THE COMPETITION APPEAL COURT OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 259/CAC/Oct24
In the matter between:
CAPITAL NEWSPAPERS PROPRIETARY LIMITED FIRST APPLICANT
CAXTON & CTP PUBLISHERS & PRINTERS LIMITED SECOND APPLICANT
and
MEDIA24 HOLDINGS LIMITED FIRST RESPONDENT
NOVUS HOLDINGS LIMITED SECOND RESPONDENT
NOVUS PRINT PROPRIETARY LIMITED THIRD RESPONDENT
FREE 4 ALL PROPRIETARY LIMITED FOURTH RESPONDENT
INTREPID PRINTERS PROPRIETARY LIMITED FIFTH RESPONDENT
VICTORY TICKET 376 PROPRIETARY LIMITED SIXTH RESPONDENT
MEDIA24 PROPRIETARY LIMITED SEVENTH RESPONDENT
THE COMPETITION COMMISSION EIGHTH RESPONDENT
THE MINISTER OF TRADE, INDUSTRY AND COMPETITION NINTH RESPONDENT
Coram: MANOIM JP and NKOSI JA and PHATSHOANE AJA
2
Heard: 11 June 2025
Delivered: 16 September 2025
Summary: Competition law – The ambit of Competition Commission’s merger
jurisdiction – whether the migration of certain titles to digital form was part of the merger
- finding in Part A and B of the application that migration decision was a unilateral
commercial decision without loss or acquisition of control and not part of the merger as
defined in s 12 of the Act – No case made out to review and set aside the Competition
Commission’s merger approval – the application dismissed.
______________________________________________________________________
ORDER
______________________________________________________________________
Review of the Competition Commission’s decision:
1. Part B of the application is dismissed with costs, including costs of three counsel, where
so employed.
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______________________________________________________________________
JUDGMENT
______________________________________________________________________
Phatshoane AJA (Manoim JP and Nkosi JA concurring):
Introduction
[1] The first and second applicants, Capital Newspapers (P ty) Ltd (Capital) and
Caxton & CTP Publishers & Printers Limited (the applicants), approached this Court for
relief in two parts. In Part A they sought an order : interdicting the first to the seventh
respondents, Media24 Holdings Limited, Novus Holdings Limited, Novus Print Proprietary
Limited (Novus), Free 4 All Proprietary Limited (Free 4 All), Intrepid Printers Proprietary
Limited (Intrepid), Victory Ticket 376 Proprietary Limited (Victory Ticket) , Media24
Proprietary Limited (Media24); (the merging parties), from taking any steps to implement
the approved merger between Novus, Free 4 All, Intrepid, Victory Ticket and Media24
Supply Chain Management Division operated by Media24 Proprietary Limited referred to
as ‘On the Dot’, the local news portfolio of Media 24, and the Football Publication Division
of Media24 styled ‘Soccer Laduma and Kick off (the merger). In addition, the applicants
sought an order that the decision of the eighth respondent, the Competition Commission
(the Commission) , to approve the merger , be sta yed and or suspended pending the
determination of the relief in Part B. Part A of the application was dismissed with costs.
[2] It now remains for us to consider Part B in which the applicants’ principal relief
sought is a declaratory order that the Commission’s decision to approve the merger is
inconsistent with the Constitution, unlawful and invalid . Second ly, they seek an order
reviewing and set ting aside that decision. Third ly, its remittal to the Commission for
reconsideration or alternatively, an order granting the approval of the merger subject to
conditions imposed by the Commission on 30 October 2024 and certain further conditions
conditions imposed by the Commission on 30 October 2024 and certain further conditions
specified in the amended notice of motion with regard to the distribution prices On the Dot
charged the publishers and the restoration of the geographic footprints of the distribution
services to what they were prior to 30 October 2024 . Key to the determination of the
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declarator and the review is the question of the ambit of the Commission’s merger
jurisdiction, an aspect which this Court already disposed of in Part A , but is being
persisted with for reconsideration by this Court in the present review.
Background
[3] Capital is a majority black -owned newspaper publishing business with six
publications in Pietermaritzburg and the Midlands area of KwaZulu -Natal. Caxton is a
South African-based listed company involved in the publishing and printing of newspapers
and magazines, as well as the manufacturing and distribution of packaging, stationery
and labels . Caxton operates through its wholly -owned subsidiary , CTP Limited , which
publishes ‘The Citizen’. Caxton holds 45% shares in Capital.
[4] Media24 is a company registered in South Africa. Its immediate holding company,
Media24 Holdings , is controlled by Naspers Limited, a multinational media group. It
publishes a range of well-established newspaper titles, which include Beeld, Rapport, Die
Burger, City Press and Daily Sun. It is a leading South African online news publisher with
two online platforms, namely, News24 and Netwerk24. On the Dot is a subsidiary of
Media24 and a distributor of magazines and paid -for newspapers. It distributes 90% of
paid-for newspapers and magazines in South Africa to more than 10 000 retail outlets. It
also distributes leaflets, books and the like ; c ollects unsold paid -for newspapers and
magazines; and performs merchandising services.
[5] Novus is one of South Africa’s largest print production and manufacturing
operations with a history spanning over 100 years. The fourth to the sixth respondents,
Free 4 All, Intrepid, and Victory Ticket, are wholly owned subsidiaries of Novus. They ,
together with Novus , are the primary acquiring firms in the merger . The media supply -
chain management division operated by Media24 , styled ‘On the Dot ’; the local news
portfolio of Media24 ; and the football publication division of Media 24 titled ‘Soccer
portfolio of Media24 ; and the football publication division of Media 24 titled ‘Soccer
Laduma and Kick Off’, are the primary target firms.
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[6] On 5 August 2024, Media24 entered into three agreements, first, with Free 4 All
for the sale of On the Dot; second, with Intrepid for the sale of its portfolio of 20 community
newspapers circulated within the Eastern Cape, Free State, Northern Cape and Western
Cape (community newspapers); and third, with Victory Ticket for the sale of the national
soccer publications styled ‘Soccer Laduma’ and ‘Kick Off’, which are national publications
covering local and international soccer news (the sale assets).
[7] In terms of s 12(1)(a) of the Competition Act 89 of 1998 (the Act), a merger occurs
when one or more firms directly or indirectly acquire /s or establish/es direct or indirect
control over the whole or part of the business of another firm. There are three categories
of mergers: small, intermediate and large mergers. The classification is with reference to
combined annual turnover or assets , or a combination of these. 1 On 6 August 2024 , in
terms of s 13 A of the Act , the Commission received a notification of an intermediate
merger from the merging parties because the sale of the specified assets resulted in a
change in control and the transaction value surpassed the merger thresholds as
contemplated in s 11 of the Act . On 30 October 2024 , the Commission approved the
merger subject to certain conditions, to which I shall return.
The migration decision
[8] As already alluded to, the question of the ambit of the Commission’s merger
jurisdiction remains contested in the present application, and it is, in truth, the actual area
of contention. Therefore, it behoves this Court to first dispose of the question whether
Media24’s migration decision f ell within the Commission’s merger jurisdiction. The
merging parties’ contention is that the migration decision was not part of the merger, and
neither was it caused by it. According to them , the sequential set of events was that
Media24 took a decision to migrate certain titles (Beeld, Rapport, City Press, Daily Sun
Media24 took a decision to migrate certain titles (Beeld, Rapport, City Press, Daily Sun
brands), commonly referred to as terminating newspapers, from print to digital.
Thereafter, in pursuance of its broader migration strategy, it then took the decision to sell
the “sale assets”. The merging parties maintained that the migration is not sufficiently
1 Section 11 of the Competition Act 89 of 1998.
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closely connected to the merger to fall within the Commission’s merger jurisdiction. Put
otherwise, the migration would have come to pass irrespective of the merger.
