GABCON’s Application Against the CCA Dismissed by the Competition and Consumer Tribunal

The Competition and Consumer Tribunal has dismissed with costs an application to file supplementary affidavits by Gaborone Container Terminal (GABCON) in an abuse of dominance case lodged by the Competition and Consumer Authority. GABCON had made an application challenging the jurisdiction of the Tribunal on the basis that it was a statutory monopoly and therefore fell outside the ambit of the Competition Act.

Pronouncing  its decision today, the Tribunal held that  GABCON is not a statutory monopoly as it is not created by statute, and is therefore not protected by section 3 (3) (b) of the Competition Act, which exempts enterprises operating on the basis of a statutory monopoly in Botswana. GABCON was ordered to pay the costs of the Authority in the application. 

Reading the decision, Presiding Tribunal Member and Vice President, Tendekani E. Malebeswa said “a statutory monopoly is created by statutory provisions excluding other enterprises from conducting or performing the reserved activities. GABCON is neither created by statute nor are any of its activities reserved solely to it by statute. It is a private company constitute under the Companies Act (Cap: 42.01).”

The  Tribunal further held that, even if GABCON, just like Botswana Railways, had been created by statute, it would have to be subjected to a rigorous test to determine whether the condemned conduct falls within its core statutorily mandate services and not in ancillary services. 

“The Authority has to demonstrate whether GABCON is dominant in both the upstream and downstream markets, or in either of them, and if it is, whether it is abusing its dominant position. This can only be done at the full hearing of the referral. Therefore, the Tribunal has jurisdiction to hear the referral,” Mr. Malebeswa said.

Regarding the effects of GABCON’s conduct on competition, the Tribunal noted that “its conduct shows that it has high market power in the business of hauling containers; and the barriers to entry do not only affect the private hauliers but customers too, because they do not have a choice in who provides them with haulage services, as GABCON forces and controls the direction of the haulage business. The conduct by GABCON signals abuse of dominance through refusal to deal.” 

The background to the matter is that on 6^th June, 2017, the Competition Authority received a complaint from a group of private hauliers who alleged that GABCON had imposed restrictions preventing them from efficiently servicing their customers. The private hauliers complained that GABCON’s behaviour negatively affected their businesses in that it had forcefully taken some of their customers, forced them to share deliveries with it, and coerced their customers to engage it for deliveries. They alleged that if this behaviour by GABCON continued without intervention, they would be forced to exit the market and close shop. 

The Authority instigated an investigation against GABCON and subsequently referred the case to the Competition Commission on 26^th November 2018. In response to the referral, GABCON raised points in limineon 10^th and 21^st December 2018 respectively, alleging amongst other things that the Authority’s referral was irregular, the proceedings were a nullity (based on numerous reasons put forward).

The Authority opposed the points in limine raised by GABCON, and the Parties appeared before the Competition Commission on 19^th March 2019, for argument. On 28^th May 2019, the Competition Commission handed down its decision and dismissed all the points in limine that were raised by GABCON. 

When the matter was now ripe to proceed to the merits of the cases, GABCON yet again, now before the Competition and Consumer Tribunal, made an application to be allowed to file further supplementary affidavits and to raise a point that they are operating on the basis of a statutory monopoly and cannot be subjected to Competition Regulation as per section 3 (3) (b) of the Competition Act.