The South African National Consumer Commission (“NCC”) recently confirmed its investigation into Shein and Temu regarding certain of the e-commerce giants’ operations in the nation. The NCC’s inquiry will assess whether Temu and Shein are complying with the Consumer Protection Act (“CPA”), with a specific focus on their marketing practices; the safety and quality of products sold; and the accuracy and fairness of their digital-market representations.
Prudence Moilwa, the NCC’s executive head, emphasised that the NCC will undertake a rigorous assessment of their compliance with the CPA, sending a clear message to the e-commerce industry that the NCC will enforce accountability.
The CPA is a strong legislative framework; however, it is increasingly tested by the rapid technological developments that shape e-commerce business models. As innovation progresses faster than regulation, the CPA’s effectiveness is limited in addressing modern consumer protection concerns. The NCC’s intention is not to discourage innovation; however, notes that innovation is expected to take place within the lawful framework.
Additionally, the NCC has expressed growing concern about Temu’s and Shein’s use of algorithms to drive consumer engagement, particularly in relation to South Africa’s Protection of Personal Information Act. The key issue is the extent to which users are adequately informed about how their data is processed and whether they meaningfully consent to such use. These concerns also relate to the platforms’ data-mining practices and the use of automated systems to determine what consumers see, interact with, and ultimately purchase. In effect, the algorithms employed by these platforms enable highly targeted marketing, which may undermine consumer choice and preference.
Overall, the investigation is a call from the NCC for the e-commerce world to practice basic transparency.
This latest action by the NCC follows closely on the South African Competition Commission (“SACC)’s separate enforcement measures related to tax compliance by Temu and Shein, which focused on alleged under-declaration of customs duties and improper import-tax structures. Together, the two investigations suggest a coordinated tightening of oversight over foreign e-commerce operators entering the South African market at scale.
GovChat is a civic-tech platform, launched in 2018, that allows South Africans to use WhatsApp to communicate with government departments, apply for grants and report municipal service breakdowns. Conflict arose in 2020 when Meta (the parent company of WhatsApp) attempted to off-load GovChat from WhatsApp, claiming violations of its data and user-protection policies. In 2022, the matter was referred to the Competition Commission, in which GovChat claimed that Meta was engaging in an abuse of dominance. The Competition Commission ruled in favour of GovChat and ordered an interim interdict to stop the proposed off-loading of the platform.
The latest interlocutory hearing at the Competition Tribunal (the “Competition Tribunal Hearing”) began on 1 December 2025, in which Meta was ordered to clarify its e-discovery process. Technology-Assisted Review (TAR) is an innovative AI tool which Meta uses in its e-discoveryprocess. Although the Competition Tribunal did not reject this tool, they demanded human-led transparency. The focus is on who defined the scope of the search, how custodians were selected and whether the process has been adequately documented. Meta complied with the Competition Tribunals request, however, GovChat argued that unless Meta discloses their entire e-discovery process, there is no reliable way to verify that all relevant documentation has been produced. The ruling was adjourned, and Meta has been required to file a comprehensive affidavit of the entire e-discovery process.
On day 2 of the Competition Tribunal Hearing, the focus was on disputes concerning discovery, the need for transparency and the extent to which a dormant company can provide. Meta’s legal representatives argued that GovChat did not fully produce all their documents during discovery and questioned whether their efforts were reasonable. GovChat stated that they are essentially a dormant company, which exists only on the books, but has no assets or documents, and that they have gone beyond the standard requirements of discovery. GovChat argued in response that certain documents could not be produced due to only certain custodians being contacted, and their emails could not be produced due to their email repository being deleted after non-payment. They further highlighted a foundational legal principle in that a sworn discovery affidavit is accepted as true unless deliberate dishonesty has been provided and, therefore, their explanation of the discovery documents must be accepted by the Tribunal. Capital Appreciation (“CA”) is the primary financer for GovChat and Meta had issued summons against CA’s CEO. GovChat argued that the summons was defective in that it does not comply with the procedural requirements and they maintained their position that they had already provided the necessary documents.
The proceedings are still ongoing, and the Tribunal has yet to rule on the discovery and summons application. As the proceedings resume, the Tribunal decisions will not only determine whether the evidence will be admissible but will also reshape how South African Competition Law will treat evidence from Big Tech companies. For civic-tech platforms, the developments will reinforce that access to public digital services such as GovChat should not be determined by a corporate decision.
In South Africa, exemptions under the Competition Act 89 of 1998 (“the Act”) provide a critical mechanism for firms to engage in conduct that might otherwise breach the Act’s prohibitions, where such conduct supports broader policy goals. Exemptions are considered under section 10, with block exemptions specifically authorised under section 10(10). These exemptions aim to promote efficiencies, support government policy, safeguard employment, or advance small businesses and historically disadvantaged individuals.
Since the COVID-19 pandemic, there has been a visible evolution in the types and objectives of exemptions granted by the South African Competition Commission (“SACC”), reflecting South Africa’s shifting economic priorities and ongoing structural challenges.
From Pandemic Emergency to Structural Interventions
The COVID-19 pandemic saw the SACC issue urgent exemptions, such as those for private healthcare providers, banks, retail landlords, and hospitality businesses to enable crisis cooperation. These exemptions were time-bound, tightly monitored, and have since expired. They remain useful precedent for how competition law can be flexibly applied in national emergencies.
However, more recent exemptions illustrate a pivot towards structural or developmental goals. Notable recent examples include:
Ports and Rail Exemption (May 2025)
This exemption directly tackles one of the most significant drags on the South African economy, its dysfunctional logistics system. Chronic inefficiencies at Transnet-owned ports and on the freight rail network have cost the economy billions in lost export revenue. This isn’t merely about allowing cooperation, it’s an explicit attempt to use competition law to solve a market failure.
The exemption encourages private terminal operators (such as those in Durban and Ngqura) and private rail operators to collaborate in ways that would normally be considered anti-competitive (such as coordinating schedules, sharing infrastructure planning data, jointly investing in solutions) to optimise the entire supply chain from mine and factory to port.
This means exporters in sectors like mining and agriculture can anticipate reduced delays and owner spoilage rates, enhancing their global competitiveness. For the operators themselves, it allows for unprecedented cooperation with competitors to optimise the entire supply chain, though they must vigilantly avoid any discussion that veer into product pricing or market allocation, which remain strictly illegal.[1]
Sugar Industry Exemption (May 2025)
Functioning as a structured rescue plan formalised through the Sugar Master Plan, this exemption is designed to ensure the survival and transformation of a critically important industry. It permits stakeholders across the value chain, from lager growers to millers, to coordinate on production levels, collectively plan for diversification into biofuels, and present a unified front in negotiations.
For sugar businesses, this means a chance to stabilise the industry and protect livelihoods, particularly for small-scale cane farmers. The practical compliance imperative is stringent, participants must meticulously document that all coordinated activities are for industry restructuring and not for illicit profit-maximisation at the expense of consumers.[2]
SMME Block Exemption (January 2025)
This block exemption is a powerful tool for levelling the playing field for Small, Micro and Medium Enterprises (“SMMEs”). It recognises that these players often cannot challenge established market structures alone and allows them to band together to achieve scale.
