South Africa’s Competition Commission has this week released the provisional report of its online intermediation platforms inquiry. The inquiry sought to identify market features that adversely affect competition amongst these platforms and businesses using them.
The report identified several leading online platforms, scrutinised their operations and how they were hindering healthy competition and finally made operational recommendations to address these hindrances and ensure that the markets in which these platforms operate become more contestable in future 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 in software app stores.
- Takealot in eCommerce
- Property24 and Private Property in property classifieds
- Autotrader and Cars.co.za in automotive classifieds
- Booking.com & Airbnb in travel & accommodation
- Mr Delivery and UberEats in food delivery
In the case of 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. This, according to the report, resulted in high costs for developers and hence high app prices for consumers.
To remedy this, the report recommended that apps should be able to steer consumers to external web-based payment options, or alternatively, a maximum cap should be placed on application store commission fees charged by Apple and Google.
Google was also spotlighted for its Search business, with the report identifying that the prevalence of paid ads at the top of Google’s search results had inadequate identifiers to confirm that they were advertising.
To fix this, it recommended that paid results be prominently labelled and that the top of the page is reserved for organic, or natural, search results based on relevance only, uninfluenced by payments.
In the case of travel & accommodation, ecommerce, 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 own direct online channel and because of that, they must be removed.
The commission’s report follows a 14-month evidence-gathering period which included public and in-camera hearings.
Members of the public and impacted stakeholders have been given 6 weeks to make submissions to the inquiry on the findings and recommendations laid out in the provisional report, after which a final report will be published by November.