The aim of the inquiry was for the commission to get a greater understanding of the online markets operating in South Africa and whether there are factors that may be hindering competition or undermining the public interest. File photo.
The aim of the inquiry was for the commission to get a greater understanding of the online markets operating in South Africa and whether there are factors that may be hindering competition or undermining the public interest. File photo.

Competition Commission launches platforms market inquiry

By BR Reporter Time of article published May 17, 2021

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The Competition Commission is set to start its Online Intermediation Platforms Market Inquiry on Tuesday.

The commission said the inquiry would cover online markets that facilitate transactions between businesses and consumers (or so-called “B2C” platforms) for the sale of goods, services, and software.

According to the commission, online intermediation platforms include e-commerce marketplaces, online classified marketplaces, software application stores, and intermediated services such as accommodation, travel, transport, and food delivery.

The aim is for the commission to get a greater understanding of the online markets operating in South Africa, and whether there are factors that may be hindering competition or undermining the public interest.

“This will ensure that these markets remain contestable and competitive, which is in the long-term best interests of South African consumers and businesses that depend on them,” the Commission, said.

It said said online markets have become an increasingly important channel for businesses to reach consumers, a trend that has accelerated under the Covid-19 pandemic and likely to continue.

“Online markets provide consumers with the convenience of comparing a wide range of options and then safely purchasing online. For businesses, the online markets offer a ready-made infrastructure to sell online and a means to reach an enormous number of consumers nationally and internationally,” it said.

The commission also stated that the shift to online commerce also meant that it was important for South African businesses to participate actively in these markets if they are to be part of the global and national economy.

“However, global experience is that a few platforms may start to dominate online commerce given the features of online markets and in some cases the conduct of the markets themselves. In those circumstances, businesses using the markets may be exploited or discriminated against, and consumers may not be presented with the optimal choices,” the commission added.

The commission said the inquiry would focus on three areas:

a) market features that may hinder competition amongst the online markets themselves,

b) market features that may give rise to the discriminatory or exploitative treatment of business users,

c) market features that may negatively impact the participation of SMEs, and firms owned and controlled by historically disadvantaged persons.

Last year, commissioner Tembinkosi Bonakele said the commission would investigate and create new regulations to prevent the abuse of dominance by big firms.

Takealot, which is part of Naspers' South African internet properties, was pin-pointed as dominant in the South African digital market.

Naspers invested in Tencent investment and used it as a launchpad into the online industry with investments in big Internet players like Delivery Hero, Code Academy, Udemy, PayU, FlipCart, and Mail.ru.

Naspers’ South African Internet properties include Takealot, Autotrader, 24.com, OLX, Property24, and Careers24.

BUSINESS REPORT ONLINE

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