South Africa’s Competition Commission, an agency set up to investigate, control, and evaluate restrictive business practices, abuse of dominant positions and mergers to achieve equity and efficiency in the South African economy, has released the provisional report of its online intermediation platforms inquiry.
The inquiry sought to pinpoint market features that adversely affect competition amongst these platforms and businesses using them. The report scrutinized the operations of several leading online platforms and how they were hindering healthy competition. Operational recommendations were made to address these hindrances and ensure that the markets in which these platforms operate become more contestable to the benefit of consumers and business users. The leading online platforms identified in the report were as follows:
- Apple App Store and Google Play Store – software app stores.
- Takealot – eCommerce
- Property24 and Private Property – property classifieds
- Autotrader and Cars.co.za – automotive classifieds
- Booking.com & Airbnb – travel & accommodation
- Mr Delivery and UberEats – food delivery
Regarding Apple and Google’s dominance in the software app store market, the inquiry identified that there was no effective competition for the fees charged to app developers taking in-app payments. According to the report, this resulted in high costs for developers and hence high app prices for consumers.
The report, therefore, recommends that apps should be able to steer consumers to external web-based payment options, or a maximum cap should be placed on application store commission fees charged by Apple and Google.
The regulator picked an issue with Google’s default positioning of its search engine on Android and iOS mobile devices, saying it’s unfair.
It cited Google’s monopoly with the placement of Android and iOS apps as problematic. The other issue was paid search results placement, saying that Google preferred them over organic search findings. The report recommends having organically generated content rank at the top, with adverts appropriately labelled, with paid results positioned at the bottom of the search page.
In the case of travel & accommodation, e-commerce, and food delivery platforms, the report noted that price parity clauses prevent businesses using the platform from offering lower prices on other platforms as well as on their direct online channel and because of that, they must be removed.
The commission’s report follows a 14-month evidence-gathering period, including public and in-camera hearings.
Members of the public and impacted stakeholders have been given six weeks to submit the inquiry on the findings and recommendations laid out in the provisional report, after which a final report will be published by November.
