Business Maverick


Competition Commission missed the point; there are much larger competitors, says Takealot

Competition Commission missed the point; there are much larger competitors, says Takealot
takealot pick up point in Midrand on 20 July 2022 Photo:Felix Dlangamandla/Daily Maverick

The commission failed to consider competition from bigger brick-and-mortar players, as well as outfits like Shein, Wish and AliExpress, which operate outside local consumer protection laws.

Platforms targeted in the Competition Commission’s Online Intermediation Platforms Market Inquiry (OIPMI) kept their cards close to their chest this week after the commission’s final report recommended sweeping changes to the way Google, Takealot, Property24, and others do business in South Africa.

On Monday, the commission released its final OIPMI report, almost 25 months after it launched the inquiry, demanding that a range of service providers ease competition for small and previously disadvantaged operators. 

The inquiry was initially launched on 19 May 2021 because the commission was convinced big players had an unfair advantage over SMEs and historically disadvantaged persons (HDPs) in these markets. 

The platforms shaping B2C platform competition, as alleged, include ecommerce, online travel agencies, food delivery, app stores, property and automotive classifieds. 

The biggest loser in this is Takealot. 

In essence, the commission has called for fundamental changes to its business model, which require it to split its marketplace and retail operations; change how it displays products; stop forcing pricing limits on marketplace retailers and boost HDP businesses. 

The platform’s next steps are uncertain, but judging by the mood of some of the responses, it appears unlikely that the report will go unchallenged.

Takealot at first issued a brief statement, saying only it “notes the publication of the final report and is considering the findings”.

On Thursday, Takealot told Daily Maverick the group had cooperated fully throughout the two-year market inquiry process and proactively engaged with the Competition Commission, “in the hope that our business models, the way we conduct our business and the markets we operate in, would be fairly reviewed to further benefit South African consumers and SMMEs”.

“While we are supportive of the Competition Commission’s work around the market inquiry to protect SMMEs and consumers, we are disappointed with some of the commission’s findings in the final report which are incorrectly premised on the notion that Takealot and Mr D are ‘leading platforms’, when they compete in dynamic markets with much larger competitors in which consumers have considerable choice.”

Takealot said it naturally competes with other, much larger, brick-and-mortar retailers who have a sizeable and growing presence online but are excluded from complying with the requirements of the commission’s report. 

“ also forms a small part – less than 2% – of the overall retail market in South Africa. Equally, the same reality applies to Mr D, which is a very small contributor to any restaurant’s revenues.”

Some of its online competitors, which are not named in the report – Shein, Wish and AliExpress – are  making massive inroads in the South African market, operating outside local consumer protection laws without a physical presence in the country and not paying tax, but posing a significant competitive threat.

As a proudly South African business, with a proven track record of enabling over 18,000 SMEs, as well as supporting 33,000 jobs, Takealot said it had achieved all this in just 13 years operating in a highly competitive and dynamic environment. 

“If allowed to continue to thrive and fairly compete, the opportunities for job creation and SME enablement would be exponential.”

The group said it would carefully consider the final report and take the necessary steps to ensure its businesses are able to effectively compete and grow, and that inclusive economic growth becomes a reality. 

“Takealot Group offers SMEs affordable access to a national marketplace to help them scale and thrive. We are committed to building a business that puts the interests of consumers first, ensuring that all South Africans, regardless of geography, have access to quality retail products at affordable prices.” 

Other Naspers businesses named in the report are also considering their options. 

JP Farinha, OLX SA country manager, said: “Property24 and AutoTrader note the publication of the Competition Commission’s OIPMI final report and are considering the findings.” said: “We are disappointed with the findings of the South African Competition Commission as we feel strongly that our practices guarantee a transparent and consistent experience for consumers. 

“At it is a priority for us to keep prices competitive and allow for a consistent price comparison experience for travellers, while simultaneously offering benefits to accommodation partners who continue to benefit from much-needed customer demand we can bring them from around the world. 

“We continue to have an open and positive dialogue with the South African Competition Commission, while we consider our next steps.” 

And Google, which initially faced a more stringent clampdown, said: “South Africans look to Google for relevant and high-quality search results that they can trust. This creates choice and generates millions of free visits to South African sites and businesses across the web every day. We engaged with the South African Competition Commission throughout the inquiry and are currently reviewing the final report.”

Parties who want to appeal have 20 days in which to do so. 