[9] On the converse, the applicants contended that the migration is part of an overall
strategic plan which should have been notified to and in vestigated by the Commission.
The applicants argued that the merging parties’ own internal documents confirm that the
closure of the terminating newspapers and the sale of On the Dot and related assets were
part of one overarching strategic decision (composite plan). They argued strenuously that
the Commission was required to investigate not only the narrow-notified transaction but
the composite plan. The features of that plan, so it was argued, are closely connected
steps in the composite process to warrant consideration by the Commission as part of its
investigation of the sale transaction notified to it for approval.
[10] The applicants went on to argue, in an attempt to demonstrate that the closure of
the terminating newspapers was part of the composite plan , that ‘it was clear from the
evidence that Media 24 was not willing to, and did not in fact, proceed with the closure of
the terminating newspapers and the retrenchment of employees either at Media24 or On
the Dot until after the approval of the sale of On the Dot and related titles had been
obtained from the Commission’. This submission is less than frank because the merging
parties gave an undertaking, at the insistence of the applicants, not to implement any
retrenchments nor to migrate the title s until after the approval process. This was on the
basis that the merging partie s had not conceded, as they put it, ‘to the applicants’
continuing negative and incorrect characterisation of the proposed transaction’.
[11] A common threa d that runs through the applicants’ papers is set out in a
supplementary affidavit deposed to by Mr Anton Roets, their attorney, in Part A of the
application. He states:
application. He states:
‘In essence, Media24’s strategic decision to exit the print newspaper business to benefit its digital
subscription news platform meant that there was no need to retain a newspaper distribution
business, whose sole purpose was to distribute paid for newspapers. Each step that formed part
of the strategic decision to exit the print newspaper business had a knock-on effect on all aspects
of the newspaper business (including distribution business) and will also give rise to a permanent
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and irreversible effect on the newspaper sector in South Africa, giving rise to an existential threat
to the press in South Africa as well as the freedom of the press and diversity of voice . This is a
threat to democracy itself. Media24 itself expressly acknowledged that the Commission’s approval
of the merger paved way for it to continue with the various interrelated steps, including
retrenchments of staff and closure of the newspaper titles.’
[12] Section 12A(1) of the Act provides:
‘Whenever required to consider a merger, the Competition Commission or Competition Tribunal
must initially determine whether or not the merger is likely to substantially prevent or lessen
competition, by assessing the factors set out in subsection (2), and if it appears that the merger
is likely to substantially prevent or lessen competition, then determine –
(a) whether or not the merger is likely to result in any technological, efficiency or other pro -
competitive gain which will be greater than, and offset, the effects of any prevention or
lessening of competition, that may result or is likely to result from the merger, and would not
likely be obtained if the merger is prevented; and
(b) whether the merger can or cannot be justified on substantial public interest grounds by
assessing the factors set out in subsection (3).
The Criteria for each of these evaluations is set out in s 12A(2) and (3) of the Act.
[13] This Court in Part A of the application dealt with the question whether a merger,
which not only encompassed the sale of On the Dot and 20 community newspapers but
involved a composite plan which encompasse d both the sale of On the Dot and the
community newspapers and the decision to close down a series of printed titles and only
to publish them in digital form, had taken place.
[14] What requires a sharp focus is whether this Court’s finding s and the order in
Part A were interlocutory and not final in effect on the dispute between the parties. It is a
Part A were interlocutory and not final in effect on the dispute between the parties. It is a
matter of notoriety that the distinction between interlocutory and final decisions is
inherently difficult to draw. In Albutt v Centre for the Study of Violence and Reconciliation
and Others,2 the Constitutional Court held:
2 Albutt v Centre for the Study of Violence and Reconciliation and Others [2010] ZACC 4, 2010 (3) SA 293
(CC), 2010 (2) SACR 101 (CC), 2010 (5) BCLR 391 (CC) para 25.
8
‘Our courts have held that, in determining whether an order is final in effect, what matters is not
only the form of the order, “but also, and predominantly, its effect”. An interim interdict has a final
effect if it disposes of any issue or portion of an issue in the main application; put differently, if it
“anticipates or precludes some of the relief which would or might be given at the hearing ”. An
examination of the issues raised in the interim-interdict proceedings and the manner in which they
were dealt with may help to determine whether the court meant to express a final decision on
those issues, that is, whether it intended to dispose finally of those issues or any part thereof.’
[15] A synopsis of this Court’s findings in Part A is necessary in order to determine
whether they were definitive on the question whether the migration decision was part of
the composite plan that ought to have been notified to and investigated by the
Commission. In that part, this Court detailed the essence of the applicants’ case regarding
the Commission’s alleged failure to properly assess both the competition and public
interest implications of the notified transaction as a composite strategy and consequently
its failure to apply the broader merger decision-making process as required in terms of
the Act. It then dealt with the applicants’ constitutional argument, in particular its focus on
the reasoning adopted by the Commission on the impact of the strategic plan on
entrenched constitutional rights, where the Commission said:
‘The merger transaction in this case therefore involved a garden variety competition and public
interest analysis which did not animate any lofty constitutional principles.’
[16] It was argued , for th e applicants both in Part A and B that the Commission’s
approach was contrary to the principles enunciated in Competition Commission of South
Africa v Mediclinic Southern Africa (Pty) Ltd and Another (Mediclinic),3 in particular, the
Africa v Mediclinic Southern Africa (Pty) Ltd and Another (Mediclinic),3 in particular, the
dictum in para 55, where the majority judgment of the Constitutional Court said:
‘In its interpretation of section 12A(1)(a) and (2) of the Act, the majority [of the CAC] overlooked
sections 7(2) and 39(2) of the Constitution, thus failing to adopt the correct interpretive approach
to statutes as set out in this Court's judgments. Its approach fails to advance the purpose of the
Act and to promote the spirit, purport and object of section 27 of the Constitution.’
3 Competition Commission of South Africa v Mediclinic Southern Africa (Pty) Ltd and Another [2021] ZACC
35; 2022 (4) SA 323 (CC); [2023] 1 CPLR 2 (CC).
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[17] As correctly determined by this Court in Part A, the approach adopted by the
Constitutional Court in Mediclinic was linked to the factual matrix of that case. The Court
there held that where the merger would have significant effects on medical costs ,
particularly affecting the indigent sections of the South African community , it was
important that such a merger be analysed through the lens of s 27 of the Constitution.
The importance of Mediclinic, this Court found in Part A , was inextricably linked to the
question whether a merger had taken place in the present case , which not only entailed
the sale assets but involved a composite plan which included the closure of terminating
newspapers and their migration to digital platform. This Court observed that a merger
must always involve one firm acquiring control over a part or the whole of the business of
another firm.
[18] The Court then evaluated whether the closure of the print titles and the sale of On
the Dot constituted a unitary decision-making process. On this score, the Court noted that
the applicants’ argument was predicated on both factual and legal basis. The legal aspect
hinged on two decisions of this Court : Gold Fields Limited v Harmony Gold Mining
Company Limited and Another (Gold Fields)4 and Minister of Economic Development and
Others v Competition Tribunal and Others, South African Commercial, Catering and Allied
Workers Union (SACCAWU) v Wal-Mart Stores Inc and Another (Wal-Mart).5
[19] The Court distinguished Gold Fields from the present case because there, the
Court had to evaluate ‘whether the acquisition of a significant parcel of shares which did
not give it control coupled with an irrevocable undertaking by another shareholder to
cooperate with the acquirer sufficed to bring the entire transaction within the definition of
merger’.6 It then held definitively that in this case there had been no change in control in
relation to the terminating newspapers.
relation to the terminating newspapers.