This means SMMEs can legally form buying groups to negotiate bulk purchase discounts, create joint ventures to bid for large tenders, and collaborate on shared logistics and marketing networks to drastically reduce costs. For larger corporations, this necessitates preparedness to engage with more organised and powerful SMME consortiums. The critical compliance rule is that the exemption only protects qualifying SMMEs, larger firms cannot use an SMME partner as a shield for cartel conduct.[3]
Energy and Industrial Exemptions
These exemptions represent a critical tool for addressing broad-based economic constraints, with a particular focus on the ongoing energy crisis and its ripple effects. They provide a collaborative framework for firms within key supply chains and strategic industrial sectors to coordinate in ways that would normally be prohibited.
This could mean manufacturers and suppliers in a critical industry such as steel, chemicals, or automative components being permitted to collaborate on optimising energy usage during load-shedding, sharing logistics for essential inputs, or jointly securing raw materials to ensure continued production and prevent factory closures.
For businesses, this exemption is designed to enhance economic stability and prevent a decline in productive capacity by allowing a degree of crisis management and operational coordination that safeguards entire value chains vital to South Africa’s industrial policy and recovery. The essential compliance imperative is that any cooperation must be directly linked to overcoming the identified supply chain or energy constraints and must not be used as a cover for market division, price-fixing, or other blatantly anti-competitive conduct.[4]
Banking and Insurance Exemption (July 2025)
This is a forward-looking exemption that aligns competition policy with national climate goals, acknowledging that financing a ‘just transition’ is a collective action problem. It permits banks and insurers to collaborate on developing common standards, definitions, and data-sharing frameworks for sustainable finance.
This means financial institutions can pool data on climate-related risks and develop a common South African taxonomy for ‘green’ assets without fear of prosecution, which should lead to more available and affordable financing for businesses seeking loans for renewable energy or ESG projects. The crucial limitation is that collaboration is restricted to framework development, any coordination on interest rates, premiums, or customer allocation remains absolutely prohibited.
Draft Block Exemption for the Promotion of Exports (August 2025)
In August 2025, the Department of Trade, Industry and Competition published a Draft Block Exemption for the Promotion of Exports. This exemption, still under consultation, seeks to facilitate collaboration among exporters and industry players to overcome structural barriers to accessing foreign markets. It is framed under section 10(10) of the Act and recognises that South Africa’s export competitiveness is often constrained by high logistics costs, fragmented industry structures, and limited bargaining power in international markets.
The exemption is intended to permit cooperative initiatives around joint marketing, shared logistics, standard-setting, and market development, provided that such conduct demonstrably enhances South Africa’s export performance without undermining domestic competition. If finalised, this exemption could become a key instrument to support government’s broader trade and industrial policy agenda, including the drive to increase manufactured exports and deepen regional trade integration under the African Continental Free Trade Area (“AfCFTA”).[5]
Understanding Block Exemptions under Section 10(10)
Section 10 of the Act allows firms to apply to the SACC to exempt them from horizontal agreements typically regulated by section 4 of the Act, or vertical agreements regulated by section 5 of the Act where the agreement contributes towards the following objectives:
maintenance or promotion of exports;
promotion of effective entry, participation in or expansion in the market by small and medium enterprises or firms owned by historically disadvantaged persons;
change in productive capacity necessary to stop decline in an industry;
economic development, growth, transformation or stability of any regulated industry; or
competition and efficiency gains that promote employment or industrial expansion.
The recent SMME Block Exemption echoes earlier block exemptions issued during COVID-19 but represents a shift towards more enduring tools that facilitate inclusive growth. Other possible future candidates for block exemptions include sectors under Master Plans, such as poultry, automotive, and steel, where coordinated action may be needed to meet transformation or industrial policy targets.
Evolving Patterns: Then and Now
While COVID-era exemptions demonstrated the SACC’s agility during crisis management, current exemptions highlight a maturing approach. The SACC increasingly uses exemptions to:
Tackle persistent structural inefficiencies;
Strengthen value chains aligned with industrial policy;
Support small and historically disadvantaged firms; and
Balance economic competitiveness with sustainability and localisation goals.
Risks and Compliance Imperatives
Nonetheless, exemptions remain the exception, not the rule. Historic concerns persist that exemptions, if poorly designed or inadequately monitored, may entrench collusive behaviour or dampen competition. The SACC’s use of clear conditions, sunset clauses, and robust reporting obligations is therefore critical.
Looking Ahead
South Africa’s competition law framework continues to evolve in response to new economic realities. For firms seeking exemptions, the message is clear: any coordination must demonstrably advance the public interest and remain tightly circumscribed within the legal safeguards of the Act.
With the recent wave of block exemptions and sector-specific approvals, businesses, advisors, and stakeholders should actively monitor exemption trends, sector-specific conditions, and the SACC’s enforcement approach ensuring that collaboration serves national priorities without eroding competitive markets in the long term.
The Competition Commission of South Africa (“the Commission”) released a Cost-of-Living Report (“The Report”) on 4 September 2025, setting out a structured, data-driven assessment of affordability pressures faced by South African households, with particular focus on those low-income consumers predominantly impacted by consistently high inflation rates. Its aim is to provide insights into the affordability of basic goods and services so that individuals, households, businesses, and policymakers can assess financial capacity and understand how price movements affect living standards. This is in alignment with the Presidency’s Strategic Plan that identifies tackling the high cost of living as a priority.
The current cost-of-living crisis is framed against entrenched domestic challenges, rising food, fuel and electricity prices against the backdrop of an ongoing energy crisis and interest rate increases that have lifted debt servicing costs in an environment where growth in household income has maintained the same pace.
Background and Goal of the COL Report
The COL Report stems from the Commission’s earlier Essential Food Price Monitoring(“EFPM”) programme, first published in July 2020 to track the prices of staple foods across the value chain, from farm to retail, and to analyse price transmission between producers, processors and retailers. Recognising shifting expenditure patterns and growing inequality, the Commission has expanded the scope of the EFPM, rebranding it as the COL Report. The new format retains essential food price monitoring while including those key non-food items that have a significant impact on lower income households.
As James Hodge, the chief economist at the Commission said:
“This analysis plays a crucial role in identifying the economic pressures various socio-economic groups, particularly low-income households, experience in a time of fluctuating prices and growing inequality.”[1]
The COL Report’s overarching intent is to highlight the affordability of basic goods and services in South Africa and to identify the underlying drivers of the cost-of-living crisis.
The COL Report tracks non-food necessities (e.g., electricity, water, rentals, healthcare, minibus taxi fares and petrol, funeral policies, public school fees, and internet usage costs) alongside essential food items such as pilchards, eggs, IQF chicken, brown bread, sunflower oil, maize meal. It further illustrates interest-rate effects by comparing owner’s rent as an equivalent to bond repayments on a standard mortgage. This structured monitoring enables the Commission to highlight where inflation is concentrated, where pricing appears sticky during cost reductions, and where spreads are widening.
COL Report and South African competition law
While the COL Report does not draw conclusions in respect of anticompetitive conduct, it does have notable implications for competition oversight by continuing to apply the Consumer’s International Early-Warning System (“Early-Warning System”) and evidentiary baseline for price transmission across essential value chains.[2] Several features are salient for competition law practice and policy, as drawn directly from the Report’s findings and methodology:
A broadened monitoring mandate across non-food essentials, expands the EFPM’s food focus to include electricity, water, rentals, transport, primary healthcare, funeral policies, education, and internet costs, the Commission positions itself to trackpersistent inflation drivers where administered pricing or sectoral structures may entrench affordability constraints. Assisting in the prioritisation and policy engagement across markets that shape consumer welfare, even where formal competition enforcement is not immediately implicated.
