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Competition Commission looking at local dominance of big tech platforms

Last week the Competition Commission of South Africa published its report on local digital platforms, highlighting the dominance in specific segments of the market of a handful of big technology companies as a problem.

The findings of the Digital Markets Inquiry, as it is has been dubbed, started with investigations in mid-May last year and since wrapped up 14 months later.

In the extensive report, which has a summary that already totals more than 60 pages, the Competition Commission has cited companies like Google, Apple, Takealot, Private Property, Mr D and others for simply dominating too much of the market and exploiting said dominance into controlling how consumers access digital services and solutions.

“The Inquiry has identified leading platforms in each category, which are those that get the most consumer traffic, upon which the business users are relatively dependent, and which are, or are likely to be, entrenched. These leading platforms are Apple App Store, Google Play Store, Takealot, Booking.com, Airbnb, Mr Delivery, Uber Eats, Property24, Private Property, AutoTrader, and Cars.co.za along with Google Search (including its specialist search units such as Google Shopping and Google Travel). The Inquiry’s findings and recommendations apply to these platforms,” a media statement on the report explains.

Google in particular has come under fire from the Competition Commission, with the evidence cited in this new report being quite similar to the myriad antitrust allegations levelled against the technology giant in recent years in other parts of the globe.

“Among other findings, the Inquiry has provisionally found that Google Search plays an important role in directing consumers to the different platforms, and in this way shapes platform competition. The prevalence of paid search at the top of the search results page without adequate identifiers as advertising raises platform customer acquisition costs and favours large, often global, platforms. Preferential placement of their own specialist search units also distorts competition in Google’s favour,” the media statement adds.

“The Inquiry provisionally recommends that paid results are prominently labelled as advertising with borders and shading to be clearer to consumers and that the top of the page is reserved for organic, or natural, search results based on relevance only, uninfluenced by payments. The Inquiry also recommends Google allows competitors to compete for prominence in a search by having their own specialist units and with no guaranteed positions for Google specialist units. The Inquiry is also exploring whether the default position of Google Search on mobile devices should end in South Africa,” it continues.

As such, these kinds of sweeping recommendations would not only impact how people in South Africa access information digitally, but if they come to bear, it could see Google dramatically change how it chooses to operate in this country.

This is conjecture for now, as Google has not officially commented on the report itself. This will likely only come later in the year, when those companies named in the report will be able to provide responses to some of the findings.

“Following the release of the provisional reports there will be a period of six weeks for the submission of public comments. Affected parties will also receive a version where their own confidential information is unredacted. The Inquiry will review all public submissions and engage directly with stakeholders affected by any provisional findings and recommendations,” notes the Competition Commission.

“That process may result in changes to the provisional findings and/or recommendations. The Inquiry contemplates releasing a final report with findings, remedial actions and recommendations in November 2022,” it concludes.

With a number of big operators mentioned in the Digital Markets Inquiry, should the Competition Commission indeed follow through with its recommendations, it could signify a paradigm shift in the local technology landscape.

[Image – Photo by Daniel Romero on Unsplash]

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