4 Gold Fields Limited v Harmony Gold Mining Company Limited and Another [2005] 1 CPLR 74 (CAC).
5 Minister of Economic Development and Others v Competition Tribunal and Others, South African
Commercial, Catering and Allied Workers Union (SACCAWU) v Wal -Mart Stores Inc and Another (Wal-
Mart) [2012] ZACAC 2; [2012] 1 CPLR 6 (CAC) (9 March 2012).
6 Capital Newspaper (Pty) Ltd and Another v Media 24 Holding Ltd and Others (Capital Newspaper Part A)
[2024] ZACAC 5 para 60 (Part A).
10
[20] The Court then turned its attention to Wal-Mart, where the question was whether
certain retrenchments, which took place prior to the notified transaction , formed part of
the merger decision-making process. In Wal-Mart, this Court made this observation:7
‘An examination of the reasoning does not automatically support the argument that, because the
retrenchment took place prior to the merger, it cannot be merger specific , . . . A retrenchment
which takes place shortly before the merger is consummated may raise questions as to whether
this decision forms part of the broad merger decision making process and would accordingly be
sufficiently closely related thereto.’
This Court reasoned that Wal-Mart could only be applicable to the present dispute if the
evidence justified a similar conclusion. It held that ‘… citing cases as support for a
submission where the factual matrix is palpably different is unhelpful ’.8 As already
discussed, the Court found that in the present dispute , there had been no change in
control of the terminating newspapers. They remained under the total control of Media24
before and after the notified transaction.
[21] On the applicants’ trepidation, with regard to the increase in costs of distribution of
print media following the sale and the radical reduction of print media due to migration of
the titles from print to digital which would cause closure of print newspapers , the Court
said:
‘In the final analysis it is the dynamic character of the market which created the impetus for the
migration decision and hence the continuing decline of print media requiring distribution. The
decision to migrate, which does not entail a change of control , would not have necessitated a
different form of authorisation from the Commission, nor on the evidence can it be suggested that
there was a composite set of corporate transactions that would have necessitated a different form
of authorisation by the Commission.’9
of authorisation by the Commission.’9
[22] The Court found no sufficiently closely related link between the migration decision
and the sale of On the Dot and the community newspapers to justify any of the variation
of the theme of a composite transaction contended for by the applicants . The migration
7 Ibid para 140.
8 Capital Newspaper Part A fn 6 para 33.
9 Capital Newspaper Part A fn 6 para 76.
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decision, reasoned the Court, was a separate commercial decision taken by Media24,
which did not fall within the definition of merger and thus the competition authorities’
merger jurisdiction was not engaged.
[23] Even though the proceedings before this Court in Part A were of an interim nature,
a reading of the judgment shows that the findings and conclusions were not merely obiter.
What is striking is that the applicants filed an appeal against the decision in Part A with
the Constitutional Court . Implicit in th at approach is their acceptance that the findings
were final in effect and thus appealable. In my view, the findings were decisive and clearly
dispositive of the initial question whether the migration decision formed part of a
composite plan . The upshot of this is that th e ambit of the Commission’s merger
jurisdiction is res judicata.
[24] Even if I am wrong on the definitive nature of the proceedings in Part A , it bears
repeating that determining whether the migration decision is sufficiently closely related to
the merger as to fall within the Commission’s merger jurisdiction remains a matter of
causation. The Constitutional Court considered the issue of causation in Coca-Cola
Beverages Africa (Pty) Ltd v Competition Commission and Another (Coca-Cola),10 where
one of five substantive issues for determination concerned the test for evaluating whether
post-merger employees’ retrenchments were causally linked to the merger or merger -
specific, where merger approval was conditional on there being no retrenchments as a
result of the said merger. There, Coca-Cola had argued that the reasons for the
retrenchments were commercial, regulatory and operational factors , therefore unrelated
to the merger.
[25] The Constitutional Court held that:11
‘The Tribunal in the present case considered that the “delictual test” for causation adopted in the
first judgment in Aveng12 to ascertain the true reason for the retrenchments was inappropriate in
10 Coca-Cola Beverages Africa (Pty) Ltd v Competition Commission and Another (Coca-Cola) [2024] ZACC
3; 2024 (4) SA 391 (CC).
11 Ibid para 27.
12 National Union of Metal workers of South Africa and others v Aveng Trident Steel (a division of Aveng
Africa (Pty) Ltd) and Another (2021) 42 ILJ 67 (CC); 2021 (2) BCLR 168 (CC); [2020] ZACC 23 (CC).
12
the present context. The approach in the second judgment in Aveng was to be preferred. The
latter approach characterises the enquiry as one related simply to proof. Where conflicting
reasons are proffered for the retrenchments, the true reason for them is a factual question to be
resolved on the probabilities, applying Stellenbosch Farmers' Winery 13. This approach, in the
Tribunal's view, was consistent with the Tribunal's judgment in BB Investment.14’
[26] At paragraph 29, the Court said:
‘The Tribunal accepted that if the retrenchments had been aimed at removing positions that were
duplicated as a result of the merger, this would be merger specific. However, there was
“insufficient evidence to demonstrate that a principal reason for the retrenchments was the
removal of duplicate roles ” arising from the merger. The probabilities favoured Coca-Cola's
reasons for the retrenchments, namely the need to reduce costs to address the impact of the
sugar tax, adverse macroeconomic circumstances and rising input prices. The Tribunal
accordingly granted an order declaring that Coca-Cola had substantially complied with condition
9.2 and set aside the notice of apparent breach.’
[27] At paragraphs 69 and 70, the Court held:
‘Although the wording of the conditions did not in my view warrant the application of the second
judgment in Aveng, the Tribunal ultimately asked itself the right questions. It said, quoting BB
Investment, that —
“firms are dynamic institutions ” and “not every change that results post -merger is necessarily attributable
to the merger ”. That approach it held “is far too mechanistic ” and changes can be conceived of “a firm's
behaviour even post -merger that would have happened in any event and can be thought of as not being
merger specific.”'
That observation on the part of the Tribunal aligns with the but -for test, the first stage of the
enquiry. In then seeking to identify the “true reason” for the retrenchments, the Tribunal tested for
the requisite link between the merger and the retrenchments and found this wanting. Its reasoning
was consistent with the authorities relating to the test for causation in the contractual and statutory
settings.’
13 Stellenbosch Farmers' Winery Group Ltd and Another v Martell et Cie and Others 2003 (1) SA 11 (SCA);
[2002] ZASCA 98.
14 BB Investment Company (Pty) Ltd v Adcock Ingram Holdings (Pty) Ltd [2014] 2 CDLR 451 (CT).
13
[28] The question to be asked in the present setting is whether, but for the merger, the
migration would still have taken place. Put differently, did the merger cause the migration
decision under consideration. Ms Hofmeyer, for the merging parties, was at pains to
emphasise that the merging parties demonstrated how Media24’s print titles have been
haemorrhaging readers and sales, with a consequent alarming and irreversible decline in
advertising revenue. It was those prevailing market conditions , she contended, that
caused Media24 to adopt the digital migration strategy and to migrate the titles from print
to digital. The applicants have not meaningfully and cogently disputed any of the facts
underpinning Media24’s decision to migrate to digital.
[29] Apparent from its explanatory affidavit, the Commission correctly approached the
argument on the increase in distribution costs in its merger analysis as follows:
‘The Commission critically found that there was unlikely to be any merger specific increase in
distribution costs. Whilst the Commission found that pre -merger, distribution costs were already
increasing substantially, this was due to the general decline of the newspaper print publishing
industry, and Media24’s separate decision to migrate some of its print tittles to digital not the
merger.’
