CompTribOrion001
COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case no.19/R/April 2003
In the matter between:
Orion Cellular (Proprietary) Limited First Applicant
and
Telkom South Africa Limited First Respondent
The Standard Bank of South Africa Limited Second Respondent
Edgars Consolidated Stores Limited Third Respondent
DECISION
Introduction
This case deals with the protection given to confidential information under the
Competition Act, and with circumstances in which the Tribunal may order that
access to a firm’s confidential information be provided to a competitor.
Following a hearing on 15 December 2003, an order in the matter was issued
on 23 December 2003. The reasons for the order follow.
Factual background
Two applications with overlapping subjectmatter which were heard on 15
December 2003 are to be decided. The parties to them are identical. The
applicant, Orion Cellular (Pty) Ltd (“Orion”), is a company which provides
services to users of telephone systems, and in particular provides a leastcost
routing system for cellulartocellular telephone calls. The first respondent is
Telkom SA Limited (“Telkom”), a listed company which has a statutory
monopoly in landline telephone communications in South Africa. The second
respondent is The Standard Bank of SA Limited (“Standard Bank”), the
banking arm of a listed financial services group. The third respondent is
Edgars Consolidated Stores Limited (“Edcon”), a listed retail group.
The applications are interlocutory applications in a proceeding (“the main
application”) which Orion has brought before the Tribunal for interim relief
while a complaint brought by Orion against Telkom before the Competition
Commission is being investigated. In the main application, Orion alleges, in
effect, that Telkom is engaging in a campaign of predatory activities of which
Orion is the victim. Orion alleges that Telkom negotiated with two of Orion’s
customers, Standard Bank and Edcon, and entered into agreements with both
of them which undercut Orion and induced them to choose Telkom over
Orion. A prime part of the alleged inducement was discounts provided by
Telkom for its services. Orion alleges that the conduct of Telkom in concluding
these agreements amounted to contraventions of ss. 8(d)(i) or 8(c) or 8(d)(iv)
and/or 9 of the Competition Act, 1998, as amended (“the Act”).
In the first application (“the production application”), dated 17 September
2003, Orion sought an order compelling the respondents to produce all signed
and unsigned agreements between them in respect of the services provided
by Telkom relating to the subjectmatter of the main application.
In the second application (“the s. 45 application”), dated 14 November 2003,
Orion claimed an order in terms of s. 45 of the Act directing that a socalled
“volume and term voice discount plan agreement” dated 13 March 2003
between Telkom and Standard Bank, and a “volume and term voice discount
plan agreement” between Telkom and Edcon dated 15 July 2003, be made
available to Orion, and that it be declared that the information contained in
these agreements is not confidential. These are in effect the same
agreements as those referred to in the production application.
From the evidence it is clear that, when it filed the main application, Orion and
its attorneys had not seen these agreements. By the time the production
application was filed, Orion’s attorneys (but not anybody at Orion) had been
application was filed, Orion’s attorneys (but not anybody at Orion) had been
allowed by Telkom to inspect the agreement with Standard Bank, but subject
to conditions which prevented the attorneys from making copies of the
agreement or extracts from it, and also preventing them from disclosing the
contents of the agreement to their client or its external consultants.
The attorneys who inspected the agreement, Messrs Stein and Scop,
considered that the agreement was not confidential but that it and the Edcon
agreement, which had been concluded later, were pivotal to Orion’s case in
the main application, and that it was essential that Orion be enabled to inspect
them in order to prepare its replying evidence in the main application. Telkom
had denied in its answering evidence in the main application that the
conclusion of the agreements had been illegal, and there was thus a basic
dispute about their effect, and this question would have to be taken further in
the replying evidence.
The two interlocutory applications were opposed by Telkom, which filed
affidavits setting out its attitude towards them. The applications were not
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opposed by Standard Bank and Edcon, but both those companies submitted
letters to the Tribunal stating that, while they would abide by the Tribunal’s
decision, they regarded the agreements as confidential.
Copies of the agreements were made available to the Tribunal by Telkom
when it filed its answering evidence in the production application, under cover
of a Form CC7 claiming confidentiality for them in terms of s. 44 of the Act.
