Competition Commission of South Africa v Bank of America Merrill Lynch International Designated Activity Company and Others

The Competition Commission prosecuted 28 banks (South African and foreign) for alleged collusion to manipulate the USD/ZAR foreign exchange rate between September 2007 and at least September 2013. The Commission alleged contravention of s 4(1)(b)(i) and (ii) of the Competition Act 89 of 1998 through price fixing and market division. The case had a protracted history: initial referral in February 2017, Tribunal decision in June 2019 dismissing certain exceptions, CAC decision in February 2020 granting the Commission a "final opportunity" to file a new referral affidavit, substituted referral filed June 2020, further Tribunal decision on exceptions and dismissal applications in March 2023. The Commission's case was based on a "single overarching conspiracy" (SOC) involving traders communicating through Bloomberg chatrooms (particularly "Old Gits" and "ZAR" chatrooms), allegedly coordinating trading activities, sharing sensitive information, and manipulating bid-offer spreads.

• Whether the Tribunal's decision was appealable (finality for purposes of s 37(1) of the Competition Act)
• Whether the 2020 CAC order permitted joinder of additional parties not originally referred to the Tribunal
• Whether holding companies could be joined as respondents when they did not trade in foreign currency
• Whether the Commission established personal jurisdiction over pure peregrini (foreign banks with no South African presence)
• Whether the Commission established subject matter jurisdiction in terms of s 3(1) of the Competition Act
• Whether the referral affidavit complied with the requirements of the 2020 CAC order
• Whether the Commission adequately pleaded a single overarching conspiracy (SOC) meeting the requirements from European jurisprudence
• Whether the referral affidavit was vague and embarrassing or disclosed a cause of action
• Whether tacit initiation was established for banks joined only in the June 2020 referral

Appeals upheld in respect of First, Fourth (in part), Fifth, Sixth, Ninth, Eleventh, Twelfth, Thirteenth, Nineteenth, Twenty-first, Twenty-fourth, Twenty-fifth, Twenty-sixth, Twenty-seventh and Twenty-eighth respondents. Appeals dismissed in respect of Second, Third, Fourteenth and Twenty-third respondents, who must file answering affidavits within 40 days. Tribunal's order of 30 March 2023 set aside and replaced. No order as to costs.

(1) Personal jurisdiction over pure peregrini in competition matters requires adequate connecting factors showing participation in a conspiracy with South African banks, beyond mere subject matter jurisdiction under s 3(1) of the Act. Occasional participation in chatrooms without meaningful links to South African participants is insufficient. (2) A "single overarching conspiracy" under competition law requires pleading: (a) a common anti-competitive objective pursued by an overall plan; (b) each firm's intentional contribution by its own conduct to common objectives; and (c) that each firm was aware of conduct planned or implemented by other participants, or could reasonably have foreseen it and was prepared to take the risk. (3) Holding companies that do not trade in the relevant market and employ no implicated individuals cannot be joined solely on the basis of owning shares in subsidiary banks. S 59(3A) does not apply retrospectively. (4) Appellate court orders granting a "final opportunity" to file a substituted referral do not permit addition of new respondents not originally referred to the Tribunal - they require reconfiguration of the existing case. (5) Tacit initiation of proceedings against additional respondents requires inference that the Commission decided to initiate a complaint against them, which cannot be established where the Commission had information about those parties but failed to include them in the original referral and amendments.

The Court made several notable observations: (1) The "interests of justice" test for appealability from UDM v Lubashe applies to competition appeals, not merely the strict Zweni test, though the SCA in TWK Agriculture Holdings unfortunately ignored this Constitutional Court authority; (2) Expedition in resolving jurisdictional disputes is particularly important given the reputational implications of cartel allegations and the prospect of extremely lengthy trials; (3) The Commission should have distinguished between information in the public domain (e.g. automated Reuters platform quotes) and evidence of actual collusion; (4) Modern technology has created conditions for a global economy transcending national borders, justifying some development of personal jurisdiction beyond traditional common law constraints, but this must be carefully circumscribed; (5) While cartel conduct is "the most egregious form of anti-competitive conduct," this does not relieve the Commission of its burden to plead cases with sufficient factual particularity; (6) The Tribunal's errors in conflating personal and subject matter jurisdiction and in making factual findings unsupported by the referral affidavit were regrettable; (7) The Commission's failure to utilize information from the US Department of Justice prosecution of key trader Jason Katz was significant; (8) The Commission should not be inhibited by threat of adverse costs when bona fide fulfilling its statutory mandate in the public interest (applying Pioneer Hi-Bred).

This judgment is significant for South African competition law as it: (1) Clarifies the requirements for establishing personal and subject matter jurisdiction over foreign banks in cartel cases; (2) Develops the common law on personal jurisdiction in the context of global electronic trading platforms while setting limits on regulatory overreach; (3) Establishes rigorous pleading standards for "single overarching conspiracy" cases, requiring clear factual links showing each respondent's participation, knowledge and intentional contribution; (4) Interprets the scope of remedial orders from appellate courts and the Commission's powers to join additional parties post-referral; (5) Applies the "interests of justice" test for appealability from UDM v Lubashe to competition appeals; (6) Clarifies that s 59(3A) (holding company liability) does not apply retrospectively and cannot be the sole basis for joinder; (7) Distinguishes between public domain information (e.g. Reuters platform quotes) and evidence of collusion; (8) Balances the importance of prosecuting cartel conduct against procedural fairness and jurisdictional limits. The judgment reinforces that ambitious cartel prosecutions require meticulous pleading of facts connecting all respondents to the alleged conspiracy.