Google, Booking.com, Takealot dominance 'unfair' - CompCom
The Competition Commission has found that American tech giant Google's dominance and business model have led to unfair competition in South Africa.
On Monday, the commission released its Online Intermediation Platforms Market Inquiry report in Pretoria.
The inquiry was launched in February 2021.
The Commission also noted that the price parity requirements for platforms like Booking.com imposed on customers, preventing them from listing services and products more cheaply on rival sites.
It recommended guidelines for Google, Takealot, Booking.com, Uber Eats, Apple, Porperty24, AutoTrader, and Cars.co.za to ensure fair competition where smaller businesses can compete.
In eCommerce, the commission's Deputy Commissioner James Hodge said Takealot faces a conflict of interest on its site as its retail division competes with marketplace sellers leading to behaviour that has disadvantaged sellers.
"Some of the findings 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.
"With regards to travel, Booking.com’s restrictions on hotel pricing on other online channels limits competition and creates a dependency that is used to extract higher commission fees."
Hodge said 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 was 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, and small estate agents and automotive dealers are disadvantaged by the discriminatory pricing of Property24, AutoTrader, and Cars.co.za favouring large national groups."
Some of the remedial actions are that Google should provide a South African badge and search filter to aid consumer support for SA platforms and along with training and R180m in advertising credits.
"Google is to implement in SA changes it makes in Europe to address self-preferencing. Booking.com is required to remove restrictive pricing clauses from its contracts.
Takealot needs to separate its retail division from its marketplace operations, preventing its retail services from accessing seller data and unilaterally stopping sellers from competing for specific brands.
Hodge said Google Play and Apple App stores should stop preventing apps from directing consumers to pay on the app’s website and to ensure continued free use by consumers of content purchased from that website, along with local app curation.
"Uber Eats and Mr D Food are required to inform consumers that they charge restaurants a commission fee and that menu items may be priced differently to takeaway menus, and restaurant chains may not unreasonably restrict the choice of food delivery service by franchisees," he added
“Property classifieds are required to put in place the ability of estate agencies to share their listings with other classifieds, and Property24, AutoTrader, and Cars.co.za is required to substantially reduce the price of listings to small and medium independent agencies and dealers.
"The remedial actions should provide the following benefits to platforms, businesses, and consumers: greater visibility and opportunity for smaller South African platforms; enable more intense platform competition; level the playing field for small businesses selling through these platforms; and provide a more inclusive digital economy."
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