The Form CC7 stated that confidentiality was claimed in respect of the whole
of both agreements and, in each case, an annexure to the agreement. The
firm owning the relevant information was said to be Telkom and its customer
(Standard Bank in the case of one agreement and Edcon in the case of the
other). The forms stated further in the relevant place that the nature of the
economic value associated with the confidential information was that “such
information is of a sensitive commercial nature and has economic value.
Should the information be divulged to unauthorised parties, it would seriously
prejudice the interests of the parties and their shareholders.”
In making the agreements available for inspection by Orion’s attorneys on the conditions
outlined above, Telkom maintained that it was abiding by the principles set out by the
Competition Appeal Court in The Competition Commission of South Africa and Unilever
PLC and others (case no. 13/CACJan02) . In that case a merger was under consideration by
the Tribunal and access to the record supplied by the Commission to the Tribunal was sought
by the parties to the merger after the Commission had recommended conditional approval of
the merger and had withheld from the parties certain information on which it had relied in
formulating its recommendation. The parties to the merger wanted access in order to consider
whether to challenge claims that the withheld information was confidential. The Competition
whether to challenge claims that the withheld information was confidential. The Competition
Appeal Court ruled that access should be provided to the parties’ legal representatives at the
offices of the Commission, that the legal representatives were not entitled to reproduce the
record, and that the legal representatives were to give undertakings of confidentiality to the
Commission before having sight of the record.
This case is not the only litigation between the parties. We were informed at
the hearing that in a High Court case heard in the Transvaal Provincial
Division earlier in 2003, in which a decision had been issued some weeks
before the hearing in this matter, Telkom alleged that Orion had acted
unlawfully in providing to certain corporate customers a system having the
capacity to route cellulartocellular (“CTC”) calls from a customer’s
switchboard directly into the cellular network, thereby bypassing Telkom and
hence depriving Telkom of some of its revenue. It appears that the High Court
has ruled largely in favour of Orion. Its decision is, however, being taken on
appeal by Telkom.
The two applications before the Tribunal were argued together and since the
relief sought in them is in practice identical they are treated in the Tribunal’s
order and in this decision as one matter.
The questions posed to the Tribunal by both applications are whether the
Standard Bank agreement and the Edcon agreement are confidential, and
whether they are to be made available to Orion and others, conditionally or
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otherwise.
We point out at the outset that the Unilever decision cited above takes a dispute about the
confidentiality of information under consideration by the Commission or Tribunal only to the
point where a potential litigant is enabled to make a decision whether there is a basis to
challenge a claim to confidentiality of the information. Once that party’s legal representatives
have inspected the allegedly confidential document and on their advice their client proceeds
with the challenge, the matter reaches another plane, and the rules in the Unilever case
reach their ambital limit. Other considerations then apply.
Telkom also made a claim to confidentiality, supported by a Form CC7, in
respect of paragraph 17 of its answering affidavit in the s. 45 application. A
copy of this paragraph was supplied to the Tribunal but not to Orion. The
claim to confidentiality in the Form CC7 contained the assertion that the
information in that paragraph was owned by Telkom. The nature of the
economic value of the relevant information was stated in the same wording
as in the Form CC7 relating to the agreements which Telkom entered into with
Standard Bank and Edcon. That wording is set out above.
Regrettably, the status of paragraph 17 was not argued by the parties’
counsel on 15 December 2003, and the claim to confidentiality in regard to it
was accordingly left in limbo. In order to preserve any justification which
Telkom may have for it, a ruling that paragraph 17 should provisionally be
treated as confidential, but subject to restricted access by Orion and its
advisors, was included in the order made on 23 December 2003.
Relevant statutory provisions
Confidential information is defined in s. 1 of the Act as:
“trade, business or industrial information that belongs to a firm, has a particular
economic value, and is not generally available to or known by others ”.
S. 44 provides that a person who submits information to the Commission or
the Tribunal, may identify information as confidential. Such a claim must be
supported by a written statement explaining why the information is considered
to be confidential. Form CC7 has been prescribed for this purpose.
In terms of s. 44(3), the Tribunal may determine whether or not the
information is confidential, and if it finds that the information is confidential,
may make any appropriate order concerning access to that information.
