The Online Platform Markets Inquiry (Inquiry) has released a Further Statement of Issues (FSOI) following a review of public submissions to the initial statement of issues and responses by online platforms to information requests sent out in May this year. In releasing this FSOI, the Inquiry invites market participants and other interested parties to provide views and information on the additional issues identified. The deadline for submissions is 23 September 2021. 

The scope of the Inquiry is on business to consumer (B2C) online platforms, and in particular features that may restrict platform competition or which relate to competition amongst, and fair treatment of, the businesses that use these platforms to list and sell products, in particular SMEs and businesses owned by historically disadvantaged persons (HDP businesses). 

The FSOI highlights areas for more focused investigation in five online platform categories, namely eCommerce, delivery platforms, travel & accommodation, online classifieds, and app stores. Some of the common issues related to businesses using the platforms include:

•              The extensive and growing use of sponsored ranking (i.e. payments to appear higher up on consumer search results), and its impact on consumer choice and the discoverability of SME/HDP businesses on these platforms;

•              The rationale for, and impact of, higher commissions and listing fees charged to small restaurants, auto dealers and estate agents relative to larger national chains on food delivery platforms and online classifieds (automotive and property);

•              The necessity for businesses to discount or offer promotions on the platforms in order to get consumer visibility, and the pressure from platforms to do so;  

•              The fairness of platform terms and conditions, 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 by SA businesses on global platforms. 

The FSOI also raises issues relating to platform competition, such as:

•              The rationale for, and impact of, price-parity clauses imposed on businesses (i.e. a requirement to price no less favourably on a platform relative to other platforms & channels) in eCommerce, delivery and travel & accommodation platforms;

•              The impact of massive search engine marketing and consumer promotions by leading platforms on the ability of emerging platforms and individual businesses to get consumer visibility online;   

•              The reticence of prominent brands or larger business chains to support emerging platforms and the impact of this on consumer adoption and platform growth.

The Inquiry has also issued a clarification note on the scope of the Inquiry following queries from a number of online platforms. The note confirms that foreign-based online platforms that facilitate transactions with South African consumers or businesses fall within the scope of the Inquiry even if they have no physical presence in South Africa. Metasearch engines such as comparative accommodation (e.g. Trivago) and shopping sites (e.g. Google Shopping) that direct consumers to businesses to make purchases also fall within the Inquiry scope, as do alternative accommodation platforms (e.g. Airbnb) where individual listings may not always be incorporated as a business.      

Further, the Inquiry would like to hear from more businesses that make use of these platforms to understand their experience, in particular the extent of platform dependency, the restrictions placed on their business by platforms; the perceived fairness of search algorithms, platform terms & conditions, and platform commission fees; as well as the impact on their business of any unfair treatment. 

To assist businesses using these platforms to have their voice heard, the Inquiry has released a further version of its online survey which requires only 20 minutes to complete. The survey is available on the Inquiry website (http://www.compcom.co.za/online-intermediation-platforms-market-inquiry/) and the Inquiry has commissioned Redflank to administer the survey amongst businesses using these platforms. All survey responses will be kept confidential. Businesses may also respond to the FSOI and contact the Inquiry directly through email (oipmi@compcom.co.za). 

 

Issued by The Competition Commission of South Africa