It presents clear analytical boundaries that respect competition law standards. It expressly cautions that the analysis of spreads (aggregate spread between retail and producer prices) is not an inference of anticompetitive conduct. Instead, spreads are diagnostic of price transmission and places in the chain where margins are expanding. The Commission’s reliance on the Early-Warning System underscores that the COL Report is an intelligence and monitoring tool, useful for triage and prioritisation, rather than a determinative finding of collusion or abuse. This delineation aligns with competition law’s evidentiary requirements while still highlighting areas that may merit closer scrutiny.
The Report identifies pricing patterns relevant to oversight, documenting patterns in essential staples where input costs fell or stabilised, but retail prices remained elevated. An example of this is, for instance, the discussion of eggs, sunflower oil, and maize meal, where price stickiness and widening retail margins are observed at various points. In brown bread, producer-level margins rose as wheat prices declined, and retail margins fluctuated as retailers alternated between absorbing and passing through cost movements. Such documented patterns inform areas where the Commission may, in being consistent with its mandate, monitor for potential strategic pricing behaviour over time.
The contextualisation of administered prices as structural inflation drivers, by the Report identifies evidence that electricity prices rose 68% and water prices rose 50% over the last 5 years. This is well above headline inflation and provides a policy context for sustained consumer-facing cost pressure. Although administered tariffs are not set through ordinary market dynamics, persistent increases affect downstream markets and household welfare, which are central concerns of the Commission’s broader public-interest and competition policy ecosystem.
The Report recalls that, following the Commission’s Data Services Market Inquiry in 2019, mobile data prices fell significantly in 2020 and 2021 and have remained comparatively stable. This illustrates how evidence-based monitoring and market inquiries can produce effective outcomes, a tool that the Commission may use in other sectors flagged by the COL Report.
The Report uses an interest rate lens to complement the Consumer Price Index (“CPI”) measures of housing costs, by comparing bond repayments (up 28% over the period 2022 to March 2025) with owner’s equivalent rent, shows how debt-servicing costs meaningfully diverge from CPI’s treatment of owner-occupied housing. This perspective assists competition authorities and policymakers to understand consumer budget constraints that can interact with the market.
Collectively, these features show that the COL Report is intended to guide monitoring and policy dialogue, highlight potential risk zones, without asserting contraventions and maintain an evidentiary base for any future work within the Commission’s statutory toolkit such as market inquiries.
Key Findings Highlighted in the Report
To ground the above effects in the Report’s data, the COL Report records the following notable movements over the past 5 years for the period of 2020 to March 2025:
Key non-food items:
Administered prices: Electricity up 68% and water up 50%, both outpacing headline inflation.[3]
Rentals: Actual rentals for houses and flats up 12%, well below headline inflation (28%).[4]
Primary healthcare (General Practitioners): Cumulative increase 33%, with the latest 6.6% annual rise noted against slowing general inflation.[5]
Transport: Minibus taxi fares increased sharply in mid-2022 following the petrol price spike; fares have been “sticky downwards”, though subsequent increases have trailed CPI, narrowing the gap.[6]
Funeral policies: Up 9% over the period, significantly below headline inflation.
Public education: Primary +37% and secondary +42%, both above headline inflation. [7]
Internet usage costs: Wireless +1%; wired +14%, with a notable step-up in 2022 linked to certain higher priced fibre offerings.[8]
Interest rates vs CPI housing proxy: Bond repayments +28% versus more moderate owner’s equivalent rent growth, illustrating the load from higher interest rates on household budgets.[9]
Essential foods:
Pilchards: Retail margins declined over time; early 2025 spreads narrowed to 15% as retailers showed restraint amid rising producer prices.[10]
Eggs: Producer prices fell into early 2025 but retail prices were slow to normalise; later producer-price increases reduced retail margins, with the Report monitoring recovery trajectories post-avian flu.[11]
IQF chicken: Producer prices stable and retail margins held under 40% in 2025 after earlier pressure. [12]
Brown bread: Farm-to-producer spread 77% in 2025 (above historic highs); retail margins fell to 15%, as retailers absorbed later producer increases.[13]
Sunflower oil: Producer margins settled around 25% since late 2023; retail margins elevated (40–45%) due to slow pass-through of producer-price declines.[14]
Maize meal: Producer margins rose rapidly in late 2023 after white maize price drops; retail prices increased in 2025 despite relatively stable producer prices, pushing retail margins to the high end of historic levels.
These findings supply concrete price-formation signals, where margins compress, where they expand, and how quickly costs are transmitted, which are central to the Commission’s ongoing monitoring orientation.
In Conclusion, the COL Report documents a pronounced squeeze on South African households, especially the poorest, driven by elevated inflation in essential services and persistent cost pressures. It demonstrates that while certain categories (e.g., rentals, funeral policies) have increased less than headline inflation, others (e.g., electricity, water, education, and several staple foods) are coming down hard on budgets. In parallel, the COL Report records instances of sticky pricing and widening spreads, and it maintains a clear line between diagnostic monitoring and legal inference.
For competition law and policy, the COL Report delivers three practical gains, by widening the scope to include key essentials beyond food, showing the spreads and pass through clearly, and a continuation of the Early-Warning System. Furthermore, it assists the Commission in fulfilling its mandate by flagging areas which may need attention, guiding debate on administered prices, and grounding future market work in carefully, publicly sourced data.
South Africa’s logistics and freight infrastructure stands at a critical crossroads, with persistent inefficiencies in the rail, port, and road sectors posing a significant threat to the country’s economic competitiveness and growth. In response to this crisis, the government has introduced the Block Exemption for Ports, Rail and Key Feeder Road Corridors which came into effect on 8 May 2025, a landmark regulatory intervention under the Competition Act 89 of 1998 (the “Act”), spearheaded by Trade, Industry and Competition Minister Parks Tau (Government Gazette No. 6182, 2025). This block exemption represents one of the most substantial reforms in South Africa’s competition law landscape, specifically designed to enable greater collaboration among firms operating in the logistics value chain, while still safeguarding against anti-competitive conduct.
The exemption, notable for its 15-year duration, signals the Government’s commitment to long-term, structural support for revitalising the country’s logistics backbone. It allows companies in the transport infrastructure and logistics sectors to apply to the Competition Commission for permission to coordinate efforts aimed at addressing operational inefficiencies, infrastructure capacity shortages, and systemic breakdowns in port and rail infrastructure, all while complying with relevant sector laws and policies. This marks a decisive shift from the traditional competition law approach, which generally prohibits coordination among competitors, to recognise that South Africa’s logistics crisis requires extraordinary, collective action.
Minister Parks Tau’s role has been pivotal, as he gazetted the exemption to promote collaboration that can reduce costs, improve service levels, and minimise losses caused by years of underinvestment and mismanagement in the logistics sector. There is a clear and urgent economic basis for the intervention supported by the fact that South Africa is estimated to lose as much as R1 billion per day due to freight system failures, with follow on effects across production, manufacturing, wholesale, retail, and export sectors (“A billion a day – that’s what SA loses through freight failures”, Freight News, 21 May 2024). Congestion at major ports, a deteriorating rail network, and poorly maintained road corridors have not only undermined daily business operations but have also eroded the country’s position in the broader global trade industry.
