The 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 September 2013. The Commission alleged the banks participated in a single overarching conspiracy (SOC) through communication via Bloomberg chatroom platforms (particularly "Old Gits" and "ZAR" chatrooms), fixing prices and dividing markets in contravention of section 4(1)(b)(i) and (ii) of the Competition Act 89 of 1998. The Commission initially referred the matter to the Competition Tribunal on 15 February 2017. Following exceptions and appeals, the Competition Appeal Court made an order on 28 February 2020 requiring the Commission to file a new referral affidavit addressing jurisdictional deficiencies. The Commission filed the substituted referral on 1 June 2020. The Tribunal heard exceptions and dismissal applications between 29 November and 6 December 2021, issuing its order on 30 March 2023. The respondent banks appealed against the Tribunal's dismissal of their exceptions.

• Whether the Tribunal's order was appealable under section 37(1) of the Competition Act
• Whether holding companies could be joined as respondents when they did not trade in foreign currency
• Whether new parties could be added after the matter was referred to the Tribunal
• Whether the Commission established personal jurisdiction over pure peregrini (foreign banks with no presence in South Africa)
• Whether the Commission established subject matter jurisdiction over local peregrini and incola banks
• Whether the Commission's referral affidavit complied with the Competition Appeal Court's 2020 order
• Whether the Commission adequately pleaded a single overarching conspiracy (SOC) in accordance with European jurisprudence
• Whether the referral affidavit was vague and embarrassing

Appeals upheld in respect of: Bank of America Merrill Lynch International (1st), Australia and New Zealand Banking Group (5th), Standard New York Securities Inc (6th), Nomura International PLC (9th), Credit Suisse Group (11th), Commerz Bank (12th), Macquarie Bank (13th), HSBC Bank USA (19th), Bank of America N.A. (21st), Nedbank Group Limited (24th), Nedbank Limited (25th), FirstRand Limited (26th), FirstRand Bank Limited (27th), and Standard Americas Inc (28th). Appeals dismissed for: BNP Paribas (2nd), JP Morgan Chase & Co (3rd), HSBC Bank PLC (14th), and Credit Suisse Securities LLC (23rd). The Tribunal's order of 30 March 2023 was set aside and replaced. Respondents whose appeals were dismissed must file answering affidavits within 40 days. No order as to costs.

To establish a single overarching conspiracy in competition law, the Commission must plead and prove: (1) a common anti-competitive objective pursued by all participants; (2) each firm's intentional contribution by its own conduct to that common objective; and (3) that each firm was aware (or could reasonably foresee) the conduct of other participants in pursuit of the same objective and was prepared to take that risk. Personal jurisdiction over pure peregrini in competition cases requires adequate connecting factors linking the foreign entity to South African participants in the alleged conspiracy, beyond mere effects in South Africa. Subject matter jurisdiction under section 3(1) of the Competition Act is separate from personal jurisdiction and requires showing that conduct had a direct, immediate, and substantial effect (actual or foreseeable) in South Africa. The 2020 order of the Competition Appeal Court limited the Commission to reconfiguring its referral affidavit for existing respondents and did not permit addition of new parties after referral. Holding companies cannot be joined merely because subsidiaries are implicated, absent their own participation in the prohibited conduct.

The Court made several important observations: (1) Cartel conduct is "the most egregious form of anti-competitive conduct" but prosecution must not result in "regulatory overreach." (2) The Court distinguished between information in the public domain (available on platforms like Reuters) and commercially sensitive information obtained through cartel activity - the Commission must clearly differentiate these. (3) Occasional participation in chatrooms without additional evidence linking conduct to South African banks is insufficient to establish personal jurisdiction over foreign banks. (4) The Commission should not be inhibited by costs when bona fide fulfilling its statutory mandate in the public interest (following Pioneer Hi-Bred). (5) Modern technology creating a global economy justifies development of personal jurisdiction beyond traditional common law constraints, but this development must be carefully circumscribed by evidentiary requirements. (6) The judgment expressed regret at the Tribunal's "unfortunate errors" and "uncritical" acceptance of the Commission's arguments in several respects. (7) The Court noted the Constitutional Court's Lubashe judgment (on interests of justice test for appealability) was inexplicably ignored in the Supreme Court of Appeal's TWK judgment.

This case is significant for South African competition law as it: (1) clarifies the requirements for establishing personal and subject matter jurisdiction over foreign entities in cartel cases; (2) develops the common law of personal jurisdiction in the context of a globalized digital economy; (3) establishes stringent pleading requirements for single overarching conspiracy cases, adopting European jurisprudence (Team Relocations, Anic Partecipazioni); (4) emphasizes the distinction between personal and subject matter jurisdiction under section 3(1) of the Competition Act; (5) limits the Commission's ability to add parties after referral to the Tribunal; (6) clarifies that holding companies cannot automatically be joined merely because subsidiaries are implicated; (7) confirms appealability of jurisdictional decisions under section 37(1) and applies the Constitutional Court's "interests of justice" test from UDM v Lubashe; (8) reinforces that cartel prosecutions, while serving the public interest, must meet rigorous procedural and substantive standards.