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Big tech companies in the spotlight as South Africa investigates dominance abuse – TechCrunch

Big tech companies are facing increased scrutiny for dominance abuse and anti-competitive behavior in South Africa, just months after the country’s competition authority, the Competition Commission (CompCom), opened an investigation into the conduct of online intermediation (b2c) platforms.

In its initial findings, the regulator found that South Africa’s Apple, Google, UberEats, Airbnb, Booking.com and Mr. Delivery; a food ordering and delivery platform, Takealot; an e-commerce site, Private Property and Property24; both real estate classifieds and auto classifieds Autotrader and Cars.co.za; have an unfair advantage as a leader and operate in a way that hinders competition.

The investigation team may seek additional evidence from parties affected by the “competitive behavior or market characteristic” of these platforms. It also solicits comments on the report’s findings as it moves into the final phase of the investigation, which will include remedial action.

Google and Apple

Citing Google’s monopoly, the regulator said its search engine’s default positioning on Android and iOS mobile devices was problematic. The study also criticized the importance of paid search results (which appear at the top of the page), indicating a lack of clear differentiation from organic search results.

The report recommended that top search results be generated organically, ads should be prominently shaded or flagged, and paid results should be positioned at the bottom of the results page.

n in the spotlight as South Africa investigates abuse of dominance

Illustration of the proposed solution for Google search on mobile devices. photo credit: South Africa Competition Commission

It also called for an end to Google’s preference for its own specialized (shopping, travel and local) search tools, saying they eliminate competition from aggregators, comparison sites and online travel agencies.

“Google must offer competing metasearches or specialized searches (including travel, local and otherwise), comparison sites (shopping or otherwise) and online travel agencies the same opportunity to provide content-rich and visual impressions or entities that it offers its own specialized shopping, travel and local search units. Google is no longer allowed to set minimum bid thresholds for paid results,” CompCom said in its preliminary remedies.

It also recommended “an end to the standard agreements for Google search on iOS and Android devices sold in South Africa”.

In-app stores are “complete exclusion of competing software app stores and sideloading by Apple, which hinders effective competition for commission fees”. Google Play’s default arrangements on Android devices, the commission says, have hampered competition from other Android software app stores.

The regulator has also fingered the Google Play Points loyalty program, which it says is funded by extracting rebates from app developers, a strategy it says is hampering competition from smaller players.

“A lack of competition has resulted in excessive commission fees to the detriment of South African app developers, publishers and consumers of apps purchased through the SA storefront that require in-app payments.”

“…given that Apple does not allow competition and refuses to compromise on security, and that Google Play is well established, there has to be some means of either regulating these platforms or successfully removing transactions entirely from stores in order for them to.” cannot be monitored and taxed. For this reason, the investigation believes there is either price regulation or a complete end to the anti-steering provisions recommended by the court in the Epic-Apple case,” CompCom said in the report.

In its preliminary recommendations, the commission called for an end to anti-steering provisions for all apps and called for an end to lockdown loyalty programs and the default Google Play Store arrangement on Android devices.

“In relation to an end to anti-steering regulations, the investigation anticipates that this would include the ability for apps to communicate an alternative external payment mechanism and provide a clickable link to make a payment.”

Food delivery platforms

CompCom also recommended an end to restrictions imposed by international restaurant chains on franchisees, particularly when choosing food delivery partners. Other proposals included removing price-parity clauses (which require suppliers not to offer better or lower prices on other or their own platforms) from contracts, ending predatory pricing and providing transparency to consumers – particularly on the surcharges for each restaurant.

In addition, she proposed the removal and ban of price-parity clauses used by travel and accommodation platforms, Booking.com and Airbnb, as they were found to hamper competition through lower commissions and prices, which in turn increases consumer dependency elevated.

It was also noted that these platforms use “key visibility on their platform” to earn rebates from accommodation and travel providers to fund their own loyalty programs. CompCom found the practice unfair to small players unable to use it. It also recommended eliminating exclusive loyalty programs, saying such programs should be fully funded by companies.

E-Commerce and Classifieds

Ecommerce platforms have been found to stifle competition as they discourage sellers from price differentials between platforms and distort pricing in the market through subsidies. CompCom suggested that Takealot, a market leader, remove price-parity clauses and end predatory behavior “or alternatively, the Commission may consider investigating and prosecuting predatory behavior as an appropriate deterrent.”

As for listing platforms, the investigation found that the listing engine software used by South Africa’s leading classifieds platforms (Property24, Private Property, Autotrader and Cars.co.za) lacked interoperability and hampered competition. Interoperability and the elimination of fees to include third-party listing platforms were recommended.

https://techcrunch.com/2022/07/16/big-tech-companies-in-the-spotlight-as-south-africa-investigates-dominance-abuse/ Big tech companies in the spotlight as South Africa investigates dominance abuse – TechCrunch

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