Competition Commission calls for participation in online market investigation –

The Competition Commission calls for participation in its online market investigation which will take place virtually during the month of November, in the form of public hearings on the functioning of the online economy, the factors that could hamper competition or participation and proposals for solutions to the problems identified.

Large and small platforms and online retailers, businesses that use online channels to reach consumers, business organizations, venture capitalists who invest in the digital economy, and the public who use online channels are all invited to participate in the digital markets survey by visiting the request site website.

The structure of public hearings and how stakeholders can participate are explained on the website, which also contains a survey hearing form that stakeholders can complete and send to the email address of the inquiry to before the end of September. The inquiry will release the schedule for the public hearings a week later.

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If you cannot attend the online market survey

Intervenors who cannot attend public hearings can also use the other measures put in place to participate. The website offers a survey for businesses that uses online channels to reach consumers, which will help the survey understand the experience of business users and in particular:

  • The extent of dependency on the platform
  • The restrictions that platforms impose on their business
  • Perceived fairness of search algorithms
  • Platform terms and conditions
  • Platform commission fees
  • The impact of any unfair treatment on their business.

According to the Competition Commission, it is essential that companies undertake the investigation to ensure that their voices are heard. Stakeholders can send written comments as part of the subsequent issue statement to the email address.

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Why do an online market survey?

South African consumers and businesses have embraced online channels since the start of the pandemic to:

  • Purchases
  • Food delivery
  • Travel accommodation reservation
  • Research before large purchases such as cars or houses
  • Downloading apps for almost every aspect of digital life.

The commission launched an inquiry into competition and participation in the online economy earlier this year, in response to the growing importance of the online economy and competition concerns in these emerging markets in other countries. , to ensure that consumers and businesses benefit from competition between online platforms. and that historically disadvantaged small businesses also have the opportunity to participate equitably in the online economy.

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First phase of online market investigation completed

The commission reports that the first phase of information gathering is complete and the information obtained has resulted in the publication of a New Statement of Problems (FSOI) which identified market dynamics and practices that could potentially hamper competition. or result in unfair treatment of businesses using popular websites. platforms. These problems include:

  • The extensive and growing use of Sponsored Ranking, its impact on consumer choice and the ease with which it is to discover small businesses or historically disadvantaged businesses on these platforms
  • The rationale and impact of the higher commissions and listing fees that small restaurants, car dealerships and real estate agents have to pay compared to large national chains on food delivery platforms and online classifieds for cars and goods
  • The need for companies to make discounts or offer promotions on platforms to gain visibility with consumers and the pressure from platforms to do so
  • The fairness of the terms and conditions of the platform, including payment terms, liability for loss and termination on the platform
  • The general lack of platform initiatives to support the transformation of the online economy and the increased involvement of SA companies on global platforms
  • The rationale and impact of price parity clauses imposed on businesses in e-commerce, delivery and travel and accommodation platforms
  • The impact of massive search engine marketing and consumer promotions from major platforms on the ability of emerging platforms and individual businesses to gain visibility with consumers online
  • Big brands or large retail chains do not support emerging platforms and the impact on consumer adoption and platform growth.

The virtual public hearings will be held from November 2 to 19 and are expected to open a public conversation on the preliminary observations and identify actions or changes in business practices that can positively shape the burgeoning online economy to deliver the best results. consumers and businesses. that depend on online sales.