[30] The applicants’ case regarding the link between the merger and Media24’s
migration decision is subversive of the Constitutional Court’s reasoning in Coca-Cola. The
flaw in their argument is that it seeks to compare the pre- and post-merger position to test
merger specificity and then postulates that any changes between the two is attributable
to the merger . That would be a far too mechanistic approach which the Constitutional
Court referred to. It cannot be that the increase in the distribution costs, which coincided
with the timing of the merger, meant that they were merger-specific.
[31] To conclude on this score, the migration decision was part of Media24’s
[31] To conclude on this score, the migration decision was part of Media24’s
overarching digital strategy, a unilateral commercial decision without any incident of loss
or acquisition of control. It did not form part of the merger as defined in s 12 of the Act
and was thus not notifiable.
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Whether the application concerns a review or an appeal
[32] The merging parties contended that the applicants conflated the appeal and review
process. They argued that an appeal is concerned with the merits of the case , which
entails that the second decision-maker is entitled to declare the first decision right or
wrong, whereas a review focuses on the process and the manner in which the decision -
maker came to the challenged conclusion.15
[33] The following seminal remarks by the Constitutional Court in Bato Star Fishing
(Pty) Ltd v Minister of Environmental Affairs and Tourism and Others are apt: 16
‘What will constitute a reasonable decision will depend on the circumstances of each case, much
as what will constitute a fair procedure will depend on the circumstances of each case. Factors
relevant to determining whether a decision is reasonable or not will include the nature of the
decision, the identity and expertise of the decision -maker, the range of factors relevant to the
decision, the reasons given for the decision, the nature of the competing interests involved and
the impact of the decision on t he lives and well -being of those affected. Although the review
functions of the Court now have a substantive as well as a procedural ingredient, the distinction
between appeals and reviews continues to be significant. The court should take care not to usurp
the functions of administrative agencies. Its task is to ensure that the decisions taken by
administrative agencies fall within the bounds of reasonableness as required by the Constitution.’
In the SCA, Schutz JA held that this was a case which calls for judicial deference. In explaining
deference, he cited with approval Professor Hoexter's account as follows:
“[A] judicial willingness to appreciate the legitimate and constitutionally -ordained province of
administrative agencies; to admit the expertise of those agencies in policy -laden or polycentric
issues; to accord their interpretation of fact and law due respect; and to be sensitive in general to
the interests legitimately pursued by administrative bodies and the practical and financial
constraints under which they operate. This type of deference is perfectly consistent with a concern
for individual rights an d a refusal to tolerate corruption and maladministration. It ought to be
shaped not by an unwillingness to scrutinise administrative action, but by a careful weighing up
of the need for - and the consequences of - judicial intervention. Above all, it ought to be shaped
15 C Hoexter and G Penfold Administrative Law in South Africa 3 ed 2021 at 137; see also Rustenburg
Platinum Mines Ltd (Rustenburg Section) v Commission for Conciliation, Mediation and Arbitration 2007
(1) SA 576 (SCA) para 31.
16 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism and Others 2004 (4) SA 490
(CC); 2004 (7) BCLR 687 paras 45-46.
15
by a conscious determination not to usurp the functions of administrative agencies; not to cross
over from review to appeal.”
Schutz JA continues to say that “(j)udicial deference does not imply judicial timidity or an
unreadiness to perform the judicial function”. I agree. The use of the word “deference” may give
rise to misunderstanding as to the true function of a review court. This can be avoided if it is
realised that the need for courts to treat decision-makers with appropriate deference or respect
flows not from judicial courtesy or etiquette but from the fundamental constitutional principle of
the separation of powers itself.’ (My emphasis.)
[34] The applicants’ contention is that the Commission misunderstood the scope of the
investigation; committed an error of law relating to the scope of its statutory powers; failed
to have regard to the relevant consideration; and acted unlawfully, unreasonably and/or
irrationally in inter alia, failing to consider the applicants’ counterfactual. It is on this basis
that a review-related relief is sought.
[35] As I see it, t he Commission made the impugned decision as an organ of state
performing a public function in terms of legislation. The Commission’s decision constitutes
administrative action in terms of s 1(a)(ii) of the Promotion of Administrative Justice Act 3
of 2000 (PAJA) and thus reviewable by this Court under PAJA. Additionally, the decision
constitutes the exercise of public power equally reviewable under the principle of legality.
Even though some of the applicants’ submission signifies an appeal as opposed to a
review, regard being had to how they have couched their grounds of review, the approach
we adopt would be on the basis that the Commission’s merger approval is subject to
review under PAJA.
The Commission’s reasons for merger approval
[36] Assessing competition in the context of the merger, the Commission found:
[36] Assessing competition in the context of the merger, the Commission found:
‘(T)hat competition concerns may arise if the merged entity requires its customers to either (i)
exclusively procure coldest printing services and distribution services from the merged entity or
(ii) procure printing/distribution on condition that the customer als o procures distribution/printing
services. That is because the merged entity’s competitors are not able to offer a similar bundle.
16
To address this concern, the Commission and the [merging] parties have agreed that for 3 years
after the implementation of the merger, the merged entity will offer coldest printing and distribution
services separately. These conditions are set out in Annexure A hereto.
Given the conditions, the Commission concluded that the merger is unlikely to result in a
substantial lessening or prevention of competition in any relevant market.’
[37] On public interest considerations, the Commission stated:
‘In order to address employment concerns, the merging parties have tendered the commitments
set out in Annexure A.
The merger does not raise any other public interest concerns that require further intervention.’
[38] The two conditions set out in the Commission’s report are these:
‘2. EMPLOYMENT CONDITIONS
2.1. Save for the Affected Employees, Merging Parties shall not retrench any
employees as a result of the Merger for a period of 3 (three) years from the
Implementation Date.
2.2. For the avoidance of doubt, Merger specific retrenchments do not include (i)
voluntary retrenchment and/or voluntary separation arrangements; (ii) voluntary
early retirement packages; (iii) unreasonable refusals to be redeployed in
accordance with the provisions of the Lab our Relations Act, 66 of 1995; (iv)
resignations or retirements in the ordinary course of business; (v) retrenchments
lawfully effected for operational requirements unrelated to the Merger; and (vi)
terminations in the ordinary course of business, includin g but not limited to,
dismissals as result of misconduct or poor performance.
2.3. Novus will seek to redeploy as many of the Target Firms’ potentially Affected
Employees as possible should vacant positions become available at Novus and
its subsidiaries, provided the employees are sufficiently qualified and experienced
for such roles.
2.4. Media24 will offer the Affected Employees preferential employment as and when
2.4. Media24 will offer the Affected Employees preferential employment as and when
opportunities arise at its operations, for a period of 3 (three) years and provided
the employees are sufficiently qualified and experienced for such roles.
17
3. TYING / BUNDLING
3.1 For a period of 3 (three) years post the Implementation Date, the Merged Entity
shall offer customers coldest printing services and On the Dot’s distribution
services separately. For the avoidance of doubt, the Merged Entity will not require
that customers of the Merged Entity procure coldest printing condition that they
also procure distribution services from the Merged Entity (or vice versa).’
The review
[39] The applicants contend that the review is justified because the merger will result
in a substantial prevention and lessening of competition , with no countervailing
efficiencies that outweigh the significant anti-competitive effect of the merger. In addition,
it is submitted that the merger will also have a significant negative impact on the public
interest in multiple ways.
