Working Out the Standards for Excessive Pricing in South Africa

Excessive pricing is one of the contentious areas of competition law and the standards are developing. South Africa has had at least two important excessive pricing cases. We review the approaches of the Competition Tribunal and the Competition Appeal Court in the Mittal Steel and Sasol decisions in order to demonstrate the complexity of the challenge of giving practical effect to the excessive pricing provisions of the Competition Act. Both the Mittal Steel and the Sasol decisions were concerned with excessive pricing by former state-owned firms. For example, Mittal Steel sold steel in the domestic market at more than import parity to its many South African customers that needed steel as an input while selling the steel for export at the much lower world price. We argue that the ultimate solution may be found in the purposive reading of the law which at the same time does not ignore the required elements to be proved.