A person seeking such a determination may in terms of s. 45(1) apply to the
Tribunal in the prescribed manner and form for the determination. Rule 42 of
the rules for the Conduct of Proceedings in the Competition Tribunal (“the
Tribunal’s rules”) lays down the procedure for such an application, namely the
filing of a notice of motion and supporting affidavit. Until a final determination
has been made concerning the status of the information, the Tribunal must, in
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terms of s. 45(3) of the Act, treat the information as confidential.
Telkom made much in the proceedings of rules 21 and 28 of the Tribunal’s rules. Rule 21
deals generally with the convening of prehearing conferences for matters which are to be
heard by the Tribunal, and their subjectmatter. Rule 22 sets out powers which the presiding
Tribunal member at a prehearing conference may exercise. These include, under subrule
22(1))(c)(v), the power to give directions regarding the production and discovery of
documents whether formal or informal. Rule 28 states that rules 21 and 22 ( inter alia ) apply to
prehearing procedures in cases of interim relief applications.
Reference should also be made to s. 27(1)(d) of the Act, which empowers the
Tribunal to make any ruling or order necessary or incidental to the
performance of its functions in terms of the Act.
The parties’ submissions at the hearing
Orion was represented at the hearing on 15 December 2003 by Messrs Kuper
and Bhana. Mr Kuper made it clear at the outset that he and Mr Bhana had
not seen the agreements in contention, and were not prepared to enter into
any undertaking which paved the way for them to read the agreements but
which prevented them from discussing the contents of the agreements with
their client. They felt that this arrangement would place them in an invidious
position and would clash with their duty to render advice to their client.
Telkom’s counsel, Mr Unterhalter, insisted that such undertakings be provided
if Messrs Kuper and Bhana were to read the agreements. Mr Kuper said that
if Telkom’s requirement was upheld, he and Mr Bhana would not make the
undertakings and would be forced to withdraw from the hearing while the
contents of the agreements were under consideration.
This issue was debated for some time. The Tribunal made it clear that it would
prefer to have Messrs Kuper and Bhana present throughout the hearing, and
prefer to have Messrs Kuper and Bhana present throughout the hearing, and
also made it clear that it expected Mr Unterhalter to take the Tribunal through
an analysis of the agreements in order to point out why Telkom considered
them to be confidential.
At the point when the contents of the agreement were about to be considered
in this context, Mr Kuper announced that he and Mr Bhana had reconsidered
the matter and were now prepared to make the undertakings which Telkom
had insisted upon. Mr Unterhalter accepted their oral undertakings on behalf
of Telkom. The hearing then proceeded on the basis that Orion’s counsel and
attorneys, but not directors or other officials of Orion, nor any members of the
public, would be present while Telkom’s counsel made his analysis of the
agreements and submissions regarding them. Representatives of Standard
Bank and Edcon remained in the hearing room, or were admitted to it, only
while the agreements applicable to their respective companies were under
discussion.
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Mr Unterhalter announced that Telkom was revising its position on the
contents of the agreements and would now not claim any confidentiality in the
body of the agreements. The only confidentiality which Telkom would now
claim lay in certain numerical data in an annexure to each of the agreements.
He handed in copies of the annexures in which these data had been blocked
out. He conceded that, in regard to one item of blockedout data, namely the
dates of commencement of the agreements, there was no confidentiality, but
he persisted with the confidentiality claims in respect of the remaining
blockedout data. He asserted that the agreements represented the outcome
of commercial negotiations that differed from customer to customer and led to
different outcomes and hence different data.
The subject of discounts in an industry such as telecommunications in South
Africa was, he said, inherently nontransparent. Tariffs might be set by a
regulatory body, specifying maximum charges, but, he asserted, this did not
oblige Telkom to disclose the nature and magnitude of discounts from those
maxima which it might give to any of its customers. Any discounts given in
such an industry must be regarded, he contended, as confidential. The
“particular economic value” associated with this information, within the
definition of confidential information in the Act, lay in the fact that the data
reflected specially negotiated regimes with particular customers, achieving a
competitive advantage which enabled Telkom to procure the customer at the
expense of a competitor. The information was the basis on which a participant
in the industry such as Telkom secured business in a competitive market.