[40] In Mediclinic, the Constitutional Court trenchantly restated that this Court does not
have unbridled powers to interfere with the decision s of the Tribunal. Although this was
said in the context of an appeal the principle is also apposite in the consideration of the
review, particularly where th is Court , as here , is enjoined to evaluate certain fa ctual
findings made by the Commission. It was there said: 17
‘[The Competition Appeal Court’s] powers to interfere with the decision of the Tribunal were more
aptly set out by Rogers JA in [Imerys South Africa (Pty) Ltd v The Competition Commission [2017]
ZACAC 1] in these terms:
“Where a determination of the Tribunal on a matter identified in s ection 12A(1) is brought on
appeal, this Court will, apart from the well-known restrictions on appellate interference in factual
findings, show a measure of deference to the Tribunal. The matter was put thus in the [Schumann
Sasol (SA) (Pty) Ltd v Price's Daelite (Pty) Ltd [2001-2002] CPLR 84 (CAC) ([2002] ZACAC 2)]
case:
‘The approach which this Court adopts to an appeal against the decision of the Tribunal in respect
of a merger should take cogni sance of the composition and role of the Tribunal as a specialist
body which consists not only of lawyers but also of members possessed of the necessary financial
and economic knowledge and thorough grasp of the relevant policy issues required in these kind
17 Mediclinic fn 3 para 44.
18
of deliberations. Section 12A requires that the Tribunal make a determination after a holistic
inquiry into whether the proposed merger is likely to substantially prevent or lessen competition.
In assessing such a decision, this Court should take account of the composition and expertise of
the Tribunal as well as the nature of the enquiry which entails an element of probabilistic
investigation into the effect of the proposed merger ….In its decision as to whether to set aside,
amend or confirm the decision o f the Tribunal, this Court must be cautious before imposing its
own conception of the policy considerations upon the decision adopted by the Tribunal. The Court
should seek rather to examine and test rigorously the justifications offered by the Tribunal for the
decision to which it has arrived before it invokes its power in terms of section 17.”’
[41] The Commission is the conduit through which the Competition Act seeks to
investigate, control and evaluate restrictive practices, abuse of market dominance and
mergers. It must act as both the watchdog and enforcement vehicle as far as
transgressions of the provisions of the Competition Act are concerned.18 To this end, it is
responsible to authorise, with or without conditions, prohibit or refer mergers of which it
receives notice in terms of Chapter 3.19
[42] The reviewability of the Commission’s decision must be assessed against the
backdrop of what is set out in the preceding paragraphs. The Commission abides the
decision of this Court . It filed an explanatory affidavit solely to assist the Court in its
consideration of the application. In so doing, it confined itself to the merger investigation
and its findings as contained in its report . The applicants did not substantiate their claim
that the explanatory affidavit travels beyond merely explaining the process or the contents
of the record. I am therefore unpersuaded that the Commission has fully entered the ring
of the record. I am therefore unpersuaded that the Commission has fully entered the ring
as a litigant to actively defend its decision to approve the merger . In my view, t he
applicants’ objection to the delivery of this affidavit and their request that it be struck out
is baseless.
18 Competition Commission of South Africa v Pickfords Removals SA (Pty) Ltd [2020] ZACC 14; 2021 (3)
SA 1 (CC); (2020 (10) BCLR 1204 para 42.
19 See Competition Commission of SA v Telkom SA Ltd and Others [2010] 2 All SA 433 (SCA) para 36 ;
See also s 21(1)(e) of the Competition Act 89 of 1998.
19
[43] The review is founded on three grounds. First, the applicants contend that the
Commission misunderstood the scope of the investigation and that it was required to
enquire into the economic substance of the transaction . Thus, it committed an error of
law relating to the scope of its statutory powers and duties. Second, the applicants
contend that the Commission failed to consider and apply the correct counterfactual test,
therefore it did not perform the necessary public interest assessment of the effects of the
merger. Third, it is contended that the Commission failed to take into account relevant
considerations and did not properly apply its mind to the concerns and evidence provided
by third parties.
The first ground of review : the Commission ’s alleged misunderstanding of its
investigative powers
[44] This review ground has its foundation on the migration strategy and consequently
regurgitates the issues that have already been addressed under the Commission’s
merger jurisdiction . For instance, the applicants contended that a constitutionally
compliant and purposive interpretation of the merger control provisions required the
Commission to assess not simply the form of the transaction that was notified to it, the
acquisition of On the Dot and related sale assets, but the economic reality and the parties’
economic objectives underlying the acquisition. It was argued that the notified transaction
formed an integral and necessary step of an underlying strategic plan which comprised
interlinked steps or unitary decision -making process , being the closure of certain of
Media24’s terminating newspapers, the transition to digital of those titles and the sale of
the On the Dot newspaper distribution business. It was contended that failure by the
Commission to have regard to the broader context and consequences of the transaction
notified to it constituted a reviewable irregularity.
[45] The applicants further argued that the composite plan has led to a significant
[45] The applicants further argued that the composite plan has led to a significant
increase in distribution costs and a reduction in the distribution footprint of the third-party
newspaper titles distributed by On the Dot , with a detrimental effect on the
competitiveness of the competing newspaper titles. Under Novus, it was argued, On the
Dot’s distribution network has contracted , its deliveries to outlying and less populated
20
areas has been curtailed and readership in regions already underserved by media is
being eroded. The introduction of new geographic pricing by On the Dot , it was argued,
makes distribution to remote or lower-volume markets more expensive. Rising distribution
costs, shrinking coverage, and mounting financial pressures on publishers (including HDP
Publishers) are all contributing to making printed newspapers more expensive and less
accessible.
[46] The applicants contended that the above constitutional and public interest harms
were foreseeable and ought to have been taken into account by the Commission had it
conducted a proper merger investigation. Instead, it adopted an unduly blinkered
approach to its statutory mandate.
[47] The Commission’s merger jurisdiction has already been discussed at great length
and need not be repeated. It bears emphasis that the strategy to digitise did not amount
to a change in control that resulted in the acquisition of another firm (not in the form of
shares, an interest or assets nor does it amount to an amalgamation ). The strategic
decision to digitise was first conceptualised in 2019 , the decision to migrate the
terminating newspapers around 2022 , whereas the merger was negotiated between
January 2024 and July 2024. From its explanatory affidavit t he Commission concluded
that the migration strategy was a ‘unilateral, independent decision taken by Media24
before the merger that stood to be assessed’. Against the backdrop of the discussion
under the rubric of the Commission’s merger jurisdiction, it can hardly be contended that
the Commission misunderstood the scope of its investigative powers in respect of the
merger.
[48] Under this ground of review the merger approval is also assailed on the basis that
the Commission should have been astute to recognise and consider the impact of the
implementation of the composite plan on the right of freedom of expression. It was argued
implementation of the composite plan on the right of freedom of expression. It was argued
that the approach the Commission adopted ignored the objectives of the Act and the
constitutional prism through which it was required to apply its powers and duties under
the merger provisions of the Act . According to the applicants, the implementation of the
composite plan will result in the closure of several major printed newspaper titles thereby
21
undermining the public’s ability to access diverse viewpoints. This, they argued, threatens
the plurality of voices in South Africa’s media landscape (a cornerstone of the right to
freedom of expression) and violates the right of members of the public to access
information. It wa s argued that freedom of press is not consonant with the press being
dominated by a single press company, such as News24 or with limiting the availability of
media news to digital platforms such as News24.
