of facemasks.

Together with John Oxenham and Charl van der Merwe, we authored an article for the Oxford Journal for European Competition Law and Practice titled COVID-19 Price Gouging Cases in South Africa: Short-term Market Dynamics with Long-term Implications for Excessive Pricing Cases. In the Article, we examined several aspects of these cases and concluded that it was highly unfortunate that these cases were the “test” cases not only as the first (and to date only) contested price gouging cases in South Africa, but more importantly they also the first excessive pricing cases to be assessed under South Africa’s amended excessive pricing provisions (which came into effect in February 2020).

Our primary concerns were that while the Tribunal stressed that the Covid-19 pandemic presented a unique challenge, the urgent manner in which the case was tried, and the clear objective to deter suppliers form exploiting consumers from excessive pricing during the pandemic, led in our view to a decision which appeared to be justified largely upon notional (but overly simplified) theories of market power as opposed to robust and objective empirical evidence and economic principles ordinarily associated with excessive pricing cases…

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