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The South African Competition Commission Prosecutes Multinational Tech Company Meta

posted 2 years ago

On 14 March 2022, the South African Competition Commission (“SACC”) announced its prosecution and referral of Meta Platforms Inc (“META”) and its affiliates, WhatsApp Inc and Facebook South Africa (from here on collectively referred to as “Facebook”), for alleged abuse of dominance.

The SACC alleges that Facebook abused its dominance through its attempts to off-board Gov Chat, (a platform connecting the South African Government and the citizens), from the WhatsApp Business Application Programming Interface (“WhatsApp Business API”), which would foreclose Gov Chat who is reliant on the WhatsApp platform for its business model. The SACC noted that Facebook had clearly indicated its intention to dissuade potential competitors by including exclusionary terms and conditions, relating to data protection with selective application to its competitors.

The SACC alleges the prohibited conduct includes a refusal to supply scarce goods and/or services to competitors or customers when it is economically viable to ensure such supply. In addition, the SACC alleges that the provisions prevent dominant firms from refusing to provide competitors with access to essential amenities/scarce goods or services where economically feasible to do so.

The purpose of the WhatsApp Business API includes enabling firms to construct chatbots and distribute messages at scale. In this regard, the Gov Chat platform was primarily initiated as a mechanism to allow the broader public to connect all spheres of Government actively and effectively, and thereby bring various crucial issues to the fore. This platform allowed the Government to stay informed in relation to the most relevant concerns related to service delivery as well as provide it with crucial insights required to identify and tackle these issues.

The platform would serve to enable the Government to impart vital information to citizens, which has proven particularly useful in light of the need for Covid-19-related communications to reach the populace. Gov Chat certainly serves a great public interest function through its promotion of service delivery and confronting public concerns.

As a result, the SACC requested in its referral that the Competition Tribunal interdicts Facebook from its intended off-boarding of Gov Chat from the WhatsApp Business API, and to further penalise Facebook and META with the highest penalty, which is 10% of the collective turnover.

From an international perspective, the SACC’s decision demonstrates a clear intent to regulate digital markets. As the SACC continues to place hefty reliance on public interest factors, these public interest considerations are likely to present themselves in the current matter because of the repercussions related to the removal of Gov Chat from the WhatsApp Business API. More specifically, these consequences could include a deterioration in service delivery and barriers for the public to access essential information from the Government.

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