CompCom ‘punishing’ successful online companies

The Free Market Foundation has accused the Competition Commission of “punishing” e-commerce companies and other online players for being successful enterprises.

This comes after the commission last week released a voluminous final report on “online intermediation markets” in South Africa, in which it took aim at Google, Takealot, Mr D Food, Uber Eats and other internet-based businesses over concerns that they are abusing their market positions.

The Free Market Foundation said that instead of punishing these firms, the commission should encourage growth. It should be promoting growth by cutting anti-business regulations and regulatory agencies, it added.

Instead, the commission has ordered businesses like Takealot to be split up. It has taken issue with Takealot allegedly favouring its own products over those of third-party sellers on its platform.

The foundation said it will write to commission chair Doris Tshepe to voice its protest against the “misapplication of the principles that underly an open and competitive market economy”.

“The e-commerce sector is one of the shining lights of South Africa’s economy, and the Competition Commission is punishing this sector for its rapid growth and desire to diversify,” said Free Market Foundation legal researcher Zakhele Mthembu. “Instead of looking at obvious barriers such as regulations and legislation that make doing business in South Africa very burdensome, the commission obsesses over business advantages that firms acquired voluntarily through market interactions.”

‘Self-preferencing’

The “self-preferencing” that companies like Takealot perform is a legitimate exercise of their constitutionally recognised and protected property rights, Zakhele said. “No competitor has a right to market their goods on Takealot’s platform. Takealot offers a voluntary service that has benefited countless buyers and sellers throughout South Africa. It has only been able to do this because it was allowed the necessary freedom of enterprise to be self-directing.

Read: Takealot pans commission over competition findings

“Interfering in the internal workings of private businesses disincentivises the economic growth and dynamism South Africa desperately needs,” he added. “The Competition Commission and its crusade against private business is undermining South Africa’s recovery from a policy-induced economic malaise.”  — © 2023 NewsCentral Media

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