By enabling coordinated, pro-competitive solutions-subject to strict oversight and clear exclusions for cartel conduct, the block exemption aims to unlock investment, restore critical infrastructure, and lay the foundation for a more resilient, efficient, and globally competitive logistics system.
Background/History
South Africa’s ports and rail infrastructure have historically suffered from inefficiencies and significant decay, impacting the country’s logistics and economic performance. The rail network, largely completed by 1925, faced underinvestment from the late 20th century onwards, leading to deteriorating rolling stock, signalling, and track conditions. This decline was arguably caused by theft, vandalism, and outdated systems, most notably within Transnet Freight Rail, which has struggled with equipment shortages and infrastructure damage, including cable theft and adverse weather events such as the 2022 KwaZulu-Natal floods (Dr Mitchell, The Rise and Fall of Rail, Chapter 4). Ports like Durban and Cape Town, originally designed for mostly rail cargo, now face congestion and aging infrastructure challenges, with cranes and gantries exceeding their intended lifecycle, further slowing cargo handling and export throughput. These events trigger a bottleneck for resources waiting to be exported.
To address these challenges, privatisation is often proposed as a solution. However, previous reform efforts including partial privatisation and initiatives to involve the private sector in infrastructure management have largely failed. These failures were primarily due to poor project management, cost overruns, and user resistance, as demonstrated by the Gauteng electronic tolling system. Recognising these shortcomings, the Government now seeks to mobilise private sector financing and expertise through public-private partnerships and concessions, with the goal of enhancing infrastructure delivery and operational efficiency (P Bond and G Ruiters, South Africa’s Failed Infrastructure Privatisation and Deregulation).
Previous key policy milestones that are aimed at addressing these problems include the Transnet Network Statement, which promotes open access reforms to rail infrastructure, the transport ministry’s Request for Information (“RFI”) to explore private sector involvement and innovative solutions, and now the Government Notice issued by Trade, industry & competition minister Parks Tau.
Legal Framework: The Competition Act
The Act ordinarily prohibits agreements between competitors that substantially prevent or lessen competition, with Section 4(1)(b) specifically prohibiting price-fixing, market division, and collusive tendering (Competition Act 89 of 1998, s 4(1)(b)). However, under Section 10(10) of the Act, the Minister of Trade, Industry and Competition may issue exemptions in the public interest Competition Act 89 of 1998, s 10(10). The newly gazetted 15-year Block Exemption for Ports, Rail and Key Feeder Road Corridors, is one such intervention. It permits limited coordination among firms in the logistics value chain to address critical inefficiencies, while maintaining prohibitions on core cartel conduct such as fixing selling prices or excluding small and historically disadvantaged market participants.
The exemption allows for collaboration on operational matters such as joint use of transport infrastructure, coordinated scheduling, and shared logistics data, activities that would typically contravene the Act’s per se prohibitions under Sections 4(1)(b)(i) and (ii). Importantly, each form of collaboration must be reviewed and approved by the Competition Commission, which retains oversight to ensure that such cooperation is pro-competitive, time-bound, and aligned with Competition Commission’s broader transformation and public-interest objectives. The exemption explicitly requires that such collaboration does not exclude new entrants or small, medium, and micro enterprises (“SMMEs”) and instead encourages inclusive participation.
However, the regulations expressly exclude cartel conduct. Section 4(1)(b)(i) and (ii) of the Act prohibits price-fixing, tender collusion, and market division, and these sections remain intact. Any coordination must be submitted for review to the Competition Commission, which will assess whether the collaboration is genuinely pro-competitive and in line with sector-specific goals and transformation mandates.
Rationale: Tackling a Logistics Crisis
The rationale behind the 15-year block exemption lies in its capacity to enable coordinated responses to mounting inefficiencies across the country’s rail, port, and road freight infrastructure, systems upon which the economy’s competitiveness rests.
A recent report by the Council for Scientific and Industrial Research (CSIR) estimates that freight logistics failures cost the economy up to R1 billion per day, affecting production schedules, increasing costs, and undermining export reliability (“A billion a day – that’s what SA loses through freight failures”, Freight News, 21 May 2024). These issues are particularly acute in port terminals such as Durban and Cape Town, where backlogs have resulted in vessel queuing, delayed shipments, and significant demurrage charges.
The rail network, operated largely by Transnet Freight Rail, continues to degrade due to rolling stock shortages, cable theft, signalling issues, and adverse weather events (Transnet Integrated Report 2023). Following the 2022 KwaZulu-Natal floods, major lines experienced months-long disruptions, highlighting the vulnerability of logistics infrastructure (Presidential Climate Commission Brief on the 2022 KZN Floods, 2022). Moreover, a 2024 National Treasury report identified inadequate investment, operational inefficiency, and governance issues as long-standing contributors to the sector’s decline (National Treasury Annual Report 2023/24 (2024). In light of these challenges, the block exemption provides a legal framework through which firms can engage in limited coordination on logistics operations, such as the sharing of transport assets or the synchronisation of delivery schedules, without breaching competition laws.
The decision to set the exemption for 15 years rather than the more typical short-term period reflects a deliberate strategy to create regulatory certainty. Such long-term clarity is essential to attract private sector investment into joint ventures, infrastructure upgrades, and concessioning models. By providing a legally protected framework for collaboration, the exemption seeks to catalyse systemic reform and reduce South Africa’s long-standing overreliance on inefficient, state-controlled freight logistics.
Competition Analysis: Risk vs Reward
The exemption, while pragmatic, raises legitimate questions from a competition law perspective. One of the key risks is that, under the guise of coordination, dominant firms could entrench their market position and SMMEs and historically disadvantaged persons (“HDPs”). This concern is echoed by academic literature, which warns that crisis-driven exemptions, if not tightly monitored, can facilitate collusion and market foreclosure.
The block exemption also contains an explicit requirement that the collaborative measures must not undermine the participation of new entrants or black-owned logistics firms. In fact, they are encouraged to be integrated into these collective solutions, thereby aligning with the broader objectives of the Act, which focuses on inclusive growth and reducing economic concentration.
Internationally, temporary exemptions have been deployed during times of sectoral distress. During the COVID-19 pandemic, the European Commission issued Temporary Frameworks allowing certain forms of cooperation in sectors such as pharmaceuticals, food distribution, and energy, provided they were transparent, necessary, and time-limited (European Commission, Temporary Framework for State Aid Measures, 2020: 1–9). Similarly, the United Kingdom’s Competition and Markets Authority (CMA) granted exemptions in retail supply chains during 2020, illustrating how temporary coordination can maintain essential operations under stress (UK Competition and Markets Authority, Approach to Business Cooperation in Response to COVID-19, 2020).
Therefore, while there are inherent risks, the reward, a more functional, cost-effective, and inclusive logistics sector which outweighs the downsides if strict oversight is maintained. The exemption represents a calculated, legally bounded exception to orthodox competition principles, in the service of restoring one of the country’s most vital economic sectors.
