Defining Excessive Pricing in South African Competition Law: A European Comparative Analysis

Section 8(1)(a) of the Competition Act 89 of 1998 (Competition Act) prohibits a dominant firm from charging an excessive price to the detriment of consumers or customers. It should be noted that the concept of excessive pricing is challenging to determine in South African competition law. One reason is that there has been no consensus on what was meant by “economic value” in the old section 1 of the Competition Act. The Competition Amendment Act 18 of 2018 has since replaced the definition of excessive pricing in section 1 of the Competition Act with the concept of a “competitive price” in section 8(3). A competitive price is described as one that will prevail if there is effective or robust competition in the market. Scholars and the courts use different comparisons to determine a competitive price, including price and cost-based comparisons. These are also prevalent in the European Union (EU), where authorities use them to assist in the determination of excessive pricing. This article seeks to examine the inquiry or interpretation that the courts follow or adopt to arrive at a finding of abuse of dominance through excessive pricing, drawing on South Africa and EU case precedent. This article regards the latter question as important; it seeks to determine whether courts are able to provide effective regulation of excessive pricing to protect consumers or customers from harm caused by excessive prices. The article further examines the approaches used to assess excessive pricing under the new provisions in South Africa following the amendments to the Competition Act. The article also demonstrates the complexity of the provision in recent excessive-pricing cases and the implications of the amendments to the Competition Act.