Takealot says competition watchdog made “defamatory” findings based on “weak” evidence

Takealot has slammed findings in the provisional report of the Competition Commission’s Online Platforms Market Inquiry, which claimed the online store was undermining competition at the cost of marketplace sellers and consumers.

The inquiry aimed to identify market features that adversely affected competition in ecommerce, app stores, travel and accommodation, online classifieds, and food delivery platforms.

It published its provisional report after gathering evidence and holding public and in-camera hearings over 14 months.

It proposed a slew of regulatory interventions or guidelines to the sector, including dealing with conflicts of interest where companies operate a marketplace for third-party sellers while selling their own retail products.

The commission said this could result in certain self-preferencing conduct, including product gating, retail buyers being given access to third-party data about successful products, and preferential display ads and promotions.

“The lack of a speedy resolution process also adds to the costs of sellers,” the inquiry said.

It recommended an internal structural separation of retail from the marketplace to implement equitable and competitively neutral processes.

The report also found “extreme levels” of fee discrimination against small-to-medium enterprises (SMEs) in online classifieds and food delivery.

The inquiry found that fee discrimination hindered these businesses’ participation in the space without coherent justification.

“The inquiry provisionally recommends that a maximum cap is placed on the fee differentials between large and small businesses, potentially at 10-15%.”

“In food delivery, it is recommended that more equitable treatment also occurs in terms of marketing commitments made in exchange for lower commission fees.”

What Takealot sellers complained about

Business Times says the report found that almost all complaints against Takealot concerning the above practices were justified.

Among the complaints, sellers accused Takealot of barring them from selling certain products when these could be sold by Takealot Retail.

In addition, some alleged they weren’t permitted to participate in promotional sales in cases where Takealot Retail was selling one of its products during a sale.

The newspaper said Takealot sent its official response to the commission’s report three weeks ago, criticising the commission’s view of accusations of unethical and unlawful conduct as “deductive supposition” based on “weak evidence”.

It also said accepting these submissions as “incontrovertible facts” while not taking “compelling evidence to the contrary” into account was defamatory.

Takealot further argued that brick-and-mortar retailers and other ecommerce players were constraining it.

In response to findings that food delivery platforms like Takealot-owned Mr D give SMEs more equitable treatment, Takealot said it was constrained by restaurants’ own delivery services, takeaway options, sit-down dining, and grocery delivery platforms.

Takealot Group CEO Mamongae Mahlare told Business Times they believed that the South African ecommerce industry needed space to evolve and that imposing more regulation was not the right move at this stage.

“This is the new economy. The world is digitising, and there is great empowerment that these platforms can do and generate a lot of jobs that traditional businesses have not been able to,” Mahlare said.

The commission plans to release its final report with recommendations on 18 November 2022.

Now read: Taking the fight to Takealot

Latest news

Partner Content

Show comments


Share this article
Takealot says competition watchdog made “defamatory” findings based on “weak” evidence