Conclusion
The 15-year Block Exemption for Ports, Rail and Key Feeder Road Corridors represents a pivotal recalibration of South Africa’s competition law in response to an unprecedented logistics crisis. By permitting targeted, supervised coordination among industry participants, the exemption offers a legal mechanism to address inefficiencies without compromising core competition rules. It reflects a pragmatic shift in recognising that structural reform and economic recovery in the logistics sector require more than individual market forces can deliver.
While the exemption creates opportunities for collaboration and investment, its success will hinge on rigorous oversight by the Competition Commission to prevent anti-competitive abuse and to ensure inclusive participation by SMMEs and historically disadvantaged groups. Ultimately, if implemented with discipline and accountability, the exemption has the potential to catalyse a more efficient, resilient, and equitable logistics ecosystem, one that supports South Africa’s broader goals of economic transformation and global competitiveness.
South Africa risks adopting the essence of the EU’s Digital Markets Act (DMA), if not its exact form, with the aim of reshaping the business models of online intermediation platforms. This marks a significant shift away from the principles of traditional competition regulation.
In 2020, the Competition Commission of South Africa (CCSA) concluded that traditional enforcement tools might be inadequate to tackle structural barriers in digital markets particularly those that prevent new entrants or smaller players from expanding. This realisation led to the launch of the Online Intermediation Platforms Market Inquiry (OIPMI). By borrowing a regulatory blueprint designed for the EU, South Africa could undermine its own digital ecosystem, stifle investment, and entrench local inefficiencies. The country’s growing interest in ex ante competition regulation via the Competition Commission’s market inquiries reflects an accelerating trend of policy mimicry without consideration of domestic realities. While there is broad agreement on the need for digital competition regulation, there is little consensus on how these rules should be structured, and approaches to implementation remain highly varied across jurisdictions.
The OIPMI’s final report identified platforms such as Google, Apple, Takealot, Uber Eats, and Booking.com as dominant players distorting competition. It is claimed that, due to the significant online leads and sales these platforms generate and the high level of dependency business users have on them these scaled platforms can influence competition among businesses on the platform or exploit them through fees, ranking algorithms, or restrictive terms and conditions. However, this conclusion raises concerns about the underlying methodology. A central concern with the market inquiry approach is that it allows certain platforms to be identified as market leaders or sources of competitive distortion without requiring a formal finding of dominance, since such inquiries do not mandate that dominance be established.
The designation has been based on characteristics typically associated with globally leading technology firms. Amazon, which currently maintains only a minimal presence in South Africa, was nevertheless singled out as a potential threat to competition. It is claimed that Amazon faces similar complaints in other jurisdictions, and it is argued that fair treatment of marketplace sellers is unlikely to become a competitive differentiator capable of overcoming barriers to seller competition. Moreover, the CCSA has indicated that it would enforce the same provisions against Amazon if it were to enter the market in a way that breaches the proposed remedial measures.
Regulating for hypothetical risks while ignoring tangible consumer benefits risks becoming a self-fulfilling prophecy: global platforms may decide not to enter the market at all, leaving consumers, including small businesses and public services organisations with fewer options and slower innovation.
The OIPMI focuses on structural features that restrict competition both between platforms and among business users, facilitate the exploitation of business users, and hinder the inclusion of small enterprises and historically disadvantaged firms in the digital economy. Despite the absence of formal dominance findings, the OIPMI proposes a range of heavy-handed interventions, including the removal of price parity clauses, the introduction of transparent advertising standards, a ban on platform self-preferencing, and limitations on the use of seller data, many directly inspired by the EU DMA.
In both of CCSA’s 2022 and 2023 findings, Google Search was explicitly accused of preferential placement and distorting platform competition in South Africa. More concerning still are the CCSA’s proposed remedies in its final report- requiring targeted companies to offer free advertising space to rivals, artificially boost local competitors in search rankings, and redesign their platforms to favour smaller firms. The SACC has recommended that Google introduce identifiers, filters, and direct payment options to support local platforms, SMEs, and Black-owned businesses, and contribute ZAR150 million (around EUR 7 million) to offset its competitive advantage. For search results, Google is required to introduce a new platform sites unit (or carousel) that prominently showcases smaller South African platforms relevant to the user’s query such as local travel platforms in travel-related searches entirely free of charge. This goes beyond competition enforcement and crosses into market engineering, compelling global firms not just to compete by government decree, but to subsidise rivals and actively shape market outcomes.
In 2025, South Africa’s Competition Commission also doubled down with its provisional Media and Digital Platforms Market Inquiry (MDPMI), calling for additional remedies targeting online advertising, content distribution, and the visibility of news media. These recommendations are again influenced by EU-style regulations, particularly the EU Copyright Directive, which harms the diversity and sustainability of small news publishers. However, the report downplays South Africa’s unique institutional constraints and specific market dynamics. If adopted, the proposals would compel digital platforms to subsidise select publishers based on arbitrary and hard-to-measure assessments of news content’s value to Google’s business. This could limit access to information, hinder innovation, and monetisation efforts, ultimately narrowing consumer choice and weakening the vibrancy of the content ecosystem.
More broadly, through these market inquiries South Africa risks undermining its evolving digital economy by pursuing an approach that will deter foreign investment due to ambiguous and discretionary enforcement. At the same time, the proposed regulatory burdens could disproportionately affect domestic firms that simply lack the resources to comply. This regulatory uncertainty threatens to stifle innovation and hinder progress toward regional digital integration. In a country where corruption remains a persistent challenge, granting regulators wide discretionary powers over digital market outcomes also raises serious governance concerns. Moreover, by enforcing a narrow and politicised notion of “fairness”, South Africa risks sacrificing consumer choice and strangling the diversity of digital services that a competitive market would otherwise deliver.
Notably, coming back to the EU’s DMA, it was crafted for specific European conditions, particularly in markets where technologically-leading global platforms held relatively high market shares in many EU Member States. Yet even within the EU, the DMA remains hotly disputed – not least because it targets large non-European companies that have long been politically embraced for injecting digitisation into traditional industries and, through competition, helped European businesses and consumers benefit from technology innovation.
EU digital policies, developed from the perspective of wealthy, mature (Western) European markets, should not be assumed to be readily applicable elsewhere. South Africa’s digital markets are still in their infancy, ICT infrastructure remains unevenly developed, and regulatory institutions face significant resource constraints. Emulating the DMA – even informally – risks premature intervention, regulatory overreach, and the distortion of competitive dynamics before they have had a proper chance to emerge and mature.
Competition policy undoubtedly has a role in promoting competition. But poorly tailored rules may end up punishing the very firms that South Africa needs to scale and empower its own digital economy. Instead of replicating the EU’s Digital Markets Act, South Africa should focus on evidence-based case-by-case enforcement – grounded in its own market realities and institutional capabilities. Otherwise, South Africa risks becoming the casualty of a regulatory experiment designed for a different continent – with consequences its digital economy can ill afford.
*The authors are affiliated with ECIPE, the European Centre for International Political Economy
South African Competition Commission Releases Draft Guidelines on Handling Confidential Information
By Olivia Sousa Holl
Introduction
On 3 February 2024, the Competition Commission of South Africa (“Commission”) released draft guidelines (“Guidelines”) that govern the handling of confidential information, the access thereto and the disclosure of such. The investigative and adjudicative powers granted to the competition authorities in South Africa, enable the frequent handling of sensitive business information. Some have raised concerns regarding overly broad confidentiality claims that hinder the Commission’s ability to conduct investigations in a transparent and efficient manner. These guidelines seek to strike a balance between protecting commercially sensitive data while ensuring fairness, transparency, and public engagement with Competition Authorities’ decisions and reasons which form the basis of competition law jurisprudence.
