Expert testimony in alleged case of excessive pricing

The concept of excessive pricing and how competition authorities should treat this prohibition has been the subject of much debate worldwide. The seminal Sasol Polymers excessive-pricing case has since set precedent as to how future claims of excessive pricing will be assessed in South Africa, and is likely to also shape the approach of other competition authorities across Africa. In this matter, Genesis was commissioned to provide an in-depth economic assessment of whether Sasol’s polypropylene export prices were likely to represent a valid comparator to the domestic prices that were alleged to be excessive.

Central to this analysis was the question as to whether an investment in an export facility could be taken as a reliable indication that export prices were a reflection of economic value (and therefore a reasonable benchmark against which excessive prices could be evaluated). Combining our deep understanding of Sasol’s business, with a meticulous evaluation of Sasol’s investment decisions and financial position, Genesis was able to offer an assessment which showed that export prices in this matter did not necessarily represent a reasonable benchmark to evaluate excessive prices.

Neither the Tribunal nor the Competition Appeal Court disputed the independent economic analysis offered by Genesis Analytics. The Competition Appeal Court ultimately overturned an initial finding of excessive pricing against Sasol made by the Competition Tribunal.