David vs Goliath: Competition Commission fights the good fight for small businesses and makes Google, Takealot pay the price

Google has been subject to a number of restrictions as a result of the anti-trust regulator stepping in. Picture: Pexels

Google has been subject to a number of restrictions as a result of the anti-trust regulator stepping in. Picture: Pexels

Published Jul 31, 2023


The government agency and watchdog Competition Commission has some new rules, but many companies might not be pleased with them.

One such organisation is Google which has been subject to a number of restrictions as a result of the anti-trust regulator stepping in.

Booking.com and Takealot have also been probed by the commission and it seeks certain actions.

In the Online Intermediation Platforms Market Inquiry report, the Competition Commission published remedial actions that are to be taken by various companies in order to support small businesses.

“Most online search, travel and shopping journeys for goods and services start on general search, the entry point for most consumers to the Internet.

“General search leads are considered particularly valuable to platforms because they are intent-based. Google Search is a de facto monopoly, accounting for over 90% of all general searches across desktop, tablet and mobile devices.

“The fact that Google allows duplication where a platform appears in paid and organic results means large platforms can dominate both the top paid and organic search results. The disadvantage faced by SMEs is compounded in the case of black-owned platforms that lack even venture-capital backing domestically,” reads the inquiry.

The commission enforced corrective measures to rectify the distortion it deemed Google responsible for, with an emphasis on increasing sponsored and organic result exposure for smaller South African sites.

Here are such corrective measures:

In order to rectify the distortion brought on by sponsored Google results, the corporation must offer R180 million in advertising credits for small platforms. This is to use in client acquisition. In addition, it must offer free training to optimise advertising campaigns.

For small and medium-sized businesses and black-owned internet businesses, Google must also offer R150 million in training, product support, and other initiatives.

Stop self-preferencing Google's own goods

“In travel, Booking.com is the largest online travel agent (OTA) for traditional hotel and accommodation establishments by a huge distance, with Airbnb only being large in alternative accommodation,” it said.

Booking.com’s wide and narrow price parity provisions, according to the inquiry, restrict competition.

“In addition, Booking.com imposes so-called ‘narrow price parity’ which prevents hotels and other establishments from pricing lower on their own websites for online bookings. The ability of hotels to price lower on their own direct channel is important to develop the channel and reduce dependency on Booking.com, as it provides a reason for consumers to book direct.

“To address this, the remedial action is to remove these obligations and inform all hotels and accommodation providers in South Africa that list on its platform,” says the commission.

When it comes to e-commerce, Takealot was not left unscathed

It was discovered that small companies in South Africa that want to sell on online marketplaces mostly rely on Takealot. Similar to Booking.com, Takealot imposes “narrow price parity” on vendors, barring them from charging too much.

“The inquiry similarly finds that Takealot’s narrow price parity clause distorts competition and requires Takealot to remove this clause and inform all marketplace sellers on its platform,” it said.