These guidelines intend to provide clarity on how firms and individuals can claim confidentiality over submitted information and how the Commission will assess such claims. They also establish a framework for determining who may access confidential information and under what conditions. The guidelines discourage excessive redaction, and blanket confidentiality claims that obstruct legal proceedings and prevent meaningful participation by affected parties, such as trade unions and public interest groups. Ultimately, aiming to ensure that competition law processes continue to uphold principles of fairness and procedural justice.
The Competition Act No. 89 of 1998 (“Act”) defines what constitutes confidential information, as “trade, business, or individual information that belongs to a firm, has a particular economic value, and is not generally available to or known by others” in section 1(1)(vii).
The Guidelines emphasise that all three criteria must be met for a confidentiality claim to be valid. According to section 44(1)(b) of the Act, a confidentiality claim must be supported by a written statement explaining why the information is confidential. The guidelines further emphasise that overly broad claims will not be accepted and that firms must justify their claims with specific reasons.
In the Guidelines, the Commission has identified that which is considered to generally constitute confidential information, such as, trade secrets, pricing strategies, financial records of unlisted firms, and internal business strategy documents. The Guidelines then go on to state that information such as that which is publicly available, financial statements, shareholding structures, product descriptions, and industry-wide historical data are unlikely to qualify for confidentiality protection.
Claiming Confidentiality: The Form CC7 Process
Section 44(4) of the Act mandates that firms submit both a confidential and non-confidential version of their submissions. Failure to submit a Form CC7 with a written justification may result in the Commission rejecting the confidentiality claim. Once a confidentiality claim has been made, as per section 44(2) of the Act, the Commission must treat the information as confidential until a final determination is reached.
To claim confidentiality, firms must submit a Form CC7, which require:
Identification of the confidential information, including the document name, page, and line number.
A justification for why the information qualifies as confidential, explaining its economic value and how disclosure would cause harm.
Details of existing access restrictions, specifying who currently has access to the information and under what conditions.
Balancing confidentiality and fairness
While the guidelines reinforce the importance of protecting genuinely sensitive information, they also stress the need to balance confidentiality with fairness in competition law proceedings. Various regimes of access to confidential information are outlined, depending on the role and interests of the requesting party.
In most cases, confidential information may be shared with a requesting party’s external legal representatives and economic experts, provided they sign a strict confidentiality undertaking. Section 44(9) explicitly permits the “disclosure of confidential information to the independent legal representatives and economic advisors of a person requesting access, in a manner determined by the circumstances and subject to appropriate confidentiality undertakings, is an appropriate determination concerning access”. (Competition Act)
This access regime ensures that merger parties, respondents, and intervenors can engage meaningfully in legal proceedings without direct access to their competitor’s sensitive business data.
Access by public officials and third parties
The guidelines also address access to confidential information by public officials and third parties. The Minister of Trade, Industry, and Competition has a statutory right to access confidential information in merger proceedings, as provided for in Section 45(3)(a) of the Act. Trade unions and employee representatives must also be given sufficient access to merger-related documents to participate meaningfully in Tribunal hearings.
Public Interest
The guidelines acknowledge the public interest in access to competition law decisions. Warning against excessive redaction, which can undermine transparency and legal precedent. In market inquiries, firms are prohibited from claiming confidentiality over an entire submission, instead it should provide a redacted public version of documents within five days of filing confidential submissions.
If the Commission rejects a confidentiality claim, the claimant has the right to appeal the decision to the Competition Tribunal under Section 45(1) of the Act. If dissatisfied with the Tribunal’s ruling, they may further appeal to the Competition Appeal Court (“CAC”) under Section 45(2) of the Act.
In resolving confidentiality disputes, the Tribunal applies a balancing test that considers:
The right to a fair hearing (ensuring parties can properly engage with evidence).
The need to protect confidential business interests.
The public interest in transparency and competition law enforcement.
The guidelines reinforce that the default position is disclosure, particularly for independent legal advisors, and that confidentiality claims must be well-founded
The Commission also confirms that the unauthorised disclosure of confidential information is a violation of the Act. However, it emphasises that these guidelines are intended to improve transparency and procedural fairness while maintaining robust protections for sensitive business information. The Commission reserves the right to amend the guidelines periodically based on legal developments, stakeholder feedback, and international best practices in competition law enforcement.
Public comment
The Competition Commission invites public comments on the draft guidelines, with written submissions due before 3 March 2025. These guidelines represent a significant step toward improving transparency, procedural fairness, and public access to competition law decisions while maintaining necessary protections for business confidentiality.
On 12 November 2024, Lottoland South Africa (Pty) Ltd (“Lottoland”) was granted interim relief by The Competition Tribunal (“The Tribunal”) against Google Ireland Limited and Google South Africa (Pty) Ltd (collectively “Google”).
Lottoland, a licensed bookmaker as of 7 November 2017 in terms of the Western Cape Gambling and Racing Act, offers fixed-odds bets on the outcome of an array of lotteries worldwide, including the South African National Lottery and various sporting events.[1] Lottoland’s competitors include other licensed bookmakers within the country such as Hollywood Bets, World Sports Betting and Betway, among others. Google, controlled by Google LLC, is a multinational technology company specialising in internet-related services and products, including search engines, online advertising technologies and more. Google is best known for its search engine and advertising platform, Google Ads, which is a key revenue driver for the company. Google Ads allows businesses to display advertisements on Google’s search engine results pages, partner websites and other platforms using a pay-per-clicks model where advertisers bid on keywords to reach targeted audiences. Businesses utilise this service to maximise visibility with the aim of gaining more customers.
In 2020 Google terminated Lottoland’s access to Google Ads, which Lottoland argued was without justification given that the other licensed bookmakers, providing like services, still had access to Google Ad Services. This termination caused financial harm to Lottoland, and it was argued to distort the competition in this very market that Lottoland operated with detrimental effect on options available to consumers. Google’s main argument was that Lottoland’s services contravene certain sections of the Lotteries Act and by granting them access to their Google Ads services, Google’s policies and reputation could be under scrutiny in a public light.
What is an Interim Relief Application?
An Interim Relief Application, in terms of by section 49C of the Competition Act, 89 of 1998 (“Act”), is a temporary measure sought to address an alleged prohibited practice and aimed to prevent serious or irreparable harm pending the outcome of a hearing.[2] “The Tribunal will only grant such relief if it is of the opinion that it is reasonable and just, having regard to the following factors:”[3]
The evidence relating to the alleged prohibited practice;
the need to prevent serious or irreparable damage to the applicant; and
the balance of convenience.
The Tribunal must make a summary assessment before granting such application and this assessment is only at a “prima facie level”.[4] The Tribunal has held that the three above steps must be applied holistically whilst balancing each factor against the other. In this regard “a weak case on say irreparable harm may be counterweighted by a very strong case on the prohibited conduct. And vice versa…”.[5]
In the event an interim relief order is granted, it operates for a period of six months from its date, or the conclusion of the hearing, whichever is earliest.
