NO PLAGIARISM
LML4802 May/June
Exam Memo | Due
29 May 2025
NO PLAGIARISM
[Year]
,Exam (elaborations)
LML4802 May/June Exam Memo | Due 29
May 2025
.Course
The Law of Competition and Trademarks (LML4802)
Institution
University Of South Africa (Unisa)
LML4802 May/June Exam Memo | Due 29 May 2025. All questions fully
answered with referencing. SECTION A: COMPETITION LAW SECTION A1:
PUBLIC COMPETITION LAW
QUESTION 1 1.1 Starlink is a US-based company wholly owned by SpaceX
and is a provider of satellite internet services. Starlink has operations in over
100 countries and has been eager to enter the South African market without
success. In an effort to comply with South African laws in relation to
shareholding and the composition of ownership of a telecommunications
company, Starlink initiated a move to acquire 70% of Vodacom Ltd. This will
enable Starlink to enter the South African market if all formalities and legal
requirements are complied with. Conduct focused research on the
companies guided by various provisions of merger control and the market in
which they operate. Thereafter, identify and classify the type of merger,
apply the relevant factors considered for evaluation of the merger, and, as
the competition commission, make a recommendation in relation to the
merger. You must not discuss the procedure and notification provisions of
the merger regulations. (10)
As the South African Competition Commission, I would analyze the proposed acquisition of
70% of Vodacom Ltd. by Starlink, a wholly owned subsidiary of SpaceX, with a critical eye,
focusing on its potential impact on competition and public interest in the South African
telecommunications market.
Market Definition
To adequately assess the merger, it's crucial to define the relevant markets in which Starlink and
Vodacom operate.
Starlink: Primarily operates in the satellite internet services market, offering high-
speed, low-latency broadband via its Low Earth Orbit (LEO) satellite constellation. Its
key differentiator is its ability to provide connectivity in remote or underserved areas
where traditional terrestrial infrastructure is limited. While it currently offers direct-to-
, consumer internet, its "Direct to Cell" technology indicates a potential future expansion
into mobile cellular services.
Vodacom Ltd.: A dominant player in the South African telecommunications sector,
operating across various segments:
o Mobile Telephony Services: Voice, messaging, and data services to consumers
(43.8% market share as of Dec 2023).
o Fixed-Line Connectivity Services: Fibre (Fibre-to-the-Home, Fibre-to-the-
Business) and other fixed internet services.
o Business Solutions: Provides a range of services including IoT, cloud hosting,
managed services, and security to enterprises and government.
o Financial Services: Through platforms like M-Pesa and VodaPay.
Given the nature of Starlink's satellite internet offering and Vodacom's extensive mobile and
fixed-line operations, the relevant market for this merger would primarily be the broadband
internet services market in South Africa, encompassing both fixed and mobile broadband, and
specifically considering the potential for satellite broadband to substitute or complement existing
services.
Type of Merger
The proposed acquisition of 70% of Vodacom by Starlink constitutes a horizontal merger with
vertical elements.
Horizontal aspects: While Starlink is a satellite internet provider and Vodacom is
primarily a terrestrial mobile and fixed-line provider, both operate within the broader
broadband internet services market. Starlink's offering can be seen as a direct competitor
or substitute for certain segments of Vodacom's internet services, particularly in areas
with limited terrestrial infrastructure. Furthermore, Starlink's future "Direct to Cell"
capabilities suggest a potential direct horizontal overlap in the mobile services market.
Vertical aspects: This merger presents significant vertical integration. Starlink is a
provider of satellite internet technology (an input), and Vodacom is a significant
distributor and retailer of telecommunication services to end-users. The acquisition would
allow Starlink to leverage Vodacom's extensive distribution network, customer base, and
existing infrastructure. Conversely, Vodacom would gain access to Starlink's satellite
technology.
Relevant Factors Considered for Evaluation
As the Competition Commission, the evaluation of this merger would consider the following
factors as per the Competition Act, with a strong emphasis on both competition and public
interest:
1. Effects on Competition:
Market Structure and Concentration:
, o Vodacom already holds a substantial market share in South African mobile
services (43.8%). The merger with Starlink, a global player with advanced
technology, could significantly increase concentration in the overall broadband
market.
o The South African telecommunications market is characterized by a few dominant
players (Vodacom, MTN, Telkom, Cell C). This merger could further entrench
the market power of the merged entity, potentially leading to less competition.
