Investigation into Takealot and Uber dominance kicks off

The Competition Commission will start its Online Intermediation Platforms Market Inquiry on Wednesday 19 May, with dominant players in the ecommerce industry – such as Takealot and Uber Eats – expected to be the centre of attention.

The inquiry was announced as a proactive measure to get a greater understanding of the online markets operating in South Africa and whether there were factors which may be hindering competition or undermining the public interest.

The inquiry will cover online markets that facilitate transactions between businesses and consumers (or so-called “B2C” platforms) for the sale of goods, services and software.

These platforms include:

  • eCommerce marketplaces.
  • Online classified marketplaces.
  • Software application stores.
  • Intermediated services for accommodation, travel, transport, and food delivery.

With this inquiry, the commission wants to ensure these markets remained contestable and competitive, which it said was in the long-term best interests of South African consumers and businesses that depend on them.

“Global experience is that a few platforms may start to dominate online commerce given the features of online markets and in some cases the conduct of the markets themselves.”

“In those circumstances, businesses using the markets may be exploited or discriminated against and consumers may not be presented with the optimal choices.”

Loot_Takealot_Makro_packages headline

Competition Commission chief economist James Hodge previously told eNCA that certain online platforms had become dominant in particular market segments in the country.

“There is a risk that their dominance becomes nearly irreversibly entrenched,” said Hodge.

The commission has named Naspers as one of the companies which was particularly well-represented in the markets it was looking into for its investigation.

“The Naspers Group features across many of these markets providing scope for conglomerate advantages such as customer data exchange, cross-promotion and self-preferencing, as well as scope economies in distribution,” the Competition Commission said.

Naspers owns Takealot, Mr D Food, Property24, and Autotrader, all of which are leading or major players in their respective segments.

The commission also stated there were other clear market leaders across online intermediation platform markets being used in South Africa.

These dominant players are shown in the table below.

Intermediation platform services in South Africa
Platform Dominant Players Owner
Ecommerce Takealot Naspers
Food delivery Mr D Food Naspers
Uber Eats Uber
Property classifieds Property24 Naspers
Private Property Caxton/Cognition
Car classifieds Autotrader Naspers
Home-sharing accommodation Airbnb Airbnb
Travel aggregation TravelStart Travelstart Online

The inquiry will be broadly focused on three areas of competition and public interest:

  • Market features that may hinder competition amongst the online markets themselves.
  • Market features that may give rise to discriminatory or exploitative treatment of business users.
  • Market features that may negatively impact on the participation of SMEs and firms owned and controlled by historically disadvantaged persons.

The commission provided the programme for the launch of the inquiry as follows:

  • Official announcement of the commencement along with the inquiry timetable.
  • A statement by the commissioner on the scope of the inquiry.
  • Announcement of the commission team that will undertake the inquiry.
  • The approach to the inquiry from the commission team, including next steps.
  • The release of the Statement of Issues and invitation for public submissions.
  • The release of an online survey of business users of online markets.
  • Q&A session.

The commission is expected to publish its final report on inquiry before the end of the year.

Now read: Online shop price comparision – Takealot vs Everyshop vs Makro

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Investigation into Takealot and Uber dominance kicks off