COMMISSION CONTINUES TO MAKE GREAT STRIDES IN FOSTERING A MORE INCLUSIVE DIGITAL ECONOMY

Each year competition authorities around the globe mark 5 December as World Competition Day. This year, authorities reflected on their work in relation to artificial intelligence, consumers, and competition policy. The business models of new digital markets are complex and constantly changing the competition landscape. This has brought about new regulatory challenges for competition agencies across the world, and here at home as well.

To attest to this assertion, Minister Parks Tau also wrote in the foreword of the Competition Commission’s 2024/25 Annual Report, that the Commission continues to refine its approach and strengthen its capacity to address rapidly evolving digital markets. To ensure we are equipped to address the competition challenges that the digital world is likely to present in the near future, it is vital for a competition authority to remain agile in its approach and efficient in the execution of its work.

At the Competition Commission, we constantly ask ourselves whether the outcomes we are delivering are tangible and offer relevant results for the people of South Africa, including opportunities for historically disadvantaged persons (HDPs) who would have been excluded in the past, and small and medium enterprises, that contribute to building resilience and promoting fairness in the economy. In a digital economy, this work is more important than ever.

Just this past year, the Commission has undertaken significant follow-up work on the remedies and recommendations of the Online Intermediation Platforms Market Inquiry (OIPMI). This work included several stakeholder engagements and a national workshop to explore solutions for funding digital start-ups of small to medium enterprises and HDPs with a focus on pre-revenue support. The Commission also monitored and verified implementation of OIPMI remedies by platforms like Booking.com, which removed restrictive pricing clauses. This measure enhances the competitiveness of accommodation providers and allows them to innovate and develop their direct sales channels. For consumers, these developments mean that they can benefit from lower price options and the availability of different sales channels that are competitive.

In addition, Booking.com launched support programmes for HDP-owned accommodation providers. The Commission is pleased with the positive outcome of extensive consultations with Booking.com and the collaborative engagements with the platform and its representatives. This agreement not only marks a crucial step towards a more competitive and inclusive digital economy but also illustrates the necessary agility, follow-up, and consistent engagement with all stakeholders involved to identify, develop and implement mutual solutions in an evolving market.

Through OIPMI, the Commission lowered barriers that discourage the effective participation of smaller businesses in eCommerce (marketplace sellers), travel and tourism (accommodation providers), food delivery (restaurants and food delivery platforms) and online classifieds (car dealerships and estate agents). The implementation of the remedial actions proposed by the OIPMI is still ongoing and is expected to ultimately result in savings of R1.16 billion to businesses in South Africa. In the food delivery and eCommerce sectors, benefits to SMEs and HDP-owned businesses have exceeded R40 million to date.

The Commission also recently published its final report in the Media and Digital Platform Market Inquiry (MDPMI), and this landmark report underscored that the global transition to digital platforms has severely undermined traditional revenue models and has eroded the financial positions of news media. In South Africa, declining advertising income and the limited ability of audiences to pay for subscriptions have led to shrinking newsrooms, closed bureaus, and constrained reporting capacity. Meanwhile, digital platforms exacerbate these pressures by capturing audiences and monetisation opportunities that traditionally sustained news outlets.

When identifying remedies that address competition concerns in a digital market, the Commission’s holistic approach not only includes extensive engagement but also negotiations with affected stakeholders. This approach assists in developing a comprehensive package of remedies that are designed to restore fairness, transparency, and sustainability, and in the case of the MDPMI, specifically in South Africa’s media ecosystem. These remedies are immediately implementable, and the Commission looks forward to continuing to engage with stakeholders in the news and digital sectors to evaluate the impact of the recommendations and gain insight into the shift towards greater digitalisation.

Our work with these two inquiries highlights the agility and efficiency we strive to achieve in our monitoring of digital markets and responsiveness to possible anti-competitive conduct that could have an adverse impact on South African businesses. As we reflect on the year that has been and the year that is to come, the Commission is mindful and ready to continue playing its part in fostering a competitive, dynamic, deconcentrated and inclusive economy.