[49] The applicants argued that printed news remains a critical source of original news
for many South Africans. They contended that Media24’s plan will result in the closure
not only of its print titles but also likely to result in the closure of several rival print
newspapers. The digital format of news, it was argued, is entirely different to the printed
media, focusing on snippets and short-form news articles while print allows for opinions,
analysis and more in -depth reportage. The closure will relegate news to a ‘one size fits
all’ approach. Printed news is different and often more targeted and accessible than
online subscription services, so ran the argument.
[50] It was further argued for the applicants that there are barriers which impede South
Africans from accessing online news due to, inter alia, a lack of affordable, reliable internet
or devices necessary to access online news. Even if coverage is available, subscription
fees and the need for a credit card to pay such fees exclude a large part of the population.
[51] The argument on the right to freedom of expression bears all the hallmarks of the
migration decision and is therefore unrelated to the merger approval. Mr AJ Basson, the
editor in chief of News24, deposed to an affidavit in answer to the non-confidential version
of some specified paragraphs in the supplementary founding affidavit by Mr AJ Roets
filed in support of Part B of the application , as well as certain paragraphs of the non -
filed in support of Part B of the application , as well as certain paragraphs of the non -
confidential replying affidavit to which Mr Roets cross-references. In paras 23 -24 Mr
Basson states:
‘Accordingly, in terms of news consumption preferences:
The unique digital readers total 29 848 112 (96%); and
Unique print readers total 1 105 275 (4%).
22
That warrants repetition: 96% of consumers access their news via digital means. And so even if
the shift to digital were to result in total foreclosure of the entire print media industry - which is
denied- it would still only affect 4% of the consumers. Mr Roets’ claims of the shift to digital
signaling the end for media freedom are, at best, grossly overstated’.
These averments were not seriously contested by the applicants.
[52] Mr Basson’s affidavit may not have been before the Commission during its
investigation of the merger, as Mr Wilson, for the applicants, argued. However, through
its investigation , the Commission found that the South African media landscape has
altered drastically over the years and has been experiencing a decline in print media
readership. On the state of the industry, in its report, the Commission referred to the article
titled ‘Independent Media to Restructure in Response to Banking Threats and Rising
Operational Cost’, where, inter alia, it was stated:
‘Print media has been an iconic pillar of our company for decades but the current business model
is no longer sustainable in a world where digital platforms offer far greater reach and engagement
opportunities.’
[53] The Commission tabulated the o verall decline in demand for daily, weekly and
weekend newspapers within South Africa, consistent with the indication of the Association
of Independent Publishers (which represents 191 community newspapers publications,
and which equally highlighted the difficulties encountered by community papers which
resulted in a 64.6% (22.6 million to 8 million) decline in readership between 2016 and
2023 and proportional decline in advertising revenue.
[54] With regard to the pricing effects , the Commission found that the increase in
distribution costs was not attributable to the merger because the industry is in decline and
the increase in distribution costs was already a feature of the market pre-merger and likely
the increase in distribution costs was already a feature of the market pre-merger and likely
to cont inue po st-merger due to the constant decline in demand and decisions by
publishers to exit print newspapers. The Commission explained that it is not the merger
‘that should be understood to constitute a threat to the right to freedom of expression, and
in particular the freedom of the press and other media and freedom to receive or impart
information and/or ideas. Consideration of the merger effect on this right that are caused
23
by the digitization of the media industry and concomitant increase in publishers’ costs, do
not arise as a result of this merger’.
[55] In this digital age, change is accelerating and inevitable . As this Court correctly
observed in Part A, ‘(I)t is the dynamic character of the market which created the impetus
for the migration decision and hence the continuing decline of print media requiring
distribution’. The criticism that the Commission misunderstood the scope of the
investigation; that it failed to enquire into the economic substance of the transaction; and
that it committed an error of law relating to the scope of its statutory powers and duties ,
cannot be sustained. This ground of review must fail.
The Second Ground of review : The Commission’s alleged failure to consider the
relevant counterfactual
[56] The applicant s contended that the Commission acted irrationally and
unreasonably in that it applied the incorrect counterfactual , failed to assess the correct
counterfactual and consequently the negative public interest effects of the transaction
and competition consequences associated to thereto.
[57] The applicants submitted that the Commission accepted Media 24’s argument that
the relevant counterfactual to the sale transaction with Novus was the closure of On the
Dot and the community newspapers included in the sale. This, so it was argued, ignored
that Capital , an HDP firm, made a better offer for On the Dot and the community
newspapers. It also overlooked that Capital made a further offer to purchase the
terminating newspapers in addition to the sale assets. Capital argued that it did so in an
endeavour to find ways to keep distribution costs manageable and to retain the print titles
for the benefit of employment , media diversity in South Africa and a greater spread of
ownership than the notified transaction . It was argued that had Media24 accepted
Capital’s offer to purchase the terminating newspapers , this would have ensured the
Capital’s offer to purchase the terminating newspapers , this would have ensured the
ongoing survival of the terminating newspapers and avoided severe employment
consequences and On the Dot increased distribution costs associated with the closure of
the terminating newspapers.
24
[58] Ms Hofmeyer argued that it was virtually impossible to pin down what case the
merging parties had to meet because the applicants’ case has shifted continuously
throughout the proceedings and remains utterly opaque . To illustrate this point , she
argued that during the Commission’s investigation and in their founding papers , the
applicants contended for a counterfactual in which Capital acquired the sale assets and
the migration titles. However, in their replying affidavit in Part A, for the first time, they
claimed that the Commission was required to have regard to a new counterfactual in
which Capital acquired only the sale assets. This completely new counterfactual, she
argued, was not properly placed before the Commiss ion during its investigation , thus it
cannot be relied upon. She added that these irreconcilable counterfactuals are also
articulated in the applicants’ heads of argument.
[59] What the evidence points to is that, when Capital made its offer on 13 June 2024,
it had already known for a week that Media24 had accepted Novus’s offer. The merging
parties’ papers are replete with contentions that the migrating titles were never for sale
because Media24 has brand equity in the titles. The terminating newspapers have always
been earmarked for migration. The Commission rejected the applicants’ counterfactual
regarding Capital’s bid to acquire the sale assets and the terminating newspapers for this
very reason, and because Media24 had accepted Novus ’s offer prior to Capital ’s
submission of its offer to it.
[60] The applicants’ counterfactual resonates with what this Court was confronted with
in Pioneer Hi-bred International Inc and Another v Competition Commission and Another
(Pioneer).20 Expressing disapproval with the approach adopted by the Tribunal in that
case, this Court said:
‘This approach effectively compels Pannar to enter into such a “strategic partnership” to prevent
its demise and thereby preserve its germplasm pool, which would be in the public interest of
20 Pioneer Hi-bred International Inc and Another v Competition Commission and Another [2012] ZACAC 3
para 22.
25
maintaining competition, by ensuring the presence of at least three competitors in the market. The
Tribunal correctly noted that, in the context of a higher price being paid for a target firm, in terms
of a transaction under scrutiny, as opposed to an alte rnative transaction, the private interests of
firms “cannot ever trump the broader public interest consideration of a substantial lessening or
prevention of competition, with concomitant negative effects on consumers”.
However, in my view, such an approach is of limited application in the present context. The
Tribunal framed the key question for determination thus: “If realistic alternative strategies exist
that Pannar could pursue and which could stem the alleged decline of its maize seed business,
which strategies may include an alternative transaction with another partner, ultimately of
Pannar’s choice, should the current transaction not proceed.” The public interest in maintaining
competition in the market, cannot justify the refusal of a merger, on the basis that competition will
be maintained in the market, as a consequence of such refusal, by virtue of unsubstantiated
speculation that the target firm will enter into a partnership with another firm, which is not a
competitor in the market, and which is wholly unsuited to a merger. The Tribunal’s approach runs
the danger of placing too much emphasis upon the interests of competitors rather than upon the
key principle, of maintaining or promoting competition in the relevant market. The public interest
in maintaining competition in the market, does not justify the exploitation of the vulnerability of a
target firm, by the competition authorities, in such a manner. To condone such an approach would
constitute an intrusion into the management and control of private companies, not justified in the
public interest, particularly, as on the available evidence such a merger could not possibly be
considered to make financial sense.’ (My emphasis.)
considered to make financial sense.’ (My emphasis.)
