Title: COVID-19 price gouging cases in South Africa: Short-term market dynamics with long-term implications for excessive pricing cases

Abstract

The enforcement of competition law internationally was significantly bolstered during thepandemic.ThiswasparticularlythecaseinSouthAfricawheretemporaryregulationswere implemented to provide the competition authorities the powers to regulate and address the threat posed through ‘price-gouging’ of products considered critical to South African consumers during the pandemic. To aid in providing access to healthcare and the public interest, competition agencies have found themselves dealing with a host of issues which are broader than those which competition agencies traditionally grappled with. Our paper explores two recent decisions by the South African Competition Tribunal, and in particular, the Tribunal’s approach to assessing ‘dominance’, in the context of temporaryand‘abnormal’marketconditions,broughtaboutbythepandemic,andwhatthese decisions mean for the assessment of ‘dominance’ and excessive pricing cases post the pandemic. The paper includes a view from the Competition Appeal Court (“CAC”) in the subsequentappealoftheBabelegicase,discussedinthepaper,whereintheCACheldmost notably that, in the context of the pandemic, short cuts in decision making by the Tribunal should not be countenanced. Even so, the CAC upheld the Tribunal’s first instance decision. Our paper, therefore,assesseshowtheTribunal’sassessmentof‘dominance’andexcessive pricing,asconfirmedbytheCAC,mayhavepermanentlyintroducedtheconceptof‘temporary market power’ in South African competition jurisprudence; concerns that many companies, not otherwise perceived to be ‘dominant’, may fall foul of the watered down economic test for excessive pricing during the pandemic; and the unintended consequences which may ultimately limit production or retard innovation.