Cape Town - Changes to Google and other online markets that facilitate transactions between businesses and consumers in South Africa are imminent after the Competition Commission released its final Online Intermediation Platforms Market Inquiry (OIPMI) report.
The inquiry has also released a summary of findings and remedial actions along with the report to aid the public and businesses that list on these platforms to understand the implications and the impact on them of the findings and remedial actions.
Competition Commissioner Doris Tshepe has handed over the report and decision of the OIPMI, to Trade, Industry and Competition Minister Ebrahim Patel.
Tshepe said the benefits of the remedial actions for platforms, businesses, and consumers would include: “greater visibility and opportunity for smaller South African platforms and enable more intense platform competition”.
She said the remedial actions would level the playing field for small businesses selling through these platforms, and provide a more inclusive digital economy.
Patel applauded the OIPMI team, led by chief economist James Hodge as the chairperson of the inquiry, for their “enormous effort and quality of work” on local and international business-to-consumer online platform markets.
Patel said the government would consider a comprehensive response to the recommendations made by the inquiry, which was a first on many fronts “including that it is the first such inquiry undertaken by a developing African country”.
Some of the findings in the report, which was two years in the making, include that Google Search is a critical gateway to consumers for all platforms and its business model of paid search alongside free results favours large established platforms.
As well as Google, the platforms required to implement remedial actions include Booking.com, Takealot, Uber Eats, Mr D Food, Property24 and AutoTrader which were all found to have uncompetitive practices.
With regards to travel, Booking.com’s restrictions on hotel pricing on other online channels were found to limit competition and create a dependency that is used to extract higher commission fees. Takealot faces a conflict of interest on its site as its retail division competes with marketplace sellers leading to behaviour that has disadvantaged sellers.
Google Play and Apple App stores are unconstrained in the commission fees they charge app developers, and their global business model limits the curation and visibility of SA-paid apps.
Another finding is that competitors to Uber Eats and Mr D Food are disadvantaged by the lack of transparency on menu surcharges across platforms and restrictions placed on franchisees by national restaurant chains.
Competitors to Property24 and Private Property are hindered by the lack of interoperability in providing property listings.
Also, small estate agents and automotive dealers are disadvantaged by the discriminatory pricing of Property24, AutoTrader, and Cars.co.za that favours large national groups.
All platforms will be given time to implement the remedial actions depending on the complexity of the remedies but consumers are set to be the biggest beneficiaries of new rules once they are implemented.
FNB Merchant Services statistics from March 2022 showed that the local online e-commerce market was estimated at just under R200 billion per year.
This figure rose from R90bn in 2019 and R142bn in 2020, and had by then already exceeded pre-pandemic 2025 projections.
mwangi.githahu@inl.co.za