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South African Commercial Catering & Allied Workers Union v. Wal-Mart Stores, Inc.

South Africa Competition Appeal Court
111/CAC/Jun11 (March 9, 2012)


Facts

Wal-Mart Stores, Inc. (Wal-Mart) (defendant), the largest retailer in the world, wanted to acquire Massmart Holdings Limited (Massmart), a South African retailer, to enter the South African market. The Competition Commission, the body tasked with investigating potential mergers, found no issues and recommended that the Competition Tribunal approve the merger. Several unions and small-business organizations opposed the merger, and Wal-Mart voluntarily agreed to three conditions meant to protect the public interest. Wal-Mart agreed to not lay off any workers for merger-related reasons for two years and to give preference in hiring to workers who had been laid off by Massmart before the merger took place. Wal-Mart also agreed to recognize existing collective-bargaining rights enjoyed by union workers and to not challenge the status of the South African Commercial Catering and Allied Workers Union (SACCAWU) (plaintiff) as the dominant representative of its workers for three years. Finally, Wal-Mart agreed to some form of investment in local manufacturers to address a fear that it would rely on its global purchasing power to import goods, harming the local manufacturers that had supplied goods to Massmart. Considering the opposition, the Competition Commission reexamined the merger and found that Wal-Mart was substantially likely to lower prices for consumers but recognized potential public-interest concerns regarding the merger’s impact on employees and local procurement. The Competition Tribunal conditionally approved the merger, integrating the policies to which Wal-Mart had voluntarily agreed into the approval process. SACCAWU appealed, arguing that the consumer-welfare approach used by the competition authorities to analyze the merger violated § 12A of the South African Competition Law.

Rule of Law

Issue

Holding and Reasoning (Davis and Zondi, JJ.)

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