The commission had originally planned to force Google, Apple and other websites to only show organic results at the top of the search function and to clearly demarcate paid-for content, but there is no such requirement in the final report.

Google has been in the crosshairs of competition authorities elsewhere too. In September 2022, Google lost its appeal of a record-setting antitrust ruling related to Android and online search, but its fine of €4.34-billion was cut to €4.12-billion. 

In March this year, Google lost an appeal of a $162-million fine in India in another antitrust case related to its requirement that device manufacturers must pre-install Google Mobile Suite and the prominent placement of those apps. 

Google was forced to make several changes to its business practices, reported Techcrunch. DM

The Competition Commission report in brief:


Takealot is the biggest player in the online sales space. Its “narrow price parity” prevents sellers from lower pricing on their own websites, which prevents them from reducing their dependency on Takealot.

Takealot, in opening its online marketplace to third-party sellers, also trades extensively through the Takealot Retail division, which the inquiry said was a conflict of interest.

To address these distortions arising from the conflict of interest, Takealot must separate its Retail division from its Marketplace operations and prevent retail services from accessing seller data and stopping sellers from competing for certain brands.

It must also introduce a 60-day dispute resolution process for marketplace sellers’ complaints and its Buy Box must be re-engineered to reflect the cheapest (regardless of delivery time) and fastest options for the consumer.

It also has to implement an HDP programme that provides personalised onboarding, while waiving subscription fees and giving at least R2,000 advertising credit for use in the first three months, plus offering promotional rebates.

Touching on the entry of Amazon, the inquiry said while the international giant has not entered South Africa, “were it or any other large eCommerce player to do so, they will similarly be expected to comply with similar provisions as set out for Takealot”. 

Google Search

Google Search has a de facto monopoly, accounting for over 90% of all general searches across desktop, tablet and mobile devices. 

Google Search’s dominance and business model distort platform competition as small and new platforms struggle for visibility and customer acquisition.

To address this, the commission wants smaller platforms to have better paid and organic result visibility. Google must also introduce an SA flag identifier and SA platform search filter.

Google must provide R180-million in advertising credits for small platforms to use in customer acquisition, along with free training to optimise advertising campaigns and a further R150-million in training, product support and other measures for SME and black-owned online firms. 

Travel and accommodation is the world’s largest online travel agent for traditional hotel and accommodation establishments “by a huge distance”, with Airbnb only being large in alternative accommodation. 

The commission said imposes “wide price parity” conditions on hotels and other establishments which require them to offer room prices to that are no less favourable than the room price offered to other establishments.

The commission wants these obligations to be removed.


On the Apple App Store and Google Play Store, which account for most mobile users, app downloads and revenues earned in SA, the commission said these giants are unconstrained in the commission fees they charge paid app developers and that the anti-steering rule limits competition. 

It has ordered that Google Play and Apple App stores stop preventing apps from directing consumers to pay on the app’s own website, and to ensure continued free use by consumers of content purchased from that website. 

It wants Google and Apple to provide a South African curation of apps on their app stores and advertising credits to local app developers. 

Online classifieds

Within the classified verticals, property and automotive are the biggest categories, with Property24 and Private Property the biggest platforms in the former, while Autotrader and have over 80% share between them in the automotive sector.

Private Property’s partnership with the Estate Agency Property Portal Company, facilitated by the industry association, Rebosa, allowed it to secure and lock in most of the listings, the inquiry said.

These sites must offer lower rates to SMEs or small estate agents who advertise on their platforms.

Food delivery

Restaurant chains cannot prohibit their franchisees from contracting with local or national delivery services that are not approved by the head office.

Uber Eats and Mr D Food are also required to notify consumers that they charge restaurants a commission fee for their service, and in-store pricing may differ.

Transparent advertising

All South African platforms must label paid-for listings or those that have been boosted in ranking position as “promoted”, “sponsored” or “ad”, in line with the Advertising Regulatory Board’s Code of Advertising Practice. DM


Comments - Please in order to comment.

  • A Fer says:

    As usual, the competition commission demonstrates its complete lack of understanding of business and tries to impose socialist policies on business.
    Will just result in more international and local businesses giving up in SA and looking for greener pastures elsewhere

  • Deon Botha-Richards says:

    So basically if Google and Apple object to hosting apps that don’t generate revenue for them they will simply remove them from the store. Thus reducing competition among apps and limiting users from using apps unless they gaol break their phones.

    Most of these requirements will do nothing to improve competition. They will only limit customer experience and increase costs.

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