In a rapidly evolving SA business landscape, competition law is undergoing a seismic shift, with public interest and transformation taking centre stage in how regulators address abuse of dominance.
A landmark ruling by the Constitutional Court in the Mediclinic Southern Africa case has redefined the scope of the Competition Act, emphasising its role in advancing socioeconomic transformation and public interest beyond traditional merger control.
This shift, coupled with recent Competition Tribunal decisions in eMedia v MultiChoice and Apollo Studios v Audatex, signals a bold new direction for businesses navigating market dominance and intellectual property (IP) protections.
As SA’s competition authorities lean heavily into transformative goals, companies must brace for a future where public interest could trump commercial justifications, raising important questions about innovation, investment and legal predictability.
A new era
The Mediclinic judgment marked a pivotal moment. The case, which reviewed Mediclinic’s proposed acquisition of two private hospitals, underscored that the Competition Act must align with the Bill of Rights and prioritise socioeconomic transformation.
While public interest has long been a statutory consideration in mergers, the Constitutional Court’s ruling extended its influence across all competition law matters, including abuse of dominance cases.
This judicial mandate has reshaped how the Competition Tribunal evaluates disputes, as seen in two contrasting 2024 cases: eMedia v MultiChoice and Apollo Studios v Audatex. Both cases involved allegations of dominant firms withholding IP or related services, but their outcomes highlight the growing weight of public interest and transformation in legal reasoning.
A tale of two outcomes
In eMedia v MultiChoice the dispute centred on restrictive clauses in sports sub-licensing agreements that prevented the SABC from airing content on eMedia’s Openview platform. eMedia argued that MultiChoice’s restrictions abused its dominant market position, limiting competition and public access to sports events of national significance.
The tribunal granted interim relief, ordering MultiChoice to remove the restrictions. Its reasoning leant heavily on public interest, emphasising the need for broad access to culturally significant sports content and the importance of supporting eMedia, a black-owned, medium-sized competitor, in its growth.
Contrast that with Apollo Studios v Audatex, where Apollo and its subsidiary, Motomatix, challenged Audatex’s decision to terminate access to its online claims processing software. Apollo claimed this was an unlawful refusal to supply a scarce service, stifling competition.
However, the tribunal dismissed the interim relief application, citing a lack of clear evidence that Audatex’s actions harmed competition or end-customers. Unlike eMedia, public interest and transformation played a minimal role in the tribunal’s reasoning, with Audatex’s justification for protecting its proprietary software taking precedence.
Intellectual property under scrutiny
Both cases saw respondents defend their actions by citing the need to protect substantial investments and proprietary assets. MultiChoice argued that its exclusive sports broadcasting rights, secured through significant financial outlays, justified restrictions to prevent eMedia from “free riding”. Audatex similarly defended its termination of Apollo’s access, noting that Apollo’s subsidiary was a direct competitor that could exploit its proprietary software.
The tribunal’s divergent approaches are telling. In eMedia, MultiChoice’s investment arguments were sidelined in favour of public interest considerations, particularly the harm to SABC viewers and eMedia’s growth as a black-owned firm. In Apollo, the tribunal accepted Audatex’s IP protection rationale, finding no compelling evidence of competitive harm or public detriment. The key differentiator? The tribunal’s explicit focus on transformation and public interest in eMedia, which tipped the scales against MultiChoice’s commercial justifications.
A shifting legal standard
SA competition law, influenced by European precedents such as Bronner and Microsoft, traditionally sets a high bar for proving abuse of dominance through refusal to deal. A complainant must show that the withheld product or service is indispensable, that the refusal eliminates effective competition, and that there is no objective justification for the refusal.
However, the eMedia decision suggests a lower threshold when public interest and transformation are at play. The tribunal’s willingness to over-ride MultiChoice’s IP-based arguments in favour of broader access and support for a black-owned competitor indicates a departure from traditional effects-based analysis.
This shift introduces uncertainty. The tribunal’s approach in eMedia did not clearly delineate how public interest considerations integrate with conventional competition analysis, leaving businesses without a predictable framework. When can a firm rely on IP protections or exclusivity clauses? When will public interest override commercial rationales?
Without clear guidance, dominant firms face heightened risks of regulatory intervention, particularly when their actions affect public access to valued services or hinder small, black-owned competitors.
Implications for businesses
The evolving landscape has profound implications for companies, particularly those with significant market power:
- The eMedia ruling suggests that compulsory dealing with competitors may no longer be an exceptional remedy. Firms may find their IP and investment protections subordinated to public interest goals, challenging the economic principle that exclusivity incentivises innovation and investment.
- The burden of proof for competitive harm is increasingly influenced by transformative objectives. Where a dominant firm’s conduct restricts public access to culturally or socially significant services — or impedes black-owned or small businesses — regulators are more likely to intervene, even if traditional competition harm is not clearly evidenced.
- Businesses must proactively align their strategies with the Competition Act’s transformative goals. Conduct that supports black-owned firms or enhances public access may curry favour with regulators, while actions perceived to hinder these objectives could attract scrutiny.
Navigating uncertainty
The integration of transformation and public interest into competition law is a constitutional imperative, but it must be balanced with clear, principled tests to ensure legal predictability. Until the tribunal or Competition Appeal Court provides further clarity, businesses face a murky landscape.
Firms with dominant market positions, particularly those dealing in assets of public value such as sports broadcasting rights must tread carefully. Protecting IP and investments remains critical, but regulators may prioritise broader societal goals over commercial justifications.
As SA’s competition law evolves businesses must adapt to a reality where transformation is not just a moral or social goal but a legal one. The eMedia and Apollo cases underscore that public interest is no longer a peripheral consideration but a core driver of regulatory decisions.
For companies the challenge is clear: align with the transformative vision of the Competition Act or risk falling foul of an increasingly assertive regulatory regime.
• Cleland is a director, and Diniso an associate, at Werksmans Attorneys.
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