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COMPETITION LAWS

Facebook’s parent company in trouble with SA competition watchdog

By our News Team | 2022

South Africa’s Competition Commission wants Meta to be prosecuted over alleged abuse of its dominant market position.

Meta Platforms – the company that owns Facebook and WhatsApp among others – is in trouble in South Africa, where the country’s Competition Commission has referred it to the Competition Tribunal for the prosecution for what it says is abuse of its dominant position.

“The Commission alleges that Facebook, in the first instance, … decided [on] or about July 2020 and expressed an ongoing intention to offboard GovChat and #LetsTalk, a technology startup that connects government and citizens, from the WhatsApp Business Application Programming Interface (WhatsApp Business API),” the commission said in a media statement.

Competition Laws

Photo by Luca Sammarco from Pexels

“In the second instance, Facebook has imposed and/or selectively enforced exclusionary terms and conditions regulating access to the WhatsApp Business API, mainly restrictions on the use of data.”

These actions are alleged to be in contravention of the Competition Act, in that the act prohibits a dominant firm from abusing its dominance by engaging in exclusionary conduct that is geared at preventing competitors or potential competitors from entering into, participating, and expanding in a market.

The WhatsApp Business API enables medium and large organisations to, among other things, message at scale. It makes use of advanced automation, as well as integrations with existing e-commerce, chatbots and tracking metrics.

Service connects ordinary citizens with government

South Africa’s GovChat platform is aimed at enabling ordinary citizens and various government agencies to communicate on issues such as social grant payments, Covid-19 measures and infrastructure problems like potholes on roads.

“The GovChat is dependent on its continued access to the WhatsApp Business API,” the Competition Commission noted in its statement.

“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 the government of the current services (and future services such as mobile payment solutions) offered by the GovChat.”

It added that: “WhatsApp Messenger enjoys significant economies of scale and network effects advantages. Consequently, the Commission also found that the terms and conditions governing access to the WhatsApp Business API are designed to shield and insulate Facebook from potential competition, such as the potential competition presented by the GovChat, and [the] enormous data it has been able to harvest which enables it to develop new services and products.”

Meta and its social media platforms, most notably Facebook, have come under increasing pressure in various countries as regulators become concerned at what they believe is abuse of a dominant market position.

Google has been facing similar challenges. For example, an Australian Competition and Consumer Commission inquiry into the advertising technology – or ‘ad tech’ – sector identified significant competition concerns and likely harms to publishers, advertisers and, ultimately, consumers.

The inquiry found that Google had used its position to preference its own services and shield them from competition. “Google prevents rival ad-tech services from accessing ads on YouTube, providing its own ad-tech services with an important advantage,” the report stated.

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