Capital Newspapers Proprietary Limited and Another v Media24 Holdings Limited and Others

Capital Newspapers (Pty) Ltd and Caxton & CTP Publishers & Printers Limited (the applicants) sought to review and set aside the Competition Commission's decision approving a merger between Novus Holdings and certain Media24 assets. The merger involved the sale of Media24's distribution business (On the Dot), 20 community newspapers, and two football publications to Novus entities. Media24 had separately decided to migrate certain of its newspaper titles (Beeld, Rapport, City Press, Daily Sun) from print to digital format (the "migration decision"). The applicants contended that the migration decision and the sale of assets formed a composite plan that should have been investigated as part of the merger. They argued the closure of print titles would lead to increased distribution costs for remaining publishers, harm competition, threaten media diversity, and infringe constitutional rights to freedom of expression and press freedom. The Commission approved the merger on 30 October 2024 subject to conditions regarding employment and non-bundling of services. Part A of the application (seeking an interdict) had already been dismissed with costs.

• Whether the Commission's merger jurisdiction extended to Media24's migration decision to convert print titles to digital
• Whether the migration decision was part of a composite plan that should have been notified to and investigated by the Commission as part of the merger
• Whether the Commission misunderstood the scope of its investigative powers under the Competition Act
• Whether the Commission applied the correct counterfactual analysis
• Whether the Commission failed to consider relevant evidence from third parties
• Whether the Commission's decision to approve the merger was unconstitutional, unlawful, and invalid
• Whether non-disclosure of the Transitional Services Agreement (TSA) vitiated the merger approval
• Whether the merger threatened constitutional rights to freedom of expression and press freedom

Part B of the application dismissed with costs, including costs of three counsel where so employed, on a party-and-party scale (punitive costs were refused).

A merger as defined in section 12 of the Competition Act requires a change of control over the whole or part of a business. A unilateral commercial decision that does not involve acquisition or loss of control (such as migrating print publications to digital format) does not constitute a merger and falls outside the Competition Commission's merger jurisdiction, even if contemporaneous with a notified merger. Whether a business decision is sufficiently closely related to a merger to fall within merger jurisdiction is determined by causation: applying a "but for" test, if the decision would have occurred regardless of the merger due to independent market conditions, it is not merger-specific and need not be investigated as part of the merger. Findings made in interlocutory proceedings that are final in effect and dispositive of issues are res judicata and binding in subsequent proceedings between the same parties. Counterfactual analysis in merger review cannot be used to compel private firms to accept particular offers or transact with particular parties; the Commission's role is to assess competition and public interest impacts, not to determine which purchaser a seller should prefer. The lawfulness and rationality of an administrative decision is assessed at the time the decision is made; subsequent events cannot retrospectively render a lawful decision unlawful. Substitution relief under PAJA section 8(1)(c)(ii)(aa) is exceptional and only available where the administrative action has been set aside and exceptional circumstances exist.

The Court noted that in the digital age, change is accelerating and inevitable, and it is the dynamic character of the market that created the impetus for the migration decision and the continuing decline of print media. The Court observed that 96% of news consumers access news via digital means and only 4% via print, suggesting that even total foreclosure of print media would only affect 4% of consumers, making claims about digital shift signaling the end of media freedom "grossly overstated." The Court emphasized that courts must be cautious not to usurp the functions of the Competition Commission and should show appropriate deference to its specialized expertise, particularly in polycentric decisions involving economic and policy considerations. The Court noted that the Competition Commission has ongoing oversight obligations post-merger approval under section 15(1) of the Act, including power to revoke approval if it was based on incorrect information, obtained by deceit, or conditions are breached. The Court commented that citing cases as support where the factual matrix is palpably different is unhelpful. The Court observed that attorney and client costs are rarely granted, are exceptional, and intended to be punitive and indicative of extreme opprobrium - mere frustration with an opponent's litigation conduct does not warrant such an award.

This judgment clarifies the scope of the Competition Commission's merger jurisdiction under the Competition Act. It confirms that a merger requires a change of control over a business or assets, and that unilateral commercial decisions (such as business model changes or closures) that do not involve acquisition or loss of control fall outside merger jurisdiction, even if they occur contemporaneously with a notified merger. The judgment applies principles of causation from Coca-Cola Beverages Africa in the merger context, emphasizing that not every change post-merger is attributable to the merger - a "but for" causation test must be satisfied. The case demonstrates judicial deference to the Competition Commission's specialized expertise and factfinding in merger analysis, consistent with Bato Star and Mediclinic principles. It confirms that counterfactual analysis in merger review cannot compel private firms to accept particular offers or enter into transactions not of their choosing (following Pioneer Hi-bred). The judgment also illustrates the doctrine of res judicata applying to determinations made in interlocutory proceedings where those determinations were final in effect. It confirms that substitution relief under PAJA section 8(1)(c)(ii)(aa) remains exceptional and is only available where administrative action has been set aside and exceptional circumstances exist. The case addresses how competition law interfaces with constitutional rights (freedom of expression and media freedom), confirming that such considerations must be grounded in the actual merger transaction, not separate business decisions outside the merger.