[61] One of the key statutory responsibilities of competition authorities in merger
transactions, as already indicated, is to ensure that mergers do not have a negative effect
on competition in a market and to conduct the public interest analysis of the notified
transaction. The Commission considered the potential dilution in HDP ownership . It
brought its mind to bear on both quantitative and qualitative factors of what underpinned
the BBEE requirements. Ultimately, the target firms will remain significantly transformed
post-merger. The Commission found that the merger could be justified on public interest
grounds because there was arguably a positive HDP ownership impact. Any negative
HDP ownership, as there might be, was not substantial.
26
[62] In the final analysis, i t does not lie within the Commission’s remit to determine
which firm is or was suitable to purchase the sale assets under the guise of ‘correct’
counterfactual or public interest analysis, an exercise which the applicants contend the
Commission ought to have performed. As the Commission explained, ‘even in a scenario
where Capital/Caxton were to purchase the target assets this would amount to no more
than placing emphasis on the interest of competitors and an interference into the
management and control of private firms not justified in the public interest’.
[63] In substance, this ground of review must fail because a fair-minded examination
of the Commission’s report demonstrate s a thorough consideration of the relevant
counterfactual in relation to the sale assets. The Commission acted lawfully and rationally
in rejecting as the counterfactual the acquisition by Capital of the sale assets with the
migrating titles which were not for sale . Neither can it be argued that its decision
undermines the objectives of the Act.
The third ground of review: The Commission’s alleged failure to have regard to
relevant considerations and apply its mind to submissions by third parties
[64] The applicants contended that the investigation by the Commission was cursory
and narrowly focused in that the Commission did not afford itself time to properly consider
relevant evidence of third parties before issuing its conditional approval of the merger. It
was argued that the Commission was still investigating the proposed transaction on the
day on which it approved it; requesting third parties to supply it with documents and
information on the afternoon of the approval. Therefore, the information produced by third
parties at 16h38 on 30 October 2024, could not properly have been considered by the
Commission before issuing its decision that same evening.
[65] It was further argued for the applicants that the fundamental change in the pattern
[65] It was further argued for the applicants that the fundamental change in the pattern
and fees for distribution at On the Dot post -merger were raised by third parties , but the
Commission did not take this into account. This has significant competition and public
interest effects as th e change in the distribution model will result in significant costs
increases for newspaper publishers and ultimately lead to reduced sales of paid for
27
newspapers in South Africa . This , it was contended, undermined the viability of the
remaining competing newspaper publishers reliant on On the Dot’s distribution services ,
including Caxton, Capital, Arena, Mail & Guardian and independent Newspapers , all of
whom are HDP-owned.
[66] The Commission had several engagements with third parties with regard to their
concerns in relation to distribution costs . Following these interactions the Commission,
inter alia, considered it unlikely that the merged entity would have a commercial incentive
to raise publication costs which may push th ird parties to exit the market . Furthermore,
the Commission considered the merg ing parties’ disclosure that the migration decision
would negatively affect On the Dot ’s revenue base with the resultant spread of On the
Dot’s fixed costs over fewer revenues in future, which would make business increasingly
costly. The Commission also had regard to the disclosure that this may affect pricing to
all publications which On the Dot distributed . It held , however, that the increase in
publishers’ distribution costs is not as a result of the merger but the market conditions
and the migration decision, which would reduce the volume of distribution by On the Dot.
[67] Based on the aforegoing exposition, t he third parties’ complaint of lack of
consultation is devoid of any merit . In addition, based on the evidence, the issue of
potential foreclosure that the third parties raised had already been investigated by the
Commission. Consequently, the third parties ’ grievance that the Commission did not
dedicate sufficient time to consider their submissions is equally without any basis.
[68] Under this review ground the applicants condemned the merging parties for their
failure to play open cards with the Commission and thus tainted the constitutionality and
legality of the merger approval by failing to disclose to the Commission their intention to
legality of the merger approval by failing to disclose to the Commission their intention to
conclude the Transitional Services Agr eement (the TSA), which embodied and shaped
their transaction. The applicants argued that the non -disclosure of the TSA entailed that
the Commission took the impugned decision in ignorance of material facts and failed to
take into account relevant consideration which makes its merger approval susceptible to
review.
28
[69] It was argued for the applicants that the TSA was designed to make the sale of On
the Dot to Novus more attractive by compensating Novus for losses stemming from the
closure of Media24’s titles. In terms of the TSA, it was argued, Media24 agreed to make
various payments to Novus as a ‘sweetener’ for the acquisition of On the Dot in order to
compensate Novus for the changes to the distribution business that would be brought
about by Media24’s closure of the terminating newspapers.
[70] The applicants averred that under the TSA, Media24 assumed liability for the
inevitable retrenchments at On the Dot which would follow from the closure of the
terminating newspapers. It was further argued that Media24 also committed to
indemnifying Novus for retrenchment costs, subsidi sing the continued operation of the
distribution network in the Northern Provinces and paying out substantial sums for
‘negative impacts due to planned title closures ’. The post-merger scenario, where
distribution footpri nts shrink, costs rise, and certain intangible costs are indemnified ,
would significantly harm independent publishers and the public interest, so the argument
went. The merg ing parties denied that they deliberately withheld the TSA from the
Commission.
[71] The Commission was alive to the fact that the migration decision would affect On
the Dot’s business. This is evident from the correspondence dated 12 September 2024 ,
which the merging parties directed to it, which recorded that the migration decision:
‘(W)ill necessitate a restructuring of OtD’s operations to align with the resulting revenue shortfall,
as these titles contributed R109.5 million to OtD’s revenue in FY2024. Media24 estimates that
approximately 137 jobs will be lost at OtD, and 87 addition al jobs among the labour broker
employees, as a result of ceasing to print these titles. Additionally, the decision will also result in
possible retrenchments in the SNL24, Afrikaans news and AdSpace24 divisions, due to shared
possible retrenchments in the SNL24, Afrikaans news and AdSpace24 divisions, due to shared
resources among the divisions as well as in various shared services operations. Overall, the
decision is expected to result in 318 job losses, independent of the merger. Media24 has,
however, confirmed that it will be retaining all 66 journalists initially identified for retrenchment,
from the four print newspapers earmarked for closure, incorporating them into Netwerk24,
News24 and at the Daily Sun website respectively.’
29
[72] The applicant’s argument under this ground is premised on what has now become
a common theme, the sale of On the Dot and the closure of terminating newspapers, as
it maintained that ‘the belated-disclosed TSA highlights the interconnectedness’ between
the specified transactions. It must be borne in mind that the complaint on the belated
disclosure of the TSA was introduced for the first time in the applicant’s replying affidavit.
This prompted the merging parties to file a response thereto. Insofar as the replying
affidavit sought to introduce a new ground of review , dictates of fairness and the audi
principles required the merging parties to be afforded the opportunity to respond thereto.
The merging parties leave to file further affidavit on this aspect ought to be granted, and
it is so ordered. There can be no prejudice.
