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

Big tech companies are under increased scrutiny in South Africa for abuse of dominance and anti-competitive behavior, just months after the country’s competition regulator, the Competition Commission (CompCom), opened a survey on the conduct of online intermediation platforms (b2c).

In its initial findings, the regulator established that Apple, Google, UberEats, Airbnb, Booking.com and Mr Delivery of South Africa; a food ordering and delivery platform, Takealot; an e-commerce site, Private Property and Property24; Autotrader and Cars.co.za real estate and car classifieds; have an unfair advantage as market leaders and operate in ways that impede competition.

The investigative team is seeking additional evidence, if any, from parties involved in the “competitive…market behavior or characteristic” of these platforms. It also invites comments on the findings of The reportas he enters the final phase of the investigation, which will include corrective action.

Google and Apple

Noting Google’s monopoly, the regulator said its search engine’s default positioning on Android and iOS mobile devices was problematic. The study also disputed the prominence of paid search results (those that appear at the top of the page), indicating a lack of clear distinction from organic search results.

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

Illustration of the proposed Google search remedy on a mobile device. Image credits: South Africa Competition Commission

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

“Google must offer competing metasearch or specialty search (including travel, local and other), comparison sites (shopping or otherwise), and online travel agents the same opportunity to deliver content and impressions or rich visual units that it offers to its own shopping, travel and local search units Google can no longer impose minimum bid thresholds for paid results,” CompCom said in its interim remedy. .

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

In-app stores, he noted, “the complete exclusion of competing software app stores and sideloading by Apple that hinders effective competition for commission fees.” Google Play’s default layouts on Android devices, the Commission said, have affected competition from other Android software app stores.

The regulator also singled out the Google Play Points loyalty program, which it says is funded by extracting rebates from app developers, a strategy that hampers competition from smaller players.

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

“…given that Apple will not allow competition and refuse to compromise on security, and that Google Play has become entrenched, there must be a remedy that either regulates these platforms or removes the store transactions so that they cannot be monitored and taxed.For this reason the Inquiry is of the opinion that there is either price regulation or a complete end to the anti-robbery provisions which have been recommended by the court in the Epic-Apple case,” CompCom said in the report.

In its interim recommendations, the Commission called for an end to anti-steering provisions for all apps and ended exclusive loyalty programs, as well as the Google Play Store’s default arrangement on Android devices.

“In terms of ending anti-steering provisions, the survey expects this will involve 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 on franchisees by international restaurant chains, particularly in the selection of food delivery partners. Other suggestions included removing price parity clauses (which require vendors not to offer better or lower prices on other platforms or on their own platforms) from contracts, an end to predatory pricing and transparency with consumers – especially on surcharges for each restaurant.

In addition, he proposed the removal and prohibition of price parity clauses used by travel and accommodation platforms, Booking.com and Airbnb, which have been shown to hinder competition by reducing commissions and prices that , in turn, increase consumer dependency.

These platforms were also found to leverage “high visibility on their platform” to obtain discounts from accommodation and travel providers to fund their own loyalty programs. CompCom found the practice unfair to smaller players who cannot take advantage of it. He then recommended scrapping proprietary loyalty programs, saying such programs should be entirely corporate-funded.

E-commerce and classified ads

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

For listing platforms, the investigation questioned the lack of interoperability of listing engine software used by major South African classifieds platforms (Property24, Private Property, Autotrader and Cars.co.za ) which has hindered competition. Interoperability and removal of fees, to include third-party SEO platforms, were recommended.

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