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) alleging collusion to manipulate the foreign exchange rate between the US Dollar (USD) and South African Rand (ZAR) between September 2007 and at least September 2013. The Commission alleged contraventions of section 4(1)(b)(i) and (ii) of the Competition Act 89 of 1998, namely price fixing and market division through a single overarching conspiracy (SOC). The Commission initially referred the complaint on 15 February 2017, which elicited numerous exceptions. The Tribunal's 2019 decision addressed jurisdiction issues. This Court's 2020 judgment gave the Commission a "final opportunity" to file a new referral affidavit. The Commission filed a revised referral on 1 June 2020. Respondent banks again filed exceptions and applications for dismissal. The Tribunal's decision on 30 March 2023 largely favoured the Commission, which decision was appealed. The Commission alleged traders from respondent banks participated in chatrooms (particularly "Old Gits" and "ZAR" chatrooms) on the Bloomberg messaging platform, sharing commercially sensitive information about exchange rates, bid-offer spreads, and coordinating trading strategies.

• Whether the Tribunal's decision was appealable under section 37(1) of the Competition Act
• Whether the Commission's 2020 referral affidavit complied with the 2020 Court order
• Whether holding companies that did not trade in foreign currency could be joined as respondents
• Whether parties not cited in the original referral could be added after the 2020 Court order
• Whether the Commission established personal jurisdiction over pure peregrini (foreign banks with no South African presence)
• Whether the Commission established subject matter jurisdiction under section 3(1) of the Act
• Whether the Commission adequately pleaded a single overarching conspiracy (SOC) in which all respondent banks participated
• Whether the referral affidavit was vague and embarrassing
• Whether specific respondent banks had sufficient connecting factors to South Africa to justify personal jurisdiction
• The proper test for establishing a single overarching conspiracy in competition law

The appeals against the Tribunal's decision were upheld in respect of respondents 1, 4, 5, 6, 9, 11, 12, 13, 19, 21, 24, 25, 26, 27, and 28. The appeals by respondents 2, 3, 14, and 23 were dismissed. The Tribunal's order was set aside and replaced. Those respondents whose appeals were dismissed (2, 3, 14, 23) were ordered to file answering affidavits within 40 days. There was no order as to costs, applying the principle from Pioneer Hi-Bred that the Commission should not be inhibited by costs awards when bona fide fulfilling its statutory mandate in the public interest.

1. Personal jurisdiction over pure peregrini in competition cases requires adequate connecting factors showing participation in a conspiracy with South African entities, not merely that the conduct affected South Africa (which relates to subject matter jurisdiction under section 3(1)). 2. Personal jurisdiction and subject matter jurisdiction are distinct requirements that must not be conflated; both must be established for pure peregrini. 3. To establish a single overarching conspiracy, the Commission must plead: (a) a common anti-competitive objective (an overall plan pursuing a common economic objective); (b) each firm's intentional contribution by its own conduct to the common objectives; and (c) that each firm was aware of the actual conduct planned or put into effect, or could reasonably have foreseen it and was prepared to take the risk. 4. Holding companies cannot be joined as respondents merely because they own subsidiaries alleged to have participated in prohibited conduct, absent statutory provision (and section 59(3)(A) does not apply retrospectively). 5. The Commission cannot add new respondents after a matter has been referred to the Tribunal; the 2020 Court order envisaged reconfiguring the existing referral affidavit, not bringing new parties into the proceedings. 6. Appeals from the Competition Tribunal are governed by section 37(1) of the Competition Act, but the test for appealability includes "interests of justice" considerations following UDM v Lubashe, not merely the strict Zweni finality test. 7. Exceptions going to jurisdiction are appealable as they constitute final decisions on a discrete issue.

The Court observed that cartel conduct is "the most egregious form of anti-competitive conduct" but emphasized the need to balance enforcement against potential regulatory overreach. The Court noted with regret the "long and torturous history" of the litigation and that the Tribunal's reasons for its 2023 order were only issued after significant delay (heard November-December 2021, order issued March 2023). The Court commented that had all respondent banks proceeded to trial, "the length thereof will break all South African jurisprudential records." The Court noted the significance of Jason Katz's guilty plea in the US Department of Justice proceedings and suggested the Commission should have had access to substantial evidence from those proceedings. The Court observed that occasional participation in a chatroom without additional evidence linking conduct to South African banks is insufficient to establish the requisite connecting factors for personal jurisdiction. The Court distinguished between information available on public platforms (like Reuters information platform, which is "akin to Bloomberg" as a news outlet with automated feeds) and commercially sensitive information exchanged privately. The Court commented that between 2007-2013, daily trades in the South African domestic forex market increased from USD10.7b to USD18b, while the largest single transaction pleaded was only USD25m, suggesting the material effect on the Rand may be a matter for evidence at trial.

This case is significant for South African competition law as it: (1) clarifies the requirements for establishing a single overarching conspiracy in cartel cases, adopting principles from European jurisprudence (Team Relocations, HSBC Holdings); (2) develops the common law on personal jurisdiction in competition cases involving foreign entities, building on the CAC's 2020 judgment; (3) establishes that personal jurisdiction and subject matter jurisdiction under section 3(1) of the Competition Act are distinct requirements that must not be conflated; (4) confirms that holding companies cannot be joined merely because subsidiaries are alleged participants in prohibited conduct, absent section 59(3)(A) application; (5) clarifies that the Commission cannot add new respondents after a matter has been referred to the Tribunal, distinguishing between adding parties to a complaint (permissible before referral) and adding parties to proceedings (impermissible after referral); (6) applies the Constitutional Court's Lubashe decision on appealability, incorporating the "interests of justice" test; (7) emphasizes the distinction between information in the public domain (e.g., on Reuters platform) and commercially sensitive information in assessing cartel conduct; (8) sets high evidentiary standards for pleading SOCs, particularly regarding connecting factors for personal jurisdiction over foreign entities; and (9) reaffirms that while cartel conduct is the most egregious form of anti-competitive behavior, the Commission must meet rigorous pleading standards to prosecute such cases.