Pricesensitive negotiations, said Mr Unterhalter, are specifically held in
confidence for the purpose of determining the level at which a participant is
willing to make an offering to induce a customer to switch suppliers. Once this
willing to make an offering to induce a customer to switch suppliers. Once this
information is made known, it offers all other participants the opportunity to
enter the picture and undercut the incumbent. Its value was ultimately that
“you win the business, nothing more and nothing less.” There was nothing to
prevent Orion, once it knew this “base price” from approaching Standard Bank
and Edcon and soliciting their business by offering them suitably pitched
alternative offerings. The same would apply to other competitors of Telkom
such as Nashua, Autopage, MTel and Vodacom, which had a collective
turnover of about R1.2 billion and hence represented a real competitive threat
to Telkom.
Mr Unterhalter emphasised that the data in the two agreements were to some
extent different, reflecting the different sizes of the periodical payments made
by Standard Bank and Edcon for Telkom’s telephone services, and also the
giveandtake of the negotiations. He asserted that the allegedly confidential
information “belonged” (in the phraseology of the definition in s. 1 of the Act)
to both Telkom and its customer, Standard Bank or Edcon. He rejected the
suggestion put to him by the Tribunal that there is little inherent confidentiality
in the size of a firm’s telephone account or, if there is such confidentiality, that
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it belongs solely to the customer and not to Telkom. He claimed that
information regarding the volume of business transacted with Telkom by
Standard Bank and Edcon, and the projections for future volume set out in the
agreements, had been “procured” or calculated by Telkom, and was “vital” to
Telkom’s assessment of these customers’ businesses and the way in which
Telkom had structured its own business.
He referred to several High Court decisions in the field of delictual unlawful
competition and other fields in which information had been found to be
confidential.
Apart from asserting the confidentiality of the information in contention, Mr
Unterhalter went on to allege that Orion had in effect mistaken its remedy, and
that it should have called upon Telkom to make the contested information
available to an independent expert, such as an accountant, acting on Orion’s
behalf, who could have entered into a confidentiality undertaking with Telkom
to use the information for the purposes of the main application and for no
other purpose. The expert would be entitled to share the information with legal
representatives of Orion who had made similar undertakings. This procedure,
he asserted, would have been acceptable to Telkom and would have made it
unnecessary for Orion’s directors and other personnel to have access to the
relevant information at any stage. The experts and Orion’s legal
representatives could between them have drawn up such papers as were
necessary for Orion’s case.
Orion had failed entirely, Mr Unterhalter contended, to provide evidence in its
founding papers in the main application about predatory pricing. Even if Orion
were permitted access to the agreements with Standard Bank and Edcon, that
would not enable Orion to cure the lack of crucial information in the main
application since the agreements would not disclose to Orion any information
about Telkom’s cost structures and, in particular, its average variable costs.
about Telkom’s cost structures and, in particular, its average variable costs.
Without setting out this information and demonstrating its relationship to
Telkom’s charges to its customers, Orion would, he asserted, be unable to
make out a case of predation.
Had Orion taken the route of requesting access to the agreements by an
independent expert on the basis outlined above, Orion could have awaited the
expert’s reports after scrutinising the agreements, and her or his
recommendations on how to proceed with Orion’s case. Only if the expert was
“stumped” and found it essential to exchange ideas with Orion’s officials,
would it have been permissible and timely to bring an application to the
Tribunal seeking leave for Orion’s officials to have access to the agreements.
This, he contended, would have been the logical route for Orion to follow after
there had been compliance with the rules set out in the Unilever decision.
Telkom accepted that to date there had been compliance with those rules.
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Referring to the Tribunal’s rules 21 and 28, Mr Unterhalter contended that the
production application and the s 45 application were premature. Orion should,
he asserted, have completed its evidence in the main application and then
ensured that a prehearing conference was held in terms of the Tribunal’s
rules at which to press for access to the agreements in contention on the
basis of the presiding Tribunal member’s powers to grant discovery. Until
then, its case was “unripe”. In motion proceedings, in the absence of
exceptional circumstances, he contended, the kind of discovery sought by
Orion was not permissible since its goal was to enable Orion to make out its
original case. That case should have been made out in Orion’s founding
papers. If Orion were now permitted access to the agreements, the evidential
basis for its case would emerge only in its replying affidavits, and the courts
had become irritated with this trend and had “declared war” on “unnecessarily
prolix” replying affidavits. He referred in this regard to the case of Minister of
Environmental Affairs and Tourism and Others v Phambili Fisheries
(Pty) Ltd and Another [2003] 2 All S.A. 616 (SCA) at 641 para. 80.
