South Africa: Vodacom on the Spot Over Abuse of Dominance

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Abuse of dominance is a topic that has come up quite often where telecommunications companies are concerned. Kenya has had it’s own fair share. Now over in the South, Vodacom is facing investigation from the competition commission in South Africa for abuse of dominance according to Techcentral.

This came up when the telco scored an exclusive contract to provide mobile communications services to the government. And this naturally excluded other providers.

In 2016 subscriber numbers, Vodacom commands 42 percent of the market-share with 37.1 million subscribers followed by MTN with 34.9 percent and 30.8 million subscribers respectively. Cell C is at 17.3 percent with 4.5 percent 15.3 million respectively. The total number of mobile subscribers in South Africa is 88.1 million.

The commission stated “it had reasonable grounds to suspect that the exclusive contract may constitute an exclusionary abuse of dominance by Vodacom in contravention of the competition act”. “..the Competition Act prohibits a dominant firm from abusing that dominance by requiring or inducing a supplier or customer to not deal with a competitor. Also, engaging in an exclusionary act that impedes or prevents a firm’s entry or expansion within a market, unless the firm concerned can show technological, efficiency or other pro-competitive gains which outweigh the anti-competitive effect of its act, is prohibited.”

In it’s defense, Vodacom claims to be surprised that there is an investigation on dominance, adding that they are committed to cooperating with the commission. The telco added that they followed due process in a fiercely contested and transparent bidding process, without exclusive provider award basis.