Takealot, Uber Eats, and Google respond to Competition Commission report

Takealot.com says it does not agree with some of the Competition Commission’s provisional findings in its Online Intermediation Platforms Market Inquiry summary report.

“We have and will continue to engage with the panel on the provisional findings and will respond to the panel in full before the report is finalised,” Takealot said in a statement.

“Takealot.com is a proudly local business that enables South African SMMEs.”

This comes after the Competition Commission released its provisional findings this week, proposing sweeping changes to how online businesses should operate in South Africa.

The Competition Commission made several recommendations that would affect nearly all online platforms. These include:

  • Removing price parity clauses that prevent listing items for cheaper on competing platforms.
  • Stop selling the top position in search results as an advertisement slot.
  • Cap on platform fee differentials between small and large businesses of 10%–15%, as small companies pay substantially more.

For delivery services like Uber Eats and Mr D Food, the Commission said that platforms must be more transparent in stating the percentage they take.

It noted that there are often hefty surcharges on menu items due to the high commissions delivery services charge. These should be transparent to consumers, the Commission said.

National delivery platforms must also end incentives to steer volumes their way to allow smaller players to compete.

“We acknowledge the release of the online markets inquiry provisional report. We are currently considering its contents,” Uber Eats Sub-Saharan Africa general manager Nakampe Molewa said.

“We have been engaging constructively with the Commission and other stakeholders throughout the [inquiry] process, and we look forward to continuing in these engagements.”

Molewa said Uber intends to take the opportunity afforded by the Commission to submit comments on the provisional report.

“We believe delivery people should be allowed more options for earning opportunities, and customers should have more choice in the way they order food or essentials,” stated Molewa.

“We will continue to work with our community and stakeholders to create an economically sustainable sector that creates growth and earning opportunities for the country and its citizens.”

Google maintains that its products increase choice and expand competition.

“They level the playing field for small businesses everywhere — enabling them to sell their products, find customers, reduce their costs and, in difficult times, get back on their feet,” the search giant said in an emailed statement.

“The competition Google faces is always increasing: there are more ways than ever that people can find information, from specialised sites for travel and shopping, or from other search engines, social media and elsewhere.”

Google said it would review the report and “work constructively” with the Commission to answer its questions.

“Our mission is to organise information and make it universally accessible and useful,” Google stated.

“That’s why we invest in products like Search, Gmail and Maps to help people in South Africa every day.”

In addition to its general recommendations, the regulator took aim at the app store commission model employed by companies like Google and Apple.

Epic Games is locked in a bitter feud with Apple over its refusal to pay the App Store’s high commissions.

There are several legal battles on the issue of digital software marketplace commissions in the United States and Europe.

These fees can range from 12% to 30%, and companies that offer low-margin or subscription services have complained that such high commissions break their business models.

This wouldn’t be an issue, except app stores also often reserve the right to kick an application or game off their platform unless it implements in-app purchases for items and subscriptions it sells outside the app.

Rather than prescribe specific commissions, the Competition Commission recommended that store operators let apps direct customers to external payments services.

The Competition Commission said it would release another version of its main report on the inquiry in the next few weeks once over-broad claims for confidentiality have been resolved.

It gave interested parties six weeks to make submissions on the provisional findings and recommendations.

All submissions should be sent to [email protected] by close of business on 24 August 2022 and should be substantiated with evidence, where relevant.

The Commission said it would consider these submissions and may change its views on its current findings before publishing its final report by November 2022.

Now read: DStv’s SuperSport hauled to the Competition Commission

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Takealot, Uber Eats, and Google respond to Competition Commission report