The Competition Commission will proactively investigate the dominance of Takealot and other major players in South Africa’s digital market.
Speaking at the 14th Annual Competition Law, Economics, and Policy Conference, Commissioner Tembinkosi Bonakele reiterated the Commission’s commitment to actively investigating and creating new regulations that would prevent the abuse of dominance by major firms.
Takealot was singled out as a dominant force in the South African digital market, with Bonakele likening the ecommerce company to Amazon in the United States and Alibaba in China.
“It is clear that in digital markets it is easy for vertical integration to lead to what is referred to as the ‘tipping’ of the markets, which means there is a likelihood for the rapid expansion of one large dominant platform within a particular market,” Bonakele said.
“We have seen examples of this with the likes of Amazon in the US, Alibaba in China, and we are seeing the same with Takealot in South Africa. Indeed, we already have some cases we are investigating in these markets.”
Bonakele said the Commission’s approach would be a proactive one which attempts to determine any potential abuse of dominance before it can manifest.
“We intend to pursue strategic action for enforcement, including mapping the digital access landscape of South Africa to inform the proactive investigation of conduct by dominant platforms which may be excluding rivals and entrenching dominance,” Bonakele said.
“We have taken a decisive and proactive stance to ensure the balance of economic forces favour a shift to enable a more competitive digital economy.”
“This requires removing the entry barriers, including those created by dominant platforms, and preventing concentration in the online economy of South Africa,” he said.
Stakeholders and companies such as Takealot had until the end of October to make submissions to the Commission on its whitepaper regarding the digital economy in South Africa.
Bonakele said the next step is for the Commission to assess these submissions and have further engagements with key stakeholders before publishing a final report.
The final report will outline the way forward for South Africa in dealing with these markets, he said.