Leading competition differently: South Africa puts Google, Apple & Co on the curb

New times are coming to online platforms in South Africa. Apple, Google, booking.com, Uber Eats and others are said to be remodeling the structure of their offers and in some cases even the company itself. Because large online platforms distort or impede competition in numerous other sectors.

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This was determined by South Africa’s competition authority CompCom (Competition Commission South Africa) after more than two years of investigation. The final report published on Monday contains a number of conditions for eleven affected platforms and recommendations to the government. In this way, the authority wants to give South African companies, and in particular black companies, better chances of competing.

Apple and Google prohibit app operators from pointing out alternative payment methods in the respective app store. “This leads to high fees that are likely to either increase app prices to the detriment of end users, or reduce app developer revenue, reducing investment and innovation.” Because Apple and Google are not exposed to competitive pressure in their app stores, they can charge any amount. Now the two data companies in South Africa are to abolish their restrictions that prohibit apps from referring to alternative payment methods. The implementation is to be based expressly on measures as provided for in the Digital Markets Act of the European Union.

Secondly, the authority is bothered by the fact that Apple and Google, with their app stores, earn hundreds of millions a year in South Africa, but do not particularly emphasize local apps. Although local offerings could have consumer benefits, Apple and Google would primarily showcase international apps. From now on, both should highlight South African apps and give away additional credit for advertising to South African app operators.

Requirements for Google’s search engines

CompCom makes similar conditions for Google’s search engine, which has a virtual monopoly in the country with a market share of more than 90 percent. Google would highlight international and in-house offers in search results. Large corporations could also afford to appear in both the search results and the ads that preceded them.

As a countermeasure, Google is obliged to create its own, prominently placed segment (“carousel”) in search results that refers to smaller, South African online platforms. Free of charge, and with “rich” presentation. In addition, Google should highlight search results from South Africa by displaying the country’s flag; there will also be a filter that will allow South African users to limit search results to domestic offers.

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Not enough, Google has to offer free training for small online platforms to help them use Google’s advertising platforms. In addition, the group is to give away credit for the purchase of advertising space worth the equivalent of a good 8.8 million euros. Google is to invest a further 7.4 million euros in SEO (Search Engine Optimization) training courses for small and medium-sized companies and black entrepreneurs (officially known as historically disadvantaged people).

Finally, Google should also implement all the measures in South Africa that it must implement under the Digital Markets Act of the European Union in order to stop giving preference to its own offering. CompCom expressly disrupts the prominent placement of Google’s offers for brokering online purchases and travel bookings (Google Shopping, Google Travel).

Bad best price clause

When it comes to travel bookings, the authority is also reining in the market leader booking.com. The online travel agency forces accommodation providers to also offer all rooms via booking.com, and always at the best price. This is fundamentally anti-competitive and anti-consumer. In the EU, booking.com has abolished its best price clauses, and now South Africa should also put an end to this brake on competition.

In addition, booking.com is said to fund projects that track down small and medium-sized businesses that are owned by black people or operate in black neighborhoods. These projects should help such companies to register on booking.com, to be advertised there and thus to grow.

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