LML4802 Assignment 1
(COMPLETE ANSWERS)
Semester 2 2025 - DUE
September 2025
For assistance contact
Email:
, Starlink–Vodacom Merger under the Competition Act 89 of 1998: A Legal Analysis
Introduction
The Competition Act 89 of 1998 (“the Act”) seeks to prevent anti-competitive practices in South
Africa by regulating restrictive practices, abuse of dominance, and mergers. Section 12A
requires the competition authorities to evaluate mergers not only on competition grounds but also
on public interest considerations, making South African merger law unique in balancing
economic efficiency with socio-economic objectives. The proposed acquisition by Starlink, a
US-based satellite internet provider owned by SpaceX, of a 70% stake in Vodacom Ltd, South
Africa’s leading telecommunications operator, raises significant issues regarding merger
classification, potential effects on competition, and broader public interest outcomes.
1. Merger Classification under Section 11 of the Act
According to section 11, mergers are classified as small, intermediate, or large, depending on the
financial thresholds set by the Minister of Trade, Industry and Competition. Since Vodacom is
one of South Africa’s largest telecommunications companies, with revenues and asset values
exceeding billions of rand, and Starlink is backed by a global corporation with substantial
financial muscle, this transaction would clearly qualify as a large merger.
Large mergers require prior approval by the Competition Commission and must be referred to
the Competition Tribunal for adjudication (s 14(1)(b)). The size and international nature of the
transaction also suggest that it would receive close scrutiny from regulators, as it could alter the
structure of the telecommunications market significantly.
2. Competitive Assessment under Section 12A(1)(a)
The first test in merger control is whether the merger is likely to substantially prevent or lessen
competition.
Market definition: The relevant markets include mobile telecommunications, broadband
services, and satellite internet provision. Vodacom dominates the mobile
telecommunications space, while Starlink operates primarily in the satellite internet
(COMPLETE ANSWERS)
Semester 2 2025 - DUE
September 2025
For assistance contact
Email:
, Starlink–Vodacom Merger under the Competition Act 89 of 1998: A Legal Analysis
Introduction
The Competition Act 89 of 1998 (“the Act”) seeks to prevent anti-competitive practices in South
Africa by regulating restrictive practices, abuse of dominance, and mergers. Section 12A
requires the competition authorities to evaluate mergers not only on competition grounds but also
on public interest considerations, making South African merger law unique in balancing
economic efficiency with socio-economic objectives. The proposed acquisition by Starlink, a
US-based satellite internet provider owned by SpaceX, of a 70% stake in Vodacom Ltd, South
Africa’s leading telecommunications operator, raises significant issues regarding merger
classification, potential effects on competition, and broader public interest outcomes.
1. Merger Classification under Section 11 of the Act
According to section 11, mergers are classified as small, intermediate, or large, depending on the
financial thresholds set by the Minister of Trade, Industry and Competition. Since Vodacom is
one of South Africa’s largest telecommunications companies, with revenues and asset values
exceeding billions of rand, and Starlink is backed by a global corporation with substantial
financial muscle, this transaction would clearly qualify as a large merger.
Large mergers require prior approval by the Competition Commission and must be referred to
the Competition Tribunal for adjudication (s 14(1)(b)). The size and international nature of the
transaction also suggest that it would receive close scrutiny from regulators, as it could alter the
structure of the telecommunications market significantly.
2. Competitive Assessment under Section 12A(1)(a)
The first test in merger control is whether the merger is likely to substantially prevent or lessen
competition.
Market definition: The relevant markets include mobile telecommunications, broadband
services, and satellite internet provision. Vodacom dominates the mobile
telecommunications space, while Starlink operates primarily in the satellite internet
