Sasol Chemical Industries v. The Competition Commission (South Africa)
Share
In June 2015, the Competition Appeal Court of South Africa (the CAC) absolved Sasol Chemical Industries of the excessive pricing complaint against it. In doing so, the CAC overturned the decision of the Competition Tribunal. Compass Lexecon initially advised Sasol in the context of the South African Competition Commission’s excessive pricing investigation into Sasol’s pricing practices in propylene and polypropylene, preparing four expert reports
responding to the Competition Commission’s arguments, and setting out our own assessment, including a theoretical framework to directly estimate the products’ economic value against which actual prices were compared. We also estimated economic value indirectly using price and cost benchmarks and assessed whether any differences between actual prices and economic value were unreasonable. Compass Lexecon Senior Managing Director, Dr. Jorge Padilla, testified in front of the Competition Tribunal of South Africa. The Tribunal ruled against Sasol, however that decision was overturned by the June 2015 CAC decision. The CAC held that returns above economic value are not per se unreasonable, stating that “[a] price which is significantly less than 20% of the figure employed to determine economic value falls short of justifying judicial interference in this complex area.” The Compass Lexecon team included Segye Shin, Ilaria Masiero, Neil Dryden, Kirsten Edwards-Warren and Jorge Padilla. They worked with Tim Frazer from Arnold & Porter (UK) LLP and with Anthony Norton and Michelle Rawlinson from Nortons, Inc. in South Africa.