A decision of the Supreme Court of Appeal late last year makes it clear that the Competition Commission is entitled to use the findings of experts such as competition economists and telecommunications consultants which it has briefed, when investigating complaints and making referrals to the Competition Tribunal.

In a matter between the Competition Commission and Telkom SA Limited, Telkom alleged that the Commission had been biased when it relied heavily on an expert report obtained from the Link Centre, a research and training entity focussing on the field of information and communications technology, policy, regulation and management. The Commission adopted the recommendations from the Link Centre report almost to the letter. The Commission admitted that a number of the complainants in this complaint were financial contributors to the funding of the Link Centre and that the Link Centre's Advisory Board included a number of employees of the complainant entities.

Telkom also raised concerns about the objectivity of the Link Centre because the members of the advisory board that authored the report had previously spoken out in the press in a very strong and negative manner about Telkom's operations and, in particular, in relation some of the issues arising out of the complaints laid with the Commission.

The Court took cognisance of the fact that that a draft report was initially submitted by the Link Centre to the Commission for comment, before the final report was drafted.

Furthermore, it also took into consideration that the Link Centre received financial backing from both Government and from Vodacom, which Telkom at the time held a 50% shareholding. In fact, during the investigation period, the largest contributor of funding to the Link Centre had been Vodacom. It was further noted by the Court that the funding complained of amounted to a minor portion of the funds which were locally supplied and a minuscule amount of the total fund contribution from other foreign donors.

The Court also gave weight to the fact that the particularly critical opinions of the authors of the Link Centre report had been based on research and were not simply off-the-cuff remarks. The Commission had conducted its own investigations and obtained outside legal advice, all of which was considered before coming to its decision to refer the complaint to the Tribunal.

On this basis, the Supreme Court found that the lower court had erred in its finding that the Commission's decision to refer the matter to the Tribunal was biased. The mere fact that the Commission relied on a report prepared by this particular external consultant did not automatically mean that its decision was biased or even gives rise to a reasonable apprehension of bias. No reasonable person would reasonably conclude that the Commission was biased simply because it relied on the report.

The decision makes it clear that the Commission may obtain outside assistance from experts even where such experts have previously performed research involving the respondent in a complaint. As long as the Commission does not rubber stamp the views that it receives, and considers the content in a non-prejudicial manner, no illegality in referring a complaint based on such information will arise.

Written by: Jason van Dijk, Associate at Deneys Reitz