When does the Constitutional Court have jurisdiction to hear competition law appeals?

March 1st, 2020
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The recent decision in Competition Commission of South Africa v Media 24 (Pty) Ltd 2019 (5) SA 598 (CC) exposed the Constitutional Court’s (CC’s) disparate views on the right of appeal to the CC on competition issues, and the constitutional (as opposed to legislative) imperatives of the Competition Act 89 of 1998 (the Act).

Competition law appeals to the CC

Both before and after the Seventeenth Amendment of the Constitution, differing views have been expressed regarding the appropriate forum to hear appeals in competition matters. As the Media 24 case shows, the CC itself remains at odds on this issue. There are, however, certain recognised principles establishing when the CC has jurisdiction to hear a competition law appeal. Recent legislative amendments further impact on the application of such principles.

The Competition Appeal Court (CAC) and the Competition Tribunal are generally considered to be better qualified to determine the economic issues in competition matters than other courts. The CAC has exclusive and final appeal jurisdiction in certain matters. The CC has jurisdiction to hear any issue in terms of s 62(4) of the Act and any arguable point of general public importance. Until the recently proclaimed amendments to ss 62(4) and 63 of the Act (after the Media24 case), the Act expressly provided for appeals to the Supreme Court of Appeal (SCA) and the CC.

In the Media24 case, the respondent argued that the SCA had appeal jurisdiction. The CC was divided on this issue. The recent implementation of certain provisions of the Competition Amendment Act 18 of 2018, has resulted in the removal of all references to the SCA’s appellate jurisdiction in the Act. The Rules for the conduct of proceedings in the Competition Appeal Court (the CAC Rules) have not yet been amended and still contemplate appeals to the SCA. The ongoing debate regarding the SCA’s appellate jurisdiction in competition matters remains unresolved.

Access to the CC is regulated by s 167(6) of the Constitution and the Rules of the CC, which do not require a litigant applying for leave to appeal against a decision of any court to first apply to that court for leave.  In the Media24 case, the majority found the failure to apply to the CAC for leave to appeal, even when required by the Act, is not a bar to an appeal to the CC. The interests of justice permitted the appeal, without the SCA having heard it first.

The express requirement that the CAC should grant leave to appeal has been removed and s 63(2) of the Act now provides that an appeal in terms of s 62(4) may be brought to the CC, with its leave.  The amended Act is not a model of clarity. The express requirement that the CC must grant leave to appeal, appears to obviate the need for the CAC to grant leave to appeal. However, s 62(4) renders such right of appeal subject to the provisions of s 63 and the Rules of the CAC and CC.

Sections 63(5) and 63(6) have not been amended and respectively require that applications for leave to appeal to the CAC and the CC must be made in the manner and form required by their corresponding rules. Amended s 63(4) further provides: ‘If the Competition Appeal Court, when refusing leave to appeal, made an order of costs against the applicant, the Constitutional Court may vary that order on granting leave to appeal.’ This clearly contemplates an application for leave to appeal to the CAC, rather than the CC.

Competition Appeal Court r 29 requires that an application for leave to appeal to the CC must be considered by the judges who presided over the hearing. Constitutional Court r 19 requires a litigant who wishes to appeal directly on a constitutional issue to bring an application for leave to appeal to the CC.

Until such time as these rules and provisions are amended, the CC may require litigants to first apply for leave to appeal to the CAC and thereafter, if refused, to the CC. The CC in Competition Commission v Yara South Africa (Pty) Ltd and Others 2012 (9) BCLR 923 (CC), considered that the views of the specialist CAC, may be necessary in assessing the constitutional strength of the issue raised. In contrast, it may be contended that the amended s 62(4) of the Act allows direct appeals to the CC in respect of all issues contemplated in s 62(2), but that leave to appeal must be obtained from the CAC before any matter in respect of which it would otherwise be the final arbiter is considered on appeal by the CC. This issue will have to be determined by the courts as soon as possible, in order to clearly assert the correct process to be followed by litigants when applying for leave to appeal.

The Media24 case indicates that, when in the interests of justice, the CC will likely consider an application for leave to appeal, in the absence of an application for leave to the CAC, even if required.

The CC’s disposition to consider competition matters

The disparate findings of the CC in the Media24 case are reflected in four judgments. The first held that a constitutional issue and arguable point of law of general public importance was raised. The second found it is not in the interests of justice to grant leave to appeal. The third and fourth found the application raised an arguable point of law of general public importance. A majority of six judges granted leave to appeal, and four members of the court dissented.

