EFSA Planning to respond to the SA Competition Commission’s Proposed Inquiry on the Digital Economy

The Competition Commission (CompCom) published its “Terms of Reference” (ToRs) for an inquiry into certain aspects of the Digital Economy in SA. This follows their discussion paper which called for public comment at the end of last year. EFSA sent in its comments to that initial paper and we are now preparing our views on the Terms of Reference paper. As a membership based body we will be consulting with members through our Legal and Regulatory Committee. In our commentary on CompCom’s earlier discussion paper we stressed that a healthy and proactive competition commission is important for the economy. When considering the impact of competition rules, it is essential to have a full picture of the sector under investigation. We suggested that data on ecommerce in South Africa is very thin on the ground, and that there is a serious need for economic data on turnover for Business to Consumer, Business to Business, Consumer to Consumer, and Government use of online purchasing/sales. In addition employment data is completely lacking at present. EFSA is working to provide good data but we have a long way to go. An inquiry on ecommerce and related intermediation services (delivery, travel, accommodation, etc, which the CompCom wishes to investigate) should bear in mind that the digital economy  is still very new in SA, despite its rapid growth in 2020.

The CompCom’s ToRs for the initiation of a market inquiry invites comments until 12 March. Once these have been processed the inquiry would take 18 months. The ToRs recognise that there are 3 different issues in the digital economy – Fintechs and new payment services, which CompCom is ready to leave to the FSCA and IFWG; “free platforms” such as search engines and social media, which it suggests should be covered internationally; and, finally, ‘online intermediation platforms’ which it proposes to concentrate its inquiry upon.

CompCom claims that these intermediation markets are dominated by a number of major players as follows:-

• Ecommerce (Takealot)
• Delivery services (Mr D and Uber Eats)
• Accommodation (Airbnb)
• Travel (Travelstart)
• Classifieds (including Cars.co.za and Property 24)
• AppStores (Google Play and AppleApp).

Other issues maybe added once the inquiry starts. We will be keeping readers informed. Comments are most welcome – let me know ([email protected])