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UberEats, Takealot and other digital markets probed by Competition Commission

Competition Commission launches investigation into eCommerce marketplaces, online classified marketplaces such as Takealot and UberEats. Photographer: Armand Hough/African News Agency(ANA)

Competition Commission launches investigation into eCommerce marketplaces, online classified marketplaces such as Takealot and UberEats. Photographer: Armand Hough/African News Agency(ANA)

Published May 19, 2021

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Cape Town – The Competition Commission is set to launch its inquiry today into online markets that facilitate transactions between businesses, in a bid to gain a greater understanding of the online markets in South Africa.

The commission also wants to know whether there are factors that are hindering competition or undermining public interest.

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The Online Intermediation Platforms Market Inquiry will examine platforms such as e-commerce marketplaces, online classified marketplaces, software application stores and intermediated services such as accommodation, travel, transport and food delivery.

Spokesperson Siyabulela Makunga said the inquiry was broadly focused on three areas of competition and public interest: “Market features that may hinder competition amongst the online markets themselves; market features that may give rise to discriminatory or exploitative treatment of business users; and market features that may negatively impact on the participation of SMEs and firms owned and controlled by historically disadvantaged persons.”

In February when the commission published the inquiry’s terms of reference, it highlighted several domestic online intermediation platforms as a possible cause for concern.

The commission said: “Online intermediation markets are already becoming concentrated domestically, with clear market leaders and dominant platforms emerging across several online intermediation platform markets.

“For instance in e-commerce, Takealot (including Superbalist) is substantially larger than other online platforms and operates a marketplace on which many business users are now dependent as a route to market.

“In most service-delivery platforms there are one or two dominant providers. For instance, in food delivery Mr D and UberEats account for the bulk of trade whilst Airbnb has been the market leader in home-sharing accommodation.

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Food delivery Mr D and UberEats account for the bulk of trade while Airbnb has been the market leader in home-sharing accommodation, the commission says. Photographer: Armand Hough/African News Agency (ANA)
File picture: Armand Hough/African News Agency(ANA)

“In travel aggregation, TravelStart has emerged as the leading provider.

“In online classifieds, there are typically two platforms that dominate sales leads and market revenue. For instance, Autotrader and Cars.co.za in autos, or Property24 and Private Property in house listings.

“In software app stores, the dominance of the Android operating system in mobile phones gives Google Play a particularly dominant position, but equally the Apple App store is the only option for iPhone users.”

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Responding to reports of the inquiry, Bidorbuy chief executive Craig Lubbe said his firm was not worried about the inquiry as the bidorbuy.co.za business model provided an inclusive space for individuals and businesses.

Lubbe said: “Whether or not the commission will find evidence showing that prominent players in the marketplace sector are operating in a manner that is uncompetitive is yet to be seen. We are not in a position to comment on this.

“We believe fully that our customers (buyers and sellers) benefit from the choice they have to connect with potential customers, accept payments and integrate with shipping providers, by using our platform as an online channel for their business.”

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Responding to a question about whether there were guarantees for consumers that choices would not be limited if, for instance, Bidorbuy were to buy a rival or other business in the same line, Lubbe said: “Our intention is always to provide buyers and sellers on the platform with a good shopping experience.

“That would and should be the focus for any sustainable online business. Any future hypothetical purchase would not likely change that focus.”

Cape Argus

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