News

Ina Opperman
Business Journalist
4 minute read
19 Oct 2021
6:26 pm

Public hearings into online platforms start on 2 November

Ina Opperman

Now that most of us are shopping on online platforms, it is important to know what the challenges are for small businesses and consumers.

Image: iStock

Public hearings into online platforms start on 2 November and will continue until 19 November, according to an announcement of the Competition Commission’s inquiry that initiated the hearings earlier this year.

These virtual hearings will enable the Inquiry Panel to engage directly with stakeholders about their submissions around how online platform markets operate, identified issues and any remedial actions stakeholders consider necessary to address these issues.

ALSO READ: Competition Commission calls for participation in online market inquiry

Why public hearings?

Holding these hearings in public will ensure a fair and transparent process to inform consumers of the issues and debates. The Inquiry also commends the platforms and business users that have committed to participate by sending senior business representatives to share their insights on the digital economy and debate the emerging issues around the online economy.

However, the Inquiry said in a statement that it is disappointed that a small minority of global platforms have elected not to participate in the public hearings despite their material presence in the country.

South African consumers and businesses have embraced online channels for shopping, food delivery, bookings and research before big purchases, such as cars or homes, as well as downloading apps for almost every aspect of digital life.

In response to the growing importance of the online economy and competition concerns emerging in other countries, the Competition Commission launched a probe into competition and participation in the online economy earlier this year to ensure that consumers and businesses benefit from competition among online platforms and that small and historically disadvantaged business also get to participate fairly in the online economy.

ALSO READ: Online shopping in South Africa continues to grow

First phase of online platforms inquiry completed

The Inquiry completed the first phase of information gathering and the insights were used to compile a Further Statement of Issues (FSOI) which identified market dynamics and practices that may potentially hinder competition or result in unfair treatment of businesses using popular online platforms.

These issues are available on the Inquiry website and include:

  • The extensive and growing use of sponsored ranking, such as payments to appear higher up on consumer search results and its impact on consumer choice, as well as how easy or difficult it is to find small or historically disadvantaged businesses on these platforms.
  • The reason for and impact of higher commissions and listing fees for small restaurants, auto dealers and estate agents compared to larger national chains on food delivery platforms and online classifieds.
  • The necessity for businesses to discount or offer promotions on the platforms 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.
  • The general lack of platform initiatives to support the transformation of the online economy and the increased involvement of local businesses on global platforms.
  • The reason for and impact of price-parity clauses imposed on businesses, such as requirements to not offer lower prices on some platforms.
  • The impact of leading platforms’ massive search engine marketing and consumer promotions on the ability of emerging platforms and individual businesses to get consumer visibility online.
  • The reluctance of prominent brands or larger business chains to support emerging platforms and its impact on consumer adoption and platform growth.

ALSO READ: Six South African online fashion stores you didn’t know about

This is how you can participate in the online platform inquiry

There are also other ways for stakeholders to participate, such as following the Inquiry weblink, to a survey for businesses that use online channels to reach consumers.

The Inquiry says it is particularly interested in understanding the experience of business users, including the extent of platform dependency, the restrictions platforms place on their businesses, the perceived fairness of search algorithms, platform terms and conditions and platform commission fees, as well as the impact of any fair treatment on their businesses.

It is essential that businesses do the survey to have their voices heard. Stakeholders can also email written submissions to the Inquiry.

Although the Online Platforms Market Inquiry today released the schedule of participants for the public hearings, but it is still confirming time slots with participants and the final schedule will be published on 27 October 2021.

The public hearings will be virtual and the public can watch the hearings on the Competition Commission’s YouTube channel.