Barriers to Entry/Expansion:
o Starlink's entry into South Africa has faced regulatory hurdles, partly due to local
ownership requirements and resistance from existing operators. The acquisition of
Vodacom would bypass these entry barriers for Starlink, but simultaneously raise
new barriers for other potential new entrants in the satellite internet space.
o The combined financial and technological prowess of the merged entity could
make it exceedingly difficult for smaller or new players to compete, especially in
the provision of advanced connectivity solutions.
Input and Customer Foreclosure:
o Input Foreclosure: If Starlink's technology becomes a crucial input for advanced
broadband services, the merged entity could potentially deny or restrict access to
this technology for Vodacom's competitors, or offer it on discriminatory terms.
o Customer Foreclosure: If Vodacom's extensive customer base primarily utilizes
Starlink's satellite services post-merger, it could effectively foreclose other
satellite internet providers from reaching these customers through Vodacom's
channels.
Bundling and Tying: The merged entity could have an incentive and ability to bundle
satellite internet services with Vodacom's mobile and fixed-line offerings, making it
harder for single-product competitors to attract customers.
Innovation and Dynamic Competition: While the merger could bring advanced
technology, it could also stifle innovation from other players if the merged entity
becomes too dominant and discourages competitive research and development.
2. Public Interest Considerations:
Employment: The Competition Act requires consideration of the impact on employment.
While the companies might argue for job creation through increased network rollout and
service expansion, there's also a risk of redundancies due to integration or operational
efficiencies.
Small and Medium Enterprises (SMEs): The merger's impact on SMEs, particularly
smaller Internet Service Providers (ISPs) or those relying on wholesale access, would
need careful assessment. A highly concentrated market could disadvantage these smaller
players.
Ability of National Industries to Compete Internationally: This factor might be less
directly relevant in this specific merger, as it involves a foreign company acquiring a
local one. However, the potential for the combined entity to become a stronger regional
player could be considered.
Promoting a greater spread of ownership, in particular to increase the ownership by
historically disadvantaged persons: This is a crucial aspect in the South African
LML4802 May/June
Exam Memo | Due
29 May 2025
NO PLAGIARISM
[Year]
,Exam (elaborations)
LML4802 May/June Exam Memo | Due 29
May 2025
.Course
The Law of Competition and Trademarks (LML4802)
Institution
University Of South Africa (Unisa)
LML4802 May/June Exam Memo | Due 29 May 2025. All questions fully
answered with referencing. SECTION A: COMPETITION LAW SECTION A1:
PUBLIC COMPETITION LAW
QUESTION 1 1.1 Starlink is a US-based company wholly owned by SpaceX
and is a provider of satellite internet services. Starlink has operations in over
100 countries and has been eager to enter the South African market without
success. In an effort to comply with South African laws in relation to
shareholding and the composition of ownership of a telecommunications
company, Starlink initiated a move to acquire 70% of Vodacom Ltd. This will
enable Starlink to enter the South African market if all formalities and legal
requirements are complied with. Conduct focused research on the
companies guided by various provisions of merger control and the market in
which they operate. Thereafter, identify and classify the type of merger,
apply the relevant factors considered for evaluation of the merger, and, as
the competition commission, make a recommendation in relation to the
merger. You must not discuss the procedure and notification provisions of
the merger regulations. (10)
As the South African Competition Commission, I would analyze the proposed acquisition of
70% of Vodacom Ltd. by Starlink, a wholly owned subsidiary of SpaceX, with a critical eye,
focusing on its potential impact on competition and public interest in the South African
telecommunications market.
Market Definition
To adequately assess the merger, it's crucial to define the relevant markets in which Starlink and
Vodacom operate.
Starlink: Primarily operates in the satellite internet services market, offering high-
speed, low-latency broadband via its Low Earth Orbit (LEO) satellite constellation. Its
key differentiator is its ability to provide connectivity in remote or underserved areas
where traditional terrestrial infrastructure is limited. While it currently offers direct-to-
, consumer internet, its "Direct to Cell" technology indicates a potential future expansion
into mobile cellular services.
