South Africa to punish Meta for abuse of dominance

South Africa to punish Meta for abuse of dominance

The Competition Commission of South Africa (the Commission) has referred to the Competition Tribunal for the prosecution of social media giant, Meta Platforms and its subsidiaries, WhatsApp Inc and Facebook South Africa (collectively referred to as Facebook) for abuse of dominance.

The Commission has asked the Tribunal to impose a maximum penalty against Meta Platforms, WhatsApp and Facebook South Africa which is 10% of their collective turnover.

Facebook is accused of planning since 2020, to offboard GovChat from the WhatsApp Business Application Programming Interface (WhatsApp Business API). GovChat is a technology start-up that connects government and citizens.

The second charge facing Facebook is the imposition and/or selectively enforced exclusionary terms and conditions regulating access to the WhatsApp Business API, mainly restrictions on the use of data.

The Commission says this is in contravention of the Competition Act, sections 8(1)(d)(ii), 8(1)(c) and in the further alternative 8(1)(b).

The Act prohibits a dominant firm from abusing its dominance by engaging in exclusionary conduct geared at preventing competitors or potential competitors from entering into, participating, and expanding in a market.

“Access to digital markets has now become indispensable. In turn, access to digital markets is dependent on access to digital platforms including, as in this case, access to an important digital communication platform – the WhatsApp Business API. Over and above, data is everything in digital platform markets,” said Tembinkosi Bonakele, Commissioner at the Competition Commission.

The WhatsApp Business API enables medium and large businesses (and government) to, among other things, message at scale, makes use of advanced automation, integrations with existing eCommerce, building chatbots and tracking metrics.

Launched in 2018 the GovChat platform enables the public to engage with all spheres of government. It also enables government to disseminate critical information to the public en masse such as information related to Covid-19 system tracking, testing and vaccination.

The GovChat is dependent on its continued access to the WhatsApp Business API.

The intended offboarding of GovChat from the WhatsApp Business API will harm consumer welfare by removing the efficiency of the GovChat which allows the public to communicate with multiple government bodies through a single platform and will also deprive government of the current services (and future services such as mobile payment solutions) offered by the GovChat, said the Commission.

In addition to the maximum penalty recommended, the Commission has requested the Tribunal to interdict Facebook from off-boarding GovChat from the WhatsApp Business API and to declare void certain exclusionary terms and conditions for access to the WhatsApp Business API.

“In view of the important services provided by GovChat, which provides real time interface between government and the public, and the benefits to competition presented by its business model, Facebook’s decision to offboard GovChat from the WhatsApp Business API and its exclusionary .terms of data usage are untenable,” concluded Bonakele”