The Competition Commission recently published its report, alongside intrusive implications, on South Africa’s e-commerce market.
The commission should rather promote growth by cutting anti-business regulations and regulatory agencies, according to the Free Market Foundation (FMF).
Instead, the commission has ordered businesses like Takealot to split up, so that sale platforms can be separated from the providers of goods. The commission takes issue with Takealot favouring its own products over those of third-parties on the Takealot.com website.
The FMF plans to write to the commission’s chairperson to note its protest against the commission’s 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. The Competition Commission is punishing this sector for its rapid growth and desire to diversify,” says FMF legal researcher Zakhele Mthembu.
“Instead of looking at obvious barriers like 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.”
The “self-preferencing” that companies like Takealot perform is a legitimate exercise of its constitutionally recognised and protected property rights, Mthembu says, adding that interfering in the internal workings of private businesses disincentivises the economic growth and dynamism South Africa desperately needs.