[73] The TSA became relevant to these proceedings because , in the applicants’
amended notice of motion, Part B, they sought a new pricing and distribution remedy. It
is not in dispute that the TSA was concluded between the merging parties on 31 October
2024, and therefore, it did not exist in any shape or form when the transaction was notified
to the Commission. In my view, but for the pricing remedy, the TSA had no bearing on
the notified transaction because the terms of the sale agreements remain binding on
Novus from Augus t 2024 irrespective of the TSA which was concluded long after the
merger. The TSA could not have made the sale of assets more attractive because Novus
was bound to acquire the sale a ssets irrespective of the TSA. The TSA’s concomitant
subsidies and indemnity are completely distinct from the merger but were a consequence
of the migration because the subsidy was designed to plug a revenue gap resulting from
the migration and to bridge a period of operational change.
[74] It is important to reme mber that the Commission has an ongoing oversight
[74] It is important to reme mber that the Commission has an ongoing oversight
obligation post-merger approval. I n terms of s 15 (1) of the Act it may revoke its own
decision to approve or conditionally approve a small or intermediate merger or, in respect
of a conditional approval, make any appropriate decision regarding any condition relating
to the merger, including the issues referred to in section 12A(3) (b) and (c) if – (a) the
decision was based on incorrect information for which a party to a merger is responsible;
30
(b) the approval was obtained by deceit; or (c) a firm concerned has breached an
obligation attached to the decision.21
[75] In the end, t he lawfulness, rationality and reasonableness of a decision is
assessed at the time the decision is taken. 22 A lawful decision cannot be rendered
unlawful by subsequent events. The third ground of review must also fail.
Conclusion
[76] On a conspectus of all the factual and legal issues that bear upon this application,
I am of the view that the applicants did not make out a case for the primary relief sought,
that the Commission’s decision to approve the merger be declared unconstitutional . It
therefore falls to be dismissed. Neither did they make out a case for the review and setting
aside of the Commission’s merger approval.
Remedy
[77] The applicants urged this Court, in the event that the Commission’s decision is not
set aside, to still afford them a just and equitable alternative relief in terms of s 8(1)(e) of
PAJA through sanctioning new conditions on the merger approval in this way . First, by
imposing a duty on the merging parties to ensure that the distribution prices charged by
On the Dot revert to their pre-merger approval level and only increase over the next five
years in line with inflation as calculated with reference to the South African Reserve
Bank’s core inflation measure published by Statistics South Africa. Second, by ordering
that the footprint of the distribution services provided by On the Dot revert to their pre -
merger approval levels and remain constant over the next five years.
[78] The effect of the order, it was contended for the applicants, would ameliorate the
financial hardship being imposed on publishers consequent to the merger and afford them
21 See also Competition Commission of SA v Hosken Consolidated Investments Ltd and Another [2019]
ZACC 2; [2019] 1 CPLR 1 (CC); 2019 (3) SA 1 (CC); 2019 (4) BCLR 470 (CC) paras 69-73.
ZACC 2; [2019] 1 CPLR 1 (CC); 2019 (3) SA 1 (CC); 2019 (4) BCLR 470 (CC) paras 69-73.
22 eTV (Pty) Ltd and Others v Minister of Communications and Others [2016] ZASCA 85; 2016 (6) SA
356 (SCA).
31
a greater chance of survival as competitors in the media sector; would assist them to
regain a measure of financial stability and to suitably adapt their operations to compete
effectively with Media24 by inter alia expanding their digital operations; and would also
safeguard the freedom of expression by offering a path which would facilitate the
sustainability of freedom of press in South Africa , while allowing On the Dot to continue
operating. The applicants contend that the just and equitable relief is not contingent upon
the order setting aside the Commission’s impugned decision to approve the merger and
therefore not an order of substitution. However, a reading of the amended notice of motion
paints the exact opposite.
[79] Mr Mbikiwa, for the merging parties, argued that the merger was approved subject
to certain conditions. What the applicants now seek , he argued, is a different merger
decision with extraordinarily new, far-reaching conditions which constitutes substitution
relief. Counsel’s submission is manifestly good.
[80] Section 8(1)(c)(ii)(aa) of PAJA provides that:
‘(1) The court or tribunal, in proceedings for judicial review in terms of section 6(1), may grant any
order that is just and equitable, including orders –
…
(c) setting aside the administrative action and –
…
(ii) in exceptional cases –
(aa) substituting or varying the administrative action or correcting a defect resulting from the
administrative action.’ (My emphasis.)
[81] I am of the view that w hat the applicants require this Court to do amounts to no
more than substituting the Commission’s decision with its own. In respect of polycentric
decisions, which this one is, where the administrator has applied its skills and expertise
and a court has all the relevant information before it, the nature of the decision may dictate
that a court defer to the administrator .23 The administrative review context of s 8(1) and
that a court defer to the administrator .23 The administrative review context of s 8(1) and
23 Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd and Another
[2015] ZACC 22; 2015 (5) SA 245 (CC) para 50.
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the wording under ss (1) (c)(ii)(aa) of PAJA make it plain that substitution remains an
extraordinary remedy.24 In determining a just and equitable relief, a court must seek, as
far as possible, to fully vindicate an administrative breach. In this case, no such breach
was found, and therefore, substitution is not implicated. In any event, the word ‘and’ in s
8(1)(c)(ii) of PAJA is used conjunctively. What this means is that t he substitution order
may be available where exceptional circumstances are extant, and the administrative
action has been set aside. The administrative decision in this case remain s live and no
case has been made out , as I have shown, to set it aside. To repeat, a conditional
approval of a merger , as in this case, always remains subject to the continuing scrutiny
by the Commission.25 It follows that the alternative relief the applicant urged cannot be
sustained.
The question of costs
[82] The merging parties seek costs on a punitive scale. To justify such an order, they
contended that the applicants harassed them to provide undertakings under a threat of
urgent interdict proceedings; when the applicants failed in Part A, they approached the
Constitutional Court to answer the very question under consideration in Part B before this
Court. They pressed ahead with the litigation in the Constitutional Court and refused to
withdraw despite the merging parties’ legitimate dissuasion. It is further argued that in
Part B the applicants have made disparaging attacks against the Commission and the
merging parties without foundation. And lastly, that the applicants have endeavored to
argue this case by presenting a skewed version of the facts.
[83] In general, attorney and client costs are rarely granted. Such an award is
exceptional and intended to be punitive and indicative of extreme opprobrium by the
Court.26 The applicants may well have been compelled to act in the manner they did by
Court.26 The applicants may well have been compelled to act in the manner they did by
the exigencies of the litigation. Although there may have been some considerable degree
24 Ibid para 42.
25 Minister of Economic Development and others v Competition Tribunal and Others; South African
Commercial Catering and Worker’s Union v Wal-Mart Stores Inc [2012] ZACAC 6;[2013] 1 CPLR 37 (CAC)
(9 October 2012) para 33.
26 Plastic Converters Association of South Africa (PCASA) v National Union of Mineworkers Union of South
Africa and Others [2016] 37 ILJ 2815 (LAC) para 46.
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of frustration on the part of the merging parties at the behest of the applicants, I am
unpersuaded that costs be aw arded on a punitive scale. They shall follow the result on
party and party scale.
[84] In the result, the follow ing order is made:
1. Part B of the application is dism issed w ith costs including the costs of three counsel,
w here so employed.
M V PHATSHOANE
ACTING JUDGE OF APPEAL
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Appearances:
For the first and second applicants: J Wilson SC, S Pudifin-Jones and D Sive
Instructed by: Nortons Inc, Johannesburg
For the first to seventh respondents: K Hofmeyr SC, M Mbikiwa, S Quinn and A Molver
Instructed by: Edward Nathan Sonnenbergs Inc, Johannesburg.