The Competition Commission has lost a battle in a case against Telkom in a matter heard by the Competition Tribunal last year.
The tribunal ruled on Wednesday that the commission could not add charges against Telkom in two cases of alleged market abuse being investigated by the tribunal.
Telkom faces potential charges of up to R7bn in the two cases, one relating to a complaint by Internet service providers and another lodged by former value-added network service providers (Vans) as far back as 2004.
The tribunal has yet to hear the main arguments in either case.
Both cases were referred by the commission to the tribunal, with a recommendation that Telkom be fined 10% of its annual turnover in the year of the infraction.
The recommended fines amount to a combined amount of about R7bn.
In both cases, Telkom stands accused of abusing its dominance or charging excessive prices to keep smaller businesses from competing effectively.
The commission wanted to “add or clarify” its allegations against Telkom, saying the telecommunications giant has also been “squeezing its rivals’ margins” making them less competitive in the market.
According to a statement released by the tribunal, the new charges only apply in the Vans case.
The tribunal’s ruling will be Telkom’s first victory in the protracted battle, since every other attempt it has made to have charges thrown out has been thwarted.
A reasons document released by the tribunal on the matter states that the commission’s attempt to add charges to an already long-standing case comes “very late in the history of a much delayed case”.
The tribunal’s document explains that the commission also did not supply enough supporting evidence for it for it to be able to consider the additional charges.
However, the tribunal’s discussion document points out that the commission can still add charges to the two cases already being heard, if it can come up with enough supporting documentation to convince the tribunal of its validity.
“We have given directions to the commission on how to rectify this deficiency should it choose to do so.”
Telkom first tried to have the case lodged by the Vans halted when it questioned the jurisdiction of the commission in court.
The Vans, some of which have since received licences allowing them to be fully fledged telecoms operators, accused Telkom of abusing its market dominance by refusing to supply them with telecoms facilities.
The case was initially referred to the tribunal in 2004.
Telkom tried to stop that in the courts, but eventually lost at the supreme court of appeal in Bloemfontein.
The case was again referred to the tribunal late last year and was followed a few months later by a complaint lodged by Internet service providers.
In October last year, Telkom called on the tribunal to throw the two cases out.
It argued that the commission’s attempt to add charges to the two cases was “unconstitutional, vague and contradictory”. The telecoms group also argued that the complaint did not meet all the requirements of the Competition Act. — Candice Jones, TechCentral
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