What is the prohibited practice?
The basis of Lottoland’s application was that Google had contravened sections 8(1)(d)(ii) and 8(1)(c) of the Act.[6] Section 8(1)(d)(ii) states that a firm may not engage in exclusionary acts, such as refusing to supply scarce goods or services to a competitor or customer, unless it can demonstrate that the technological, efficiency, or other pro-competitive benefits outweigh the anti-competitive impact of its actions, and providing the goods or services is economically feasible.[7] Section 8(1)(c) prohibits a dominant firm from engaging in an exclusionary act if the anti-competitive effect of that act outweighs its technological, efficiency or other pro-competitive gain.[8] The overarching element that must be proved in both instances is that there must be a showing of dominance by the firm within the market in question.
A showing of dominance
Google raised the argument that they are not dominant within the ‘advertising ecosystem’ which includes both online (Google Ads) and offline advertising (print media, billboards, television, etc.) However, The Tribunal took a more detailed approach to determine the specific market Google is operating in, while accounting for the market in which Lottoland and its competitors are advertising in. The Tribunal refused the idea that the market in issue is that of the broader ‘advertising ecosystem’ but it is rather the specific market of online advertising, and even more specifically, the market for online search and search engine marketing (“SEM”) markets. The Tribunal stated that the service of Google Ads operates within this specific market, and it was proven, prima facie, that Google is likely to be dominant in this market in South Africa. Thus, rejecting Google’s argument that they should be viewed as operating in the broader ‘advertising ecosystem’.
Lottoland submitted that Google has a market share of more than 90% in the SEM market, measured by search volume, and states that such dominance is well-established as The Commission had stated that Google is “the monopoly provider of intent-based marketing and customer acquisition in SA…”.[9]
Section 8(1)(d)(ii) and 8(1)(c) of the Competition Act
Now that dominance is established, we can break down and analyse each element that needs to be proved in terms of this section. The first element involves a refusal to supply a customer. On the face of such scenario, Google has refused to supply Lottoland with their service of Google Ads as Google terminated Lottoland’s access. Google had argued that by allowing Lottoland access to such service there is a potential for criminal liability or other commercial risks. The Tribunal’s ultimate findings was that this argument lacked basis as Lottoland’s competitors were provided access, showing an inconsistent enforcement of Google’s “internal policies”. Furthermore, The Tribunal stated that there is insufficient evidence to suggest that Lottoland had contravened the Lotteries Act.
The second element of proof is that of scarce goods or services. It was indicated in eMedia that a scarce good or service is one that is i) impossible or prohibitively expensive to duplicate or ii) there are effective substitutes for the service.[10] In GovChat, The Tribunal explained that a ‘scarce’ good or service is one that “cannot be easily duplicated without significant capital investment.”[11] Google’s main argument rested on the fact that there are numerous alternatives to Google Ads, all of which are viable and pose significant competitive constraint on Google Ads. However, The Tribunal in this case concluded that SEM services cannot be easily duplicated without significant capital investment and there is no feasible substitute, thus, rejecting Google’s argument and establishing the scarcity of Google Ads.
Alongside the above elements, it must be shown that it is economically feasible for Google Ads to supply Lottoland with Google Ads services. Lottoland seeks nothing more than to have access to Google Ads, as do their competitors. This equitable access request, and as is the opinion of The Tribunal, would prima facie not be impractical or unfeasible, the continued access to Lottoland’s rivals being a determining factor. The fact that Google has supplied Lottoland with Google Ads for some time before terminating access also suggests that it is not economically unviable to do so again.
Once the above has been established, harm is presumed, and the onus would typically shift to the respondent to show that these harmful effects are outweighed by pro-competitive gains. The Tribunal found that Google had no competition-related rationale for their actions and thus, there conduct prima facie distorts competition in the downstream market without any pro-competitive of efficiency justification presented or argued by Google.
Our assessment above, whilst done in the context of Section 8(1)(d)(ii) is also relevant for purposes of Section 8(1)(c). The Tribunal concluded that for reason stated under the section 8(1)(d)(ii) discussion, Google has also violated the provisions of section 8(1)(c). Google’s conduct has a prima facie anti-competitive effect, distorting competition by not allowing Lottoland to expand within their market relative to their rivals. The conduct was not found to be outweighed by technological, efficiency or pro-competitive gain and Google had little to no arguments in this regard.
Application of section 49C(2) of the Act
Lottoland submitted that Google’s refusal to allow it to use Google Ads resulted in Lottoland’s customer registration rate dropping significantly. Lottoland supplemented this with a monetary amount of the revenue that they had suffered as a result of Googles refusal to supply their Google Ads service, which, up until the interim relief was ordered, was ongoing. The Tribunal concluded that this is prima facie evidence that, due to Google’s conduct, Lottoland have suffered ‘serious or irreparable damage’, meeting one of the three stages of section 49C(2) of the Act. Additionally, the preamble of the Act states the importance to “provide for markets in which consumers have access to, and can freely select, the quality and variety of goods and services they desire”, with the overarching purpose of promoting and maintain competition in the Republic for the ultimate benefit of the consumer. It is clear that Google’s conduct has limited the choice for end-consumers.
With reference to ‘the balance of convenience’, The Tribunal weighed up the harm suffered by each party if they were to grant/refuse the application for interim relief, pending a decision on merits and stated that if there is clear and non-speculative evidence that suggest, and to what extent, a party will suffer harm if the relief was not given, then such relief should be given. It was stated in eMedia that “whilst there will inevitably be disputes of fact”, the Tribunal should still take a robust approach on the evidence before it, and that “if there is a prima facie right, even one open to some doubt and well-grounded apprehension of irreparable harm if the relief is not granted and ultimately granted at a final relief stage, then the balance of convenience favours the grant of the relief.”[12]
The Tribunal concluded that Lottoland had made out a prima facie case of restrictive practices and well as the irreparable harm it has suffered, therefore the balance of convenience, as shown, favours granting of interim relief. The requirements of section 49C of the Act have been satisfied and there is a case for interim relief.
Key takeaways
This case highlights critical elements that The Tribunal considers when assessing prohibited practices and granting interim relief under the Act. For a prohibited practice, The Tribunal focuses on determining market dominance, the exclusionary nature of the conduct, and whether the anti-competitive effects outweigh any pro-competitive justifications. The Tribunal’s approach to market dominance was particularly noteworthy. Instead of accepting Google’s broad definition of the market as the ‘advertising ecosystem,’ The Tribunal adopted a narrower definition focusing on the specific market for SEM services. This refined approach allowed for a more precise assessment of competition dynamics, underscoring Google’s overwhelming dominance in the SEM market.
The Tribunal further scrutinised Google’s refusal to supply Lottoland and its inconsistent application of internal policies, emphasising the scarcity of Google Ads as a service and its critical role for businesses reliant on digital advertising. Regarding interim relief, the Tribunal assesses whether there is prima facie evidence of a prohibited practice, serious or irreparable harm to the applicant, and whether the balance of convenience favours granting relief. Notably, the Tribunal’s robust and detailed approach to evaluating dominance and harm provides a roadmap for future cases, emphasizing the importance of context-specific market definitions and balancing the interests of all parties involved. This case underscores the Tribunal’s commitment to protecting competition and consumer choice while maintaining fairness in digital markets.
