Africa News Bulletin

GovChat: SA competition watchdog wants WhatsApp to cough up for abusing market dominance

South Africa’s Competition Commission found that Meta (previously known as Facebook), via its subsidiary WhatsApp, is abusing its dominance. The watchdog now wants the Competition Tribunal to impose its “maximum penalty” – a fine of 10% of the US social media giant’s local turnover.

It has referred Meta, WhatsApp and Facebook South Africa to the Tribunal for prosecution.

The commission investigated a complaint by government’s digital platform GovChat against the companies, which wanted to remove the platform from the WhatsApp business functionality.

The commission found that Meta was abusing its market dominance by threatening to remove GovChat from its WhatsApp Business Application Programming Interface (WhatsApp Business API). It has asked the Tribunal to interdict the groups from removing GovChat from the WhatsApp Business API and to declare void certain exclusionary terms and conditions for access to the WhatsApp Business API.

The commission found that WhatsApp wanted imposed exclusionary terms and conditions, mainly restrictions on the use of data, on GovChat.

The commission says that removing GovChat from the WhatsApp Business API is in contravention of the Competition Act, which prohibits a dominant firm from abusing its dominance by engaging in exclusionary conduct geared at preventing competitors to participate in a market.

The WhatsApp Business API enables businesses and governments to send messages and make use of automation and chatbots.

Launched in 2018, GovChat allows citizens to report potholes and other service delivery issues with national, provincial, and local authorities. It also sends information about Covid-19 system tracking, testing and vaccination, as well as providing online applications for social relief and distress grants.

The commission says hundreds of thousands of messages are sent on via the app every day.

GovChat is dependent on its continued access to the WhatsApp Business API, the commission found.

“The intended off-boarding 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,” says the commission.

The commission found that the terms and conditions governing access to the WhatsApp Business API are designed to shield and insulate the company from potential competition, “such as the potential competition presented by the GovChat and enormous data it has been able to harvest which enables it to develop new services and products”.

“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 off-board GovChat from the WhatsApp Business API and its exclusionary terms of data usage are untenable,” Competition Commissioner Tembinkosi Bonakele said.

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