Vodacom Ltd.: A dominant player in the South African telecommunications sector,
operating across various segments:
o Mobile Telephony Services: Voice, messaging, and data services to consumers
(43.8% market share as of Dec 2023).
o Fixed-Line Connectivity Services: Fibre (Fibre-to-the-Home, Fibre-to-the-
Business) and other fixed internet services.
o Business Solutions: Provides a range of services including IoT, cloud hosting,
managed services, and security to enterprises and government.
o Financial Services: Through platforms like M-Pesa and VodaPay.
Given the nature of Starlink's satellite internet offering and Vodacom's extensive mobile and
fixed-line operations, the relevant market for this merger would primarily be the broadband
internet services market in South Africa, encompassing both fixed and mobile broadband, and
specifically considering the potential for satellite broadband to substitute or complement existing
services.
Type of Merger
The proposed acquisition of 70% of Vodacom by Starlink constitutes a horizontal merger with
vertical elements.
Horizontal aspects: While Starlink is a satellite internet provider and Vodacom is
primarily a terrestrial mobile and fixed-line provider, both operate within the broader
broadband internet services market. Starlink's offering can be seen as a direct competitor
or substitute for certain segments of Vodacom's internet services, particularly in areas
with limited terrestrial infrastructure. Furthermore, Starlink's future "Direct to Cell"
capabilities suggest a potential direct horizontal overlap in the mobile services market.
Vertical aspects: This merger presents significant vertical integration. Starlink is a
provider of satellite internet technology (an input), and Vodacom is a significant
distributor and retailer of telecommunication services to end-users. The acquisition would
allow Starlink to leverage Vodacom's extensive distribution network, customer base, and
existing infrastructure. Conversely, Vodacom would gain access to Starlink's satellite
technology.
Relevant Factors Considered for Evaluation
As the Competition Commission, the evaluation of this merger would consider the following
factors as per the Competition Act, with a strong emphasis on both competition and public
interest:
1. Effects on Competition:
Market Structure and Concentration:
, o Vodacom already holds a substantial market share in South African mobile
services (43.8%). The merger with Starlink, a global player with advanced
technology, could significantly increase concentration in the overall broadband
market.
o The South African telecommunications market is characterized by a few dominant
players (Vodacom, MTN, Telkom, Cell C). This merger could further entrench
the market power of the merged entity, potentially leading to less competition.
Barriers to Entry/Expansion:
o Starlink's entry into South Africa has faced regulatory hurdles, partly due to local
ownership requirements and resistance from existing operators. The acquisition of
Vodacom would bypass these entry barriers for Starlink, but simultaneously raise
new barriers for other potential new entrants in the satellite internet space.
o The combined financial and technological prowess of the merged entity could
make it exceedingly difficult for smaller or new players to compete, especially in
the provision of advanced connectivity solutions.
Input and Customer Foreclosure:
o Input Foreclosure: If Starlink's technology becomes a crucial input for advanced
broadband services, the merged entity could potentially deny or restrict access to
this technology for Vodacom's competitors, or offer it on discriminatory terms.
o Customer Foreclosure: If Vodacom's extensive customer base primarily utilizes
Starlink's satellite services post-merger, it could effectively foreclose other
satellite internet providers from reaching these customers through Vodacom's
channels.
Bundling and Tying: The merged entity could have an incentive and ability to bundle
satellite internet services with Vodacom's mobile and fixed-line offerings, making it
harder for single-product competitors to attract customers.
Innovation and Dynamic Competition: While the merger could bring advanced
technology, it could also stifle innovation from other players if the merged entity
becomes too dominant and discourages competitive research and development.
2. Public Interest Considerations:
Employment: The Competition Act requires consideration of the impact on employment.
While the companies might argue for job creation through increased network rollout and
service expansion, there's also a risk of redundancies due to integration or operational
efficiencies.
Small and Medium Enterprises (SMEs): The merger's impact on SMEs, particularly
smaller Internet Service Providers (ISPs) or those relying on wholesale access, would
need careful assessment. A highly concentrated market could disadvantage these smaller
players.
Ability of National Industries to Compete Internationally: This factor might be less
directly relevant in this specific merger, as it involves a foreign company acquiring a
local one. However, the potential for the combined entity to become a stronger regional
player could be considered.
Promoting a greater spread of ownership, in particular to increase the ownership by
historically disadvantaged persons: This is a crucial aspect in the South African
