Babelegi Workwear and Industrial Supplies CC v The Competition Commission of South Africa

Babelegi Workwear and Industrial Supplies CC sold industrial supplies including FFP1 face masks. During the early stages of the Covid-19 pandemic, between 31 January and 5 March 2020, Babelegi dramatically increased the prices and mark-ups on face masks, achieving mark-ups ranging from 122% to over 1100%, despite supplier cost increases only materialising later in March 2020. Complaints were lodged with the Competition Commission by customers. The Commission investigated and referred a complaint to the Competition Tribunal, alleging that Babelegi, as a dominant firm, charged excessive prices in contravention of section 8(1)(a) of the Competition Act 89 of 1998. The Tribunal found Babelegi guilty of excessive pricing and imposed an administrative penalty of R76,040. Babelegi appealed to the Competition Appeal Court.

The appeal was upheld and the Competition Tribunal’s finding of contravention of section 8(1)(a), as well as the administrative penalty imposed on Babelegi, was set aside.

This case is the first appellate decision interpreting excessive pricing under section 8 of the Competition Act following the 2019 amendments and in the context of Covid-19 price gouging. It affirms that competition authorities must still prove dominance and market power in accordance with sections 7 and 8, even during national crises, and cannot rely solely on high prices as evidence of market power. The judgment provides important guidance on the limits of competition law intervention in emergency pricing situations.