The Competition Commission is reviewing the submissions it has received in response to its proposed competition strategy for South Africa’s digital economy in the future.
The draft paper on Competition in the Digital Economy was published in September for public comment before October 30, offering a strategy that embraces a proactive approach that adjusts to rapidly changing conditions, said Competition Commissioner Tembinkosi Bonakele on the second day of the fourteenth Annual Competition Law, Economics and Policy Conference.
“The next step is to assess the submissions and have further engagements with key stakeholders before finalising the final report,” he continued, noting that the final report would outline the way forward for the markets.
Bonakele commented that the main question to be grappled with was whether South Africa was going to wait for related regulations to take hold in some parts of the world or take its own lead to avoid entrenching market leaders further.
“The question is no longer about whether to regulate or not, but rather how to regulate. Competition regulation in the digital economy is now inevitable.”
The ‘Competition in the Digital Economy’ report provides a review of the emerging competition issues in e-commerce, consumer empowerment and guides businesses on the commission’s approach.
It takes aim at merger controls, cartel conduct and abuse of dominance and vertical restraints, as well as takes a closer look at the leading digital disrupters and their impact on established industries and companies, including Amazon, Netflix, Airbnb and Uber.
“I have an anxiety that we might be caught unaware of the undertakings and understandings that firms may enter into,” he said.
“We intend to pursue strategic action for enforcement, including mapping the digital access landscape of South Africa to inform proactive initiation of cases and the proactive investigation of conduct by dominant online platforms which may be excluding rivals and entrenching dominance.
“We will issue guidelines as appropriate which will regulate the conduct of dominant firms. We will institute scoping studies, impact assessment studies and market inquiries into the digital markets, as well as cooperate with our international counterparts,” Bonakele explained.
The Competition Commission has taken a decisive and proactive stance to ensure the balance of economic forces favour a shift to facilitating entry and a more competitive digital economy.
This requires removing barriers of entry, including those created by dominant platforms and preventing concentration in the development of the online economy in South Africa.
As competition policy alone is insufficient to attain the goals South Africa desires, the strategy paper also sets out the features of the regulatory environment required to extract maximum benefit from the digital economy.
“An enabling regulatory environment – including sound competition policy – along with a vigilant, informed consumer base, innovative business culture, and willing commercial partners can turn the tide in South Africa and ensure that the digital economy delivers on the promise of inclusive economic growth,” the paper outlined.
The commission recognises that markets in the digital economy present novel challenges in detecting, assessing and remedying anticompetitive conduct and transactions.
Further, although the digital economy operates globally with little regard for physical borders and local considerations, it remains in the interests of all South Africans to promote a competitive digital landscape that enables inclusivity rather than exclusivity, supports opportunities for work and that encourages the establishment and growth of local digital players.