Mr Kuper’s approach, on behalf of Orion, was that Telkom was unjustifiably
resisting access to its agreements with Standard Bank and Edcon and then, in
the name of confidentiality, making a virtue of that denial of access. In its
evidence Telkom steadfastly averred that Orion was a “pirate” and was
operating illegally – a contention which was under debate in the High Court
proceedings and in which the first round of the litigation had gone in favour of
Orion.
The documents to which Orion requested access could now be limited, Mr
Kuper said, to Telkom’s signed agreements with Standard Bank and Edcon
since it had emerged that signed agreements were now in existence.
Telkom’s argument about the alleged prematurity of the production application
Telkom’s argument about the alleged prematurity of the production application
and the section 45 application was denied by Mr Kuper. It would be
“purposeless” for Orion to file replying evidence in the main application
without having inspected the agreements in contention, and only then pick up
the cudgels to obtain access to those documents.
Telkom’s original stance, as set out in its affidavits, that only Orion’s legal
representatives, and not any officials of Orion, should have access to the
agreements, and that the case should be completed and heard by the
Tribunal on that basis, would, Mr Kuper submitted, be “a travesty of a right to
fair process.”
The proposition advanced on behalf of Telkom at the hearing that Orion had
mistakenly sought access on its own behalf to the agreement, instead of
access by an independent expert, was untenable, Mr Kuper argued. What
would be the position if it emerged that the only true experts were officials o f
Orion or of another competitor of Telkom? It was possible that the
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complexities of determining average variable costs of Telkom and other
necessary features of Orion’s case of predation would be above the capacity
of an ordinary accountant or similar witness as had been posited by Telkom,
and Orion would then again be unable to present its case properly.
In the circumstances where Orion’s attorneys had been permitted by Telkom
to read the agreements but not take copies or extracts, nor to discuss the
contents with Orion’s officials, it would be impossible for those legal
representatives to give meaningful advice to Orion. They would be hamstrung
at every turn by their obligations of confidentiality when it came to the practical
business of preparing evidence. This would lead to a denial to Orion of its
constitutional and other rights to fair process.
In regard to the position of Standard Bank and Edcon in the litigation, Mr
Kuper considered that it was clear that they were not seeking to impose any
rights in regard to the allegedly confidential information in their agreements
with Telkom, and it could be inferred that they did not attach significant
importance to that information, being content to abide by any ruling the
Tribunal saw fit to make.
The concessions made by Telkom at the hearing about the extent of the
confidential information, by limiting its claims to the blockedout numerals in
the annexures, was so large a backdown on its original stance, that Orion was
now, at the eleventh hour, dealing with an entirely different case from the one
which had confronted it at the outset, Mr Kuper said. Had this been Telkom’s
stance originally, Orion’s evidence in the matter would have been very
different.
Mr Kuper considered that the case for claiming confidentiality in the blocked
out dat a referred to above had been overstated by Telkom, but he was not
averse to some restrictions on access to that information if the Tribunal found
confidentiality to exist, provided Orion was left free to pursue its case
confidentiality to exist, provided Orion was left free to pursue its case
effectively and make use of the advice of the best consultants available to it,
whether inside or outside its organsation. He contended that such restrictions
would be easy for Telkom to monitor or “police”. He submitted that precedents
about the nature of confidential information from the realms of delictual
unlawful competition and other branches of the law outside the ambit of the
Act were inapplicable in view of the very precise definition of confidential
information in the Act, and he emphasised that the test of confidentiality
involved not only “economic value” but the more stringent criterion of
“particular economic value”.
Tribunal’s approach to the issue of confidentiality and its rulings on that
issue
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The Tribunal considers that the panel dealing with the main application will,
after hearing what will be extensive evidence about the nature and
commercial importance of the various elements of the discount “packages”
provided by Telkom to Standard Bank and Edcon in terms of the agreements
in contention, be in a better position than the current panel to make a final and
definitive statement about the correctness of Telkom’s claims to the
confidentiality of the blockedout data in the annexures to the agreements
handed in at the hearing.
