Merger Control and Potential Competition: The MIH/WeBuyCars Case

This paper examines the South African Competition Tribunal’s decision in MIH/WeBuyCars, the
first digital merger prohibited on potential competition grounds in South Africa. The case is best
understood as a reverse killer acquisition, whether the acquirer is considered a potential competitor
of the target. The paper studies challenges in establishing the likelihood of entry, focusing on (1) the
limits of a factual inquiry, (2) the benefits and limitations of the dynamic capabilities framework,
and (3) the distinction between capability and incentive to enter. It also considers the implication of
a policy preference for entry-driven innovation over integration-driven efficiencies for the potential
competition assessment. Post-prohibition outcomes in this case, where no entry has occurred and
merger efficiencies are foregone, illustrate the risk of false positives for theories of mergers harm
focused on potential competition.