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Date of release: 12 February 2020
Vexall granted interim relief against BCX in dispute over computer program used by SA pharmacies to dispense medicine
 
The Competition Tribunal has this morning issued an order granting interim relief to Vexall (Pty) Ltd (“Vexall”) against Business Connextion (Pty) Ltd (“BCX”).
 
The Tribunal has ordered that: 
  • BCX is prohibited from selling or offering a Unisolv licence on condition that a customer purchase value added services from BCX;
  • This will remain in force for six months; and
  • BCX is to pay Vexall’s costs of the application.
The Tribunal will issue reasons for its decision in due course.
 
Background
 
The companies are currently engaged in a High Court dispute involving a computer program known as Unisolv. Unisolv is used by hundreds of retail pharmacies countrywide to dispense medicine and is said to be the industry-standard software.
 
In 2019, some BCX staff members involved in developing and implementing Unisolv reportedly resigned and joined Vexall, in which Dis-Chem is a shareholder.  
 
BCX claims the resignations were orchestrated, while Vexall says the workers were either retrenched as part of a substantial cost-cutting exercise, or resigned seeking job security.
 
In the second half of 2019, Dis-Chem and a substantial number of other pharmacies gave notice to BCX that they would no longer procure “value added services” from the company. These comprise a wide range of services such as hardware and software installation, central patient profile hosting and inventory management services, among others.
 
BCX said some of these services are integral to the functioning of Unisolv as a whole and it would not be viable to “unbundle” these. However, it did not object to Vexall providing non-integral services. Vexall, in turn, argued that it should be able to provide all “value added services”.
 
Tribunal hearing
 
In October 2019, Vexall lodged a complaint against BCX with the Competition Commission, which investigates and prosecutes companies for alleged anti-competitive behaviour. Vexall accused BCX of being a dominant company and of “tying and bundling” i.e. forcing its customers to purchase “value added services” together with the licence to use Unisolv. Vexall argued that this induces customers not to deal with it (Vexall). Vexall also wants to provide “value added services” to pharmacies using Unisolv.
 
BCX, however, denied that it is a dominant company and refuted claims by Vexall that it had acted anti-competitively (“tying and bundling”).
 
Pending the outcome of the Commission’s investigation, Vexall then approached the Tribunal for interim relief on 3 February 2020. The Tribunal is the court of first instance in competition law cases and adjudicates on such matters.
 
It asked the Tribunal to prohibit BCX from:
 
1.      Inducing Vexall’s customers not to deal with it by making the licensing of the Unisolv software (including the right to receive updates, upgrades and new releases of the software) conditional upon those customers also procuring value-added services from BCX (these range from updates and support services to training and consulting services); and
2.      Licensing the Unisolv software on condition that the licensee purchases value-added services from BCX.
 
The Tribunal has granted only the one remedy sought by Vexall.
 
The interim relief application heard in the Tribunal is separate from the High Court matter which BCX lodged against Vexall and others in October 2019.
 
Issued by:

Gillian de Gouveia
Communications Officer
Tel: +27 (0) 12 394 1383
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
Twitter: @comptrib
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