Competition Commission vs Netstar and others

In what has become a landmark case, Genesis was retained by a number of vehicle-tracking companies to provide an independent economic analysis of the allegation that a standard set for the vehicle-tracking industry and its adoption by insurers had the effect of raising barriers to new entrants. This was the first product standard case in South Africa and raised a host of complex legal and economic issues.

On the back of extensive research into USA and EU case law, Genesis tackled the issue from three major angles. The first was an analysis of whether the standard was developed in conjunction with, and on the instruction of, the insurance firms themselves. This is because, in economic theory, customers are unlikely to agree to a standard which would harm themselves. 

Second, Genesis sought to understand how widely the standard was adopted by insurance companies at the time, and therefore whether new entrants could gain traction with some insurers, even if not all. 

Finally, Genesis spent considerable effort in building evidence as to whether any potential entrant was ready for entry during the period the standard was in place and therefore whether it had the actual effect of preventing entry.

This analysis contributed to the eventual finding by the Competition Appeal Court that the case against the vehicle-tracking companies lacked merit. Genesis’ work also helped the court establish an important legal principle in assessing these types of cases, namely that the effect cannot be hypothetical where a specific allegation is made by a litigant. Rather, in those cases the court found there was a need to demonstrate an actual effect.