Accordingly the Tribunal at this stage made only an interim finding and ruling,
which it considers will conveniently reconcile the interests of the parties while
meeting the needs of equity and fairness.
Thus, for this limited purpose, the Tribunal’s order provides that the only
information which Telkom ultimately claimed as confidential, namely the
blockedout data in the annexures to its agreements with Standard Bank and
Edcon (excluding dates of commencement) is provisionally to be treated as
confidential.
This ruling should not be taken as an indication of sympathy on the Tribunal’s
part with the arguments advanced by Telkom for such confidentiality. On the
contrary, we consider that the matter will best be considered afresh and with
an open mind when the main application is heard.
While this ruling is to some extent adverse to Orion, which argued that the
information in question was not confidential, we consider that the potential
harm to Orion if it is ultimately found by the Tribunal that the blockedout
information is not confidential, is fully mitigated by our order on the question of
access to the information in the interim. Orion has in any case succeeded in
having the ambit of the confidentiality reduced, from Telkom’s original claims
to the whole of the agreements, to a few numerical parameters in the
annexures.
Equally, if the Tribunal finally concludes, having heard the main application,
annexures.
Equally, if the Tribunal finally concludes, having heard the main application,
that Telkom’s claim to confidentiality is sound, our order on the issue of
confidentiality will have preserved Telkom’s rights up to that point except in
the limited manner explained in the next section of this decision.
Conclusions and rulings on the issue of access to information which is
to be treated as confidential
What is clear to us is that basic justice will not be served if Orion is not
enabled to study the blockedout data in the agreements in issue, using its
own directors and other personnel if they are the people best able to advise it,
and also using any independent external experts if their evidence should
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prove necessary.
Orion has presented a case which, if it is upheld when the main application is
decided, will mean that Telkom has committed a serious contravention of the
Act. We have heard and read nothing to suggest that Orion is making its
accusations frivolously or speculatively. Its evidence on the financial details of
the allegations of predation is indeed sketchy, but in the face of the kind of
opposition which Telkom mounted in the applications before us, conceding
access to the body of the agreements only at the eleventh hour, it is clear that
Telkom has made strenuous efforts to prevent Orion from finding the kind of
information it would have needed to mount a fully documented case at the
outset. We say so while not prejudging the main application in any way. If
Telkom is correct and the case Orion has brought on its papers in the main
application is defective and is not cured in Orion’s replying evidence, then
Orion must at that stage suffer the consequences. We are only concerned
with the interim issue of access to documents.
The argument which Telkom has now for the first time advanced, that Orion
should have nominated an independent expert to inspect the agreements in
contention but not reveal their contents to Orion, and then to conduct the case
for Orion with legal representatives of Orion similarly equipped with
information about the agreements which they are not entitled to disclose to
their client, has in our view been successfully demolished by Mr Kuper. It is
Kafkaesque in its distance from fairness and openness.
In any case, if Telkom was willing to subject its agreement to scrutiny by an
independent expert acting for Orion, why has this willingness emerged only on
the date of the hearing and at the stage of argument? Why was the sanctity of
the entire contents of the agreements claimed by Telkom in its Form CC7 but
abandoned in respect of all but a few items of numerical data at the very last
abandoned in respect of all but a few items of numerical data at the very last
moment, namely when Telkom had to address oral argument to the Tribunal
on its claims to that confidentiality? These facts suggest to us that there might
be some substance in Orion’s arguments that Telkom is obfuscating the
issues of access to information, with obvious benefits to itself in terms of delay
and corresponding inconvenience and even danger to the viability of Orion.
We make no finding in this regard.
Similar considerations apply to Telkom’s arguments that Orion’s applications
are premature, and that the appropriate time to seek access to the
agreements would have been after Orion had filed its replying evidence and
could use rules 22 and 28 of the Tribunal’s rules to seek a ruling at a pre
hearing conference giving it discovery of the agreements. It takes little
imagination to see that at that stage Telkom would plausibly have argued that
discovery was irrelevant and should not be granted because Orion’s evidence
had been completed. The threat to Orion’s prospects at that stage of
mounting a successful case of predation based on the contents of the
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agreements would be terminal.
