South Africa’s Competition Commission Enforces Remedial Actions Against Dominant Online Platforms

South Africa’s competition commission has published the final report of its Online Intermediation Platforms Market Inquiry (OIPMI), which investigates the competitive practices of major online platforms. The report highlights features that negatively impact competition in the business-to-consumer (B2C) online platform markets and proposes remedial actions to address these anti-competitive practices.

Leading platforms, including Google, Booking.com, Takealot, Apple, Uber Eats, Mr D Food, Property24, Private Property, AutoTrader, and Cars.co.za, are among those required to implement the remedial actions. National restaurant chains, Bolt Food, and Prop Data are also part of this initiative.

Key Findings:

The report identifies several key findings that illustrate how certain practices hinder competition. Google Search, as a critical gateway to consumers, favors large established platforms through its paid search and free results model. Booking.com’s restrictions on hotel pricing on other online channels limit competition and lead to higher commission fees. Takealot faces a conflict of interest on its site as its retail division competes with marketplace sellers, disadvantaging the latter.

Google Play and Apple App stores are unrestricted in the commission fees they charge app developers, affecting the visibility of SA-paid apps. Competitors to Uber Eats and Mr D Food are disadvantaged by the lack of menu surcharge transparency and restrictions imposed by national restaurant chains. Property24 and Private Property lack interoperability, hindering competitors, while discriminatory pricing by Property24, AutoTrader, and Cars.co.za favors large national groups, putting small estate agents and automotive dealers at a disadvantage.

Remedial Actions:

To address these findings, the OIPMI has proposed several remedial actions for the platforms:

• Google will introduce a South African badge and search filter, display smaller SA platforms relevant to searches, and invest R180m in advertising credits.
• Booking.com is required to remove restrictive pricing clauses from its contracts.
• Takealot must segregate its retail division from its marketplace operations to prevent unfair competition.
• Google Play and Apple App stores must allow apps to direct consumers to pay on their websites and ensure free use of content purchased from those websites, along with local app curation.
• Uber Eats and Mr D Food must inform consumers about charging restaurants commission fees and communicate any menu price variations.
• Property classifieds must enable estate agencies to share listings with other classifieds, while Property24, AutoTrader, and Cars.co.za must reduce listing prices for small and medium independent agencies and dealers.

Benefits:

The remedial actions are expected to benefit smaller South African platforms by increasing visibility and opportunity, promoting more intense platform competition, and leveling the playing field for small businesses. The aim is to create a more inclusive digital economy.

Implementation:

All platforms will be granted time to implement the remedial actions based on the complexity of each remedy.

In conclusion, the competition commission’s report and its proposed remedial actions demonstrate a commitment to fostering fair competition and inclusivity in South Africa’s online platforms, ultimately benefiting businesses and consumers alike.