Facebook to be prosecuted in South Africa for abusing its dominance
South Africa’s Competition Commission says that Meta Platforms, formerly Facebook, tried to unfairly block local startups GovChat and #LetsTalk from using its WhatsApp Business API.
Facebook also imposed, and selectively enforced, exclusionary terms and conditions regulating access to the WhatsApp Business API, mainly restrictions on the use of data, the Commission said.
For these reasons, the Competition Commission has referred Meta Platforms for prosecution to the Competition Tribunal for abusing its market dominance.
The dispute between GovChat and Facebook dates back to mid–2020, and landed before the Competition Commission in January 2021.
According to GovChat, Facebook wanted to kick them off WhatsApp to deal directly with the South African government by offering similar services.
GovChat describes itself as a civic engagement platform, offering various government-sanctioned communications services.
It told the Commission that Facebook had gone to GovChat’s clients within government to inform that they were about to be “off-boarded” from the WhatsApp Business API platform.
Facebook argued that GovChat repeatedly refused to comply with its terms of service and refused its offers of help to become compliant.
It said that although GovChat was not authorised by any government department to render services to citizens, its name has created the impression that it was an official government site.
Facebook also asserted that GovChat had gathered sensitive personal information from citizens without controls limiting how it might share this information with third parties.
Eldrid Jordaan, GovChat founder and CEO
GovChat’s arguments have persuaded the Competition Commission, which has now escalated the matter for prosecution.
“The Act prohibits a dominant firm from abusing its dominance by engaging in exclusionary conduct geared at preventing competitors or potential competitors from entering into, participating, and expanding in a market,” the Commission stated.
According to the Commission, GovChat enables the public to engage with all spheres of government — national, provincial, and local — to report a wide variety of issues such as pothole location and other service delivery requirements.
“GovChat also enables government to disseminate critical information to the public en masse such as information related to Covid–19 system tracking, testing and vaccination,” the Commission stated.
“GovChat has also enabled the poor to apply online for social relief and distress grants.”
The Commission said that GovChat has provided government with “unprecedented insight” into service delivery issues in real-time, and provides government with the ability to provide targeted solutions more efficiently.
It also found that the terms and conditions governing access to the WhatsApp Business API are designed to shield Facebook from potential competition.
“Such as the potential competition presented by GovChat and the enormous data it has been able to harvest which enables it to develop new services and products,” the Commission said.
For these reasons, the Commission has asked the Tribunal to impose the maximum penalty against Meta Platforms, WhatsApp, and Facebook South Africa — which is 10% of their collective turnover.
The Commission also asked the Tribunal to interdict Facebook from off-boarding GovChat from the WhatsApp Business API and declare void specific exclusionary terms and conditions for access to the WhatsApp Business API.
MyBroadband contacted Facebook for comment and it said it wants to work with GovChat to provide this service.
“WhatsApp plays a vital role in providing people with important information from trusted sources, and we are aware of the role the service plays in connecting South African citizens with their government,” a WhatsApp spokesperson said.
“That’s why we want to work with GovChat in compliance with internationally recognised regulatory standards to provide this service.”
WhatsApp reiterated that GovChat repeatedly refused to comply with its policies, which it said are designed to protect citizens and their information.
Instead, GovChat preferred to prioritise their own commercial interests over the public.
“We will continue to defend WhatsApp from abuse and protect our users,” WhatsApp said.
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