These diverse judgments indicate that whether or not a matter satisfies the CC’s jurisdictional requirements is likely to be an ongoing debate. That said, competition matters will clearly only be considered by the CC when a particular constitutional or jurisdictional issue or point of law of general public importance is raised.

The second judgment levelled strong criticism against the first judgment’s determination that a constitutional issue was raised. Constitutional jurisdiction does not exist where a provision of the Act does not purport to delineate the boundaries of the powers and functions of the Act’s public bodies.  The interpretation and application of the entire Act cannot be a constitutional matter. The Act, unlike the Promotion of Administrative Justice Act 3 of 2000 and the Labour Relations Act 66 of 1995, does not give legislative expression to fundamental rights in the Constitution. If the interpretation and application of the provisions of the Act infringe the equality clause, the CC has jurisdiction by virtue of that infringement alone.

The second judgment also criticised the first judgment allowing an evidential matter to become a constitutional issue. While the Commission’s competence to investigate any particular subject matter raises legality issues, the issue of what evidence it may legally present before the adjudicative bodies does not.

The majority in the Media24 case found the application for leave to appeal raised an arguable point of law of general public importance within the CC’s jurisdiction. The impact the determination will have on the interpretation and implementation of s 8(c) of the Act going forward was also deemed important. While the second judgment considered the issue in dispute a factual matter, the majority considered it a legal inquiry, requiring the critical examination of the policy and normative implications of the standards for predatory pricing.

The CC employs a conservative approach when determining whether a constitutional issue has been raised in competition matters. It seems satisfied that the Tribunal and the CAC should finally determine competition matters, even when directed at achieving constitutional and policy aspirations. Only where the dispute addresses a constitutional legality issue or an infringement of a constitutional provision, is the CC likely to find constitutional jurisdiction.

The CC seems more inclined to find jurisdiction where an arguable point of law of general public importance is raised.  Although still the subject of debate, and dependant on the relevant facts, an issue requiring inquiry into normative, social or economic considerations may be considered a legal, as opposed to factual, issue.

Given the many social and economic factors associated with competition disputes, it is inevitable that the CC will find it has jurisdiction to consider an increasing number of competition matters in future.

The relationship between competition law and the Constitution

The Act recognises that the past economic and social marginalisation of Black South Africans led to significant structural distortions in the economy. The Act records as its purpose –

  • the promotion and maintenance of competition in order to advance the social and economic welfare of South Africans;
  • to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the economy; and
  • promote a greater spread of ownership, particularly of historically disadvantaged persons.

The Tribunal and CAC are enjoined to apply the provisions of the Constitution when interpreting and applying the Competition Act. The Act must be interpreted through the prism of the Bill of Rights. The debate, however, persists on whether competition law should focus on achieving the socio-economic aspirations of the Constitution or simply ensuring that the Act’s economic objectives are achieved.

With so many strong indicators of the transformative nature of the Act, it is tempting to contemplate all the means by which the Act may achieve the protection and achievement of constitutional rights.  The Media24 case, however, puts a halt to such fantastic musings and asserts that the Act is ‘just legislation’ without ‘elite constitutional allure’.

This by no means dilutes the impact of the Act as aspirational legislation. As competition specific legislation it aims to regulate and improve economic conditions in South Africa (SA). The right to pursue a remedy in competition law is itself a human right and any enforcement in terms of the Act must follow due process. This includes the right to a fair and public hearing by an impartial tribunal, the right to just administrative action, reasons for decisions and rationality of determinations. In executing its obligations, the Commission is bound to respect claims of confidentiality. The right to privacy is central thereto.

Issues relating to data access and Internet connectivity will likely form the subject of future competition disputes. It may be necessary to consider the socio-economic implications of connectivity in order to access constitutional rights.

While the Act is not specifically designed to enforce constitutional rights, it is inevitable that determinations of the competition authorities will impact on or require consideration of certain constitutionally entrenched rights, even when the provisions of the Act are applied purely in order to regulate and improve economic conditions in SA. To date the Commission and the Tribunal have dealt with numerous matters involving constitutional rights and issues, including the right to education and the provision of healthcare.

Over the past 20 years an increasing number of constitutional debates have emanated from competition law disputes. It is anticipated that this trend is likely to continue as the issues that competition law grapples with continue to impact on the fundamental rights contained in the Bill of Rights. This portends for interesting and challenging litigation in the future.

Candice Slump BJuris LLB LLM (Labour) (NMU) is the Litigation Manager at the Competition Commission of South Africa. This article is written in her personal capacity.

This article was first published in De Rebus in 2020 (March) DR 18.