EFSA Responds to the Competition Commission’s Plans for a Market Inquiry

In October 2020 EFSA submitted our views on a discussion paper by the Competition Commission (CompCom) on “Competition in the Digital Economy”. In that paper CompCom pointed out that it had only once intervened in a merger within the digital economy (to prevent Naspers buying WeBuyCars), but that both on the global and national levels digital economy players were creating the situation for “abuse of dominant positions” (ie building monopolies or oligopolies). The Newsletter has reported recently of the moves both in the USA and in the EU to clip the wings of major global players, such as Facebook, Google, Apple, etc. In February CompCom issued its plans to hold a ‘market inquiry’ on some aspects of the digital economy and EFSA responded to that proposal on 12 March.

The CompCom proposal recognises that global players are being investigated elsewhere, and that fintechs fall under a number of regulatory authorities in the SA. It therefore has decided to concentrate first on the major SA ecommerce players – Takealot, MrD, UberEats, Travelstart and others. In the EFSA response, we reiterated our view that the digital economy cannot be considered separately from the offline retail space; that the sector is very new and that it is inevitable that a certain degree of consolidation would occur, which would provide the necessary scalability for ecommerce-related services to become established, and that thousands of small and medium sized companies flourish in SA using a very wide range of platforms (such as Instagram, FB, and many other dedicated e-marketplaces. In a recent University of Amsterdam study of e-marketplaces in Africa over 100 such platforms were identified in SA). Our submissions to CompCom are available from [email protected]