We do not consider it necessary to venture any conclusion regarding
Telkom’s allegations that it has no case to meet in the main application on the
basis of lack of relevant averments and defective evidence by Orion, and the
argument that Orion should not be allowed to make out its case in its replying
evidence. If Telkom is correct about these allegations, it will have its way
when the main application is decided.
Mr Kuper was quick to point out that it would have been easy for Telkom, if
there was no targeting of Orion and no illegal deep discounting, to produce
evidence to say that its discount packages had been provided to customers
other than those it had in common with Orion and that the depth of the
discounts was such that nobody could regard them as predatory. We have not
taken any such factors into account in reaching our conclusions since they are
relevant to the main application and not to the interlocutory applications
before us.
It would, of course, be wholly unacceptable for the Tribunal to fail to come to
the assistance of a firm which is the victim of true predatory pricing practices
by paying excessive regard to claims for confidentiality in any documents, let
alone the very documents which form the basis for the complaint of predation.
If it allows itself to be mesmerised by claims of confidentiality in those
circumstances, the Tribunal would be delaying remedies and providing
mechanisms for the predator to cover it traces, and it would effectively be
playing the role of an accomplice. This consideration is relevant in this case,
but the Tribunal has balanced it by giving careful attention to Telkom’s
interests at this stage and to the need to refrain from prejudging the merits of
the main application.
The order we have made provides for Orion’s personnel and legal
representatives, and any outside experts which Orion selects, to have access
representatives, and any outside experts which Orion selects, to have access
to the data to which Telkom claims confidentiality, but on strict terms. These
include the terms that the individuals concerned make written undertakings of
confidentiality, and that they use the information only for the purposes of the
main application and any further interlocutory litigation which may be
necessary in the course of bringing the main application to finality. Telkom is
to be provided with the names of all the individuals concerned. We consider
that the strictness of these terms is adequate for the protection of Telkom’s
interests.
The order also provides that if Orion or other firms having an interest in the
subjectmatter choose to approach the Tribunal to obtain less onerous
conditions for access to the allegedly confidential information, they may do so.
We see no need for Telkom to have a reciprocal right to approach the
Tribunal for a variation which sets more onerous terms: once the existing
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terms have been exercised by Orion, it would be inequitable or in practice
impossible to reduce its corresponding rights.
Orion’s attorneys are, on the evidence, subject to written undertakings of
confidentiality in favour of Telkom which were drawn and imposed by Telkom
and which prohibit the attorneys from disclosing the contents of those
agreements to Orion and its officials, its counsel, and Orion’s outside
witnesses and consultants. It would be inconsistent for these undertakings to
be maintained in the face of our order. Our order therefore includes provision
for those undertakings to be superseded by the confidentiality regime set out
in the order, which will naturally bind the same attorneys.
The information to which the order extends includes paragraph 17 of Telkom’s
answering affidavit in the section 45 application. Our reading of that
paragraph suggests to us that nothing in it is truly confidential, but in the
absence of the parties’ submissions on it we have in Telkom’s favour
assumed that confidentiality may exist. Orion’s interest in that information is
safeguarded by the access which our order provides, but the access is
subject to limitations. We doubt whether Orion will in practice suffer any
deprivation by viewing the relevant paragraph subject to this regimen.
We have made a single order since it appears to us that the relief in both
applications should be identical, even if the basis for granting it may be
formally different. If the production application alone had been heard, we
consider that we could by the exercise of our residual powers under section
27 of the Act, if not under the Tribunal’s statutory powers to direct discovery,
have made the relevant order. Telkom’s argument that that the production
application was premature is in our view, as mentioned above, incorrect. S.
45(1) (b) of the Act provides the basis for our findings and orders to the extent
that they correspond to Orion’s claims in the s. 45 application.
Costs
that they correspond to Orion’s claims in the s. 45 application.
Costs
As Orion has substantially succeeded in both applications, our order provides
that Telkom should pay Orion’s costs, including those of three legal
representatives.
24 February 2004
M. Moerane Date
Concurring: L. Reyburn, T. Orleyn
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