NOTE:
THE TEST DATE: 1 October 2015
TIME: 9 am NOT 10am
VENUE: CHAPEL
Sample question
During the period between 2012 to May 2015 Nationwide Pty Ltd, an SA national airline entered into an agreement with travel agents around the country in respect of which the agents would be rewarded for directing customers to “Nationwide”. It created a complex incentive scheme, called Appetiser Scheme, designed to reward travel agents for directing customers to Nationwide. Incentives were paid out in the form of standard commission, plus bonuses which the airline paid to agents who achieved certain targets that Nationwide set for them.
However, SmartAir, another airline operator, has recently lodged a complaint to the Competition Commission against Nationwide. SmartAir, complains that the conduct of Nationwide was anti-competitive.
After conducting an investigation, the Commission confirms the allegations against Nationwide. The Commission approaches you for legal advice on the matter.
Advice Nationwide on the following:
1. whether or not Nationwide has engaged in a prohibited conduct. 15 marks
2. advise the Commission on the sanctions the Competition Tribunal is likely to impose against Nationwide, and how the factors that will be considered in determining the appropriate penalty. 10 marks
Total: 25 marks