Joshua Eveleigh, Managing Associate at Primerio International says:
“At its crux, this matter dealt with the weighing up of the alleged risks and reputational harm to Google against the claimed foreclosure of Lottoland in the downstream market. Importantly, the Tribunal clarified that its mandate is to pronounce on how conduct may distort competition in a market.
Hence, if there is prima facie proof of anti-competitive conduct which cannot be outweighed on a balance of convenience, an application for interim relief must succeed. This is a particularly noteworthy judgement for firms operating within regulated environments. In effect, a dominant firm will be hard placed to cut-off services to a customer if, for example, it does not have clear evidence that the customer engaged in unlawful conduct.”
[1] Western Cape Gambling and Racing Act 4 of 1996.
[2] Competition Act 89 of 1998 (the “Act”), sec 49C.
[9] Competition Tribunal of South Africa, Lottoland South Africa (Pty) Ltd v Google Ireland Limited and Google South Africa (Pty) Ltd, Case No: IR191Mar23 (Reasons for Decision and Order), para 78.1.
The African Continental Free Trade Area (“AfCFTA”) agreement, currently entered by 55 African countries, came into operation on 30 May 2019 and thereafter officially lodged in 2021. The purpose of the AfCFTA agreement is to create a single market for the continent, allowing free flow of goods and services across the continent and boost trading position of Africa in the global market[1].
While it is important to take into consideration that any change requires time, the question remains whether the AfCFTA agreement will in fact inject a positive change into Africa’s economy and promote intra-African trade.
The World bank predicts an economic growth for Africa, albeit it substantially low, indicating that the projected growth for Sub-Saharan Africa is 3% in 2024 and by 4% in 2025 to 2026, with East Africa expected to grow by 2.2% in 2024 and West Africa to grow by 3.9% in 2024.[2]
In 2023, the World bank further stated that research shows that the AfCFTA could lift 50 million people in Africa out of extreme poverty by 2035 and expand incomes by USD 571 billion[3].
Africa has been preparing itself for a growth in the Economy and the competition that comes with this in the broader African economy, by increasing regulatory infrastructure to oversee intra-African trade, with the likes of COMESA[4] and the recently functional ECOWAS[5], together with an increase of regulatory provision within African jurisdictions. ‘
However, despite the preparation and readiness for a nuclear increase of intra-African trade, various factors have been hindering the progress. Africa has been riddled with uncertainties, related to political unrest, rising conflict and violence, climate shocks and high debt distress risks[6]. This leaves market leaders cautious to invest in Africa, and African entities to trade over and across these uncertain jurisdictions.
Article 4 of the AfCFTA agreement states that the specific objectives of the agreement is to progressively eliminate tariffs and non-tariff barriers; progressively liberalise trade in services; cooperate on investments, IP and competition policy; cooperate on all trade-related areas; cooperate on customs matters and the implementation of trade facilitation measures; establish a mechanism for the settlement of disputes concerning their rights and obligations; and to establish and maintain an institutional framework for the implementation and administration of AfCFTA.
South Africa has taken a positive step in this direction, as trade under the AfCFTA commenced during January 2024 where South African entities can export on a duty free, or reduced duty, for certain products. The South African Revenue Services has implemented the AfCFTA agreement and reduced the tariffs for these products[7]. However, the responsibility remains on African entities to promote the benefits of AfCFTA by increasing the intra-African trade and making full use of the economic gain that stems from the AfCFTA agreement.
While Africa is hopeful for the positive incorporation of the specific objectives of AfCFTA and the potential economic boost that AfCFTA can incorporate, this will only come with time, cooperation by the various African jurisdictions and proper implementation of the AfCFTA agreement.
It is no secret that international e-commerce giants Shein and Temu — the “ultra-cheap, ultra-fast retail giants” — have become increasingly popular among the South African population. The entry of these affordable and efficient platforms has certainly given Takealot – the established market leader – a run for its money, sparking reasonable concern for its survival and that of other local players in the market.
The Commissioner of the South African Competition Commission (“Commission”), Doris Tshepe, stated that “all tools of government” are needed to level the playing field in the e-commerce sector considering the entry of international industry giants such as Amazon, Shein and Temu. This call for action comes 14 months after the Commission’s Online Intermediation Platforms Market Inquiry Final Report (“OIPMI”), released in July 2023which identified Takealot as the market leader and holding a dominant share of over 35% of online transactions.
The South African e-commerce sector is growing quickly, demanding stronger competition regulation and government policies. The OIPMI focused on ‘then’ current market dynamics. The arrival of international players (who were not in the Commission’s scope at the time of the inquiry), however, now arguably requires a shift in regulatory focus.
In the government’s efforts to curb the large volume of low-value imports from Shein and Temu, the South African Revenue Service (“SARS”) introduced a new tax regulation in September 2024. SARS’ intervention was based on the fact that domestic clothing retailers are required to pay 45% on imported clothes whereas international e-commerce retailers, as an alleged way to avoid higher import rates, segment large orders into smaller amounts to ensure they remain under R500. In this regard, items are now subject to VAT, in addition to the 20% flat rate, even where items are less than R500.
At this particular juncture, it is too early to gauge the impact of the adjustments on sales, however the implemented tax adjustments intend to address competition concerns by increasing costs for low-value imports, making it less advantageous for consumers to consistently choose Shein and Temu’s cheaper imports over local options. Takealot has, however, demanded greater intervention to ensure further fairness within the South African market. Takealot, therefore, proposes that international e-commerce players such as Shein and Temu set up local offices and distribution centres in South Africa. Implementing these proposals would require Shein and Temu to invest in local infrastructure, thereby leading to job creation and increased tax contributions in South Africa. This would ultimately establish equity in the market, aligning their operational costs and processes with those of local online retailers and reducing the cost advantage these companies currently enjoy by selling and shipping directly from abroad. Furthermore, Takealot has advocated for their international industry partners to collaborate with local businesses and open local bank accounts to ensure fair tax contributions.
With the shift in the Commission’s focus from market dynamics to international players, South African fans of the two industry giants can expect further tax implications and regulatory changes which may impact their online purchases and decision-making.Additionally, the rapid developments in the industry and the Commission’s evolving approach to market assessments raise questions about the effectiveness of market inquiries and their findings.
In light of the Commissioner’s recent comments, it is expected that the Commission will keep a watchful eye on the industry and its international participants, particularly taking into account local player’s concerns.
Ultimately, the Commission will aim to foster a more equitable playing field, ensuring the sustainability and competitiveness of South Africa’s local industry in an increasingly globalised market. For local retailers, there may be a positive shift in foreign-owned business tax contributions, while consumers could see a positive impact on the overall economy.
Joshua Eveleigh, an associate competition law attorney at Primerio International, notes:
“the explosive growth of Shein and Temu within South Africa also demonstrates an important concern associated with the Commission’s market inquiry regime. Specifically, the Commission looks to impose binding remedies on firms within dynamic markets. This creates an inherent risk that by the time the Commission does impose remedies on a firm, the market has already changed and the remedy becomes ineffective.”
In any event, it is clear that certain measures will be taken to maintain effective competition in South Africa. In doing so, however, the Commission should be cautious in not becoming a price or sector regulator.
African Antitrust & Competition Law 