tele it to the judge
29 April 2008
Let’s go to a view from an expert on the subject. Anthony Norton is Webber Wentzel’s head of competition law and he is on the line from Johannesburg. Anthony, good evening, appreciate your time on a Friday evening. What do you make of all of this? I thought the Competition Commission had 100 percent coverage of the entire economy?
Chris Gibbons:
There is an interesting court case going on at the moment involving Telkom and the Competition Commission tribunal. Essentially, Telkom is arguing that South Africa’s Competition Authority does not have any jurisdiction to make a ruling against them on the matter of alleged anti-competitive practises. Why is this? I thought everybody was subject to the Competition Commission tribunal.
Anthony Norton:
Hi Chris. It is actually quite a convoluted legal issue this, which I think only the lawyers revel in. But effectively, what the debate revolves around is whether conduct which is effectively authorised in terms of the Electronic Communications Act is also subject to the provisions of the Competition Act.
And I think the matter is made more complex by the fact that the Electronic Communications Act also has specific provisions dealing with competition issues. Therefore it has given Telkom room to argue that the conduct should only be governed by Icasa, which is the regulatory body responsible for the telecoms industry. And that the jurisdiction of the Competition Authority in relation to specific Acts under the Electronic Communications Act should not fall within purview of the Competition Authority.
So to be honest with you, it is a bit of a regulatory minefield. And I think it makes for good legal debate. But it is quite difficult for the man on the street to, I think, relate to it.
Chris Gibbons:
Is it blocking, do you think, the competitive forces that are growing in the telecommunications arena?
Anthony Norton:
Well I think, certainly, what it does do, I think the Competition Authority has generally been more active and interventionist in its approach in these types of issues. And I think historically, Icasa has tended to take a back seat in investigations into alleged anti-competitive behaviour.
And I think, probably, the frustrations for a lot of the other telecoms players out there in the market, is that Icasa has not really been very effective in policing or regulating the sector, while the Competition Authority has demonstrated a much greater sense of urgency and intervention in trying to police so called anti-competitive action.
And therefore I think this is going to be quite an important case, because if Telkom is successful, then the Competition Authority reach, in relation to the telecom sector, could be significantly shortened. Which would mean that the only regulatory authority one could go to if there is an anti-competitive problem in relation to certain specific acts is Icasa, which historically has not been successful in managing players like Telkom.
Chris Gibbons:
Anthony, how much of this has to do with competition and how much of it has to do with the fact that Telkom is trying to wriggle out of a R3.7-billion fine?
Anthony Norton:
Well I certainly think Telkom has every intention to make sure that the Competition Authorities cannot pursue this particular matter against them. And as you suggested, there is a very large monitory intent involved here. And I think it is common knowledge now that the Competition Authorities are levying very significant penalties. We have seen recent evidence in a number of cartel cases.
And therefore any player who sees the Competition Authority coming after them has got every intention to find the regulatory basis for trying to get them out of the fray. So I think Telkom has got every intention of avoiding a large fine of this kind. And if you can do so through the auspices of this particular jurisdiction argument, then I think it will do so.
Chris Gibbons:
That is Anthony Norton, Webber Wentzel’s head of competition law talking to us from Johannesburg. Anthony, appreciate your time here on The World at Six.