The North Gauteng High Court has ordered an interdict to instruct Vodacom Service Provider (VSP) to cease the disconnection of Gogga Tracking Solutions' customer lines in an ongoing battle between the two companies.
Vodacom has retaliated, saying there is no merit in Gogga's application, and has filed paper to defend the court order. “Since the issue is sub judice, we can't comment further at this stage,” notes Richard Boorman, executive head of corporate communications at Vodacom.
The court order follows a complaint by Gogga against VSP at the Competition Commission, in February 2010. The complaint was that VSP participated in anti-competitive practices since August 2007.
However, the Competition Tribunal last week dismissed Gogga's request to force the Vodacom subsidiary to drop its pricing.
This ruling was based on the grounds that the company cannot litigate against VSP, because Vodacom Ventures - another Vodacom subsidiary - has a 49% stake in Gogga.
The shareholders' agreement prevents litigation, unless the shareholders approve it. The ruling also negated Gogga's application for interim relief from the Competition Tribunal, which sought to protect the interests of Gogga, its customers and its markets, while the investigations of the complaints were in process.
With the notice from the tribunal regarding protection, Gogga claims VSP gave the company eight hours' notice last week to settle its account with VSP before its customers' lines would be cut. “We were given notice on Tuesday and Wednesday our customer lines were being cut,” claims Gogga MD Eugene Beetge.
Gogga claims Vodacom not only disconnected its customers, but also used the opportunity to promote its own products and packages.
“The action of suspending the Gogga customers' lines is another clear indication of bully tactics that Vodacom would use. The underhanded tactics used to convince customers to move their lines to Vodacom is inappropriate and will be handled accordingly,” he continues.
The crux
In April, Vodacom argued that the matter was not a competition issue, but a simple case of Gogga not paying its accounts and claiming anti-competitive behaviour.
According to the mobile operator's competition submission, Gogga's deal with Vodacom was suspended, because the company's accounts were in arrears.
The mobile operator said, despite its investment into Gogga, the small business has been accumulating debt for years.
Vodacom noted that, in January last year, it agreed to provide bridging finance to the company, which it squandered through the year, digging a deeper debt hole for itself.
However, Gogga has defended itself, saying: “We would like to correct the record in stating that Vodacom publicly claims that Gogga has an outstanding account with Vodacom, which led to the disconnection of lines. This message has also been given to our own customers.
“We believe this is intended to discredit Gogga in the market. The outstanding amount that Vodacom indicates forms one of the biggest issues of our complaint and, in fact, the account of Gogga should be in credit with more than twice the claimed Vodacom amount,” claims the company.
“Vodacom has done irreparable harm to our company, brand, products and recently our own customers. The intention behind our actions is to try and restore customer confidence in our company and brands,” concludes Beetge.
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