Takealot, UberEats and other online stores face major competition inquiry in South Africa

The Competition Commission of South Africa has published the terms of reference for an online intermediation platforms market inquiry (OIPMI).

The commission said that the inquiry has been initiated in terms of section 43B(1)(a) of the Competition Act as it believes that there exist market features which ‘impede, distort or restrict competition amongst the platforms themselves, and which undermine the purposes of the Act’.

“Online intermediation markets are already becoming concentrated domestically, with clear market leaders and dominant platforms emerging across several online intermediation platform markets,” it said.

The commission highlighted the following companies which are a possible cause for concern:

  • In e-commerce, Takealot (including Superbalist) is substantially larger than other online platforms and operates a marketplace on which many business users are now dependent as a route to market.
  • In most service delivery platforms there are one or two dominant providers. For instance, in food delivery Mr D and UberEats account for the bulk of trade whilst Airbnb has been the market leader in home-sharing accommodation. In travel aggregation, TravelStart has emerged as the leading provider.
  • In online classifieds, there are typically two platforms that dominate sales leads and market revenue. For instance, Autotrader and Cars.co.za in autos or Property24 and Private Property in house listings.
  • In software app stores, the dominance of the Android operating system in mobile phones gives Google Play a particularly dominant position, but equally the Apple App store is the only option for iPhone users.

“In addition to single market concentration, the Naspers Group features across many of these markets providing scope for conglomerate advantages such as customer data exchange, cross-promotion and self-preferencing, as well as scope economies in distribution.

“Naspers is also acquiring stakes in existing and start up platforms in these markets domestically,” the commission said.

The commission said that it identified the following issues that may hinder platform competition and excluded business users:

Problems with price clauses

Platforms securing first-mover advantage may use their must-have status to negotiate preferable agreements with suppliers on their platform.

The effect of these clauses is to reduce competition on price or commission between new platforms and incumbents, reducing the scope for competitive rivalry to attracting consumers where the incumbent has a distinct advantage.

The commission said that a number of international platforms operating in South Africa have been found to use such clauses in other jurisdictions to the detrimental effect of the travel industry and consumers, for instance.

Exclusive contracts

Exclusive contracts can similarly reduce rivalry if they prevent business users from multi-homing across platforms, denying new entrants from expanding by making their platform less attractive without a broader set of business users.

Such clauses and incentives have been identified in food delivery platforms and e-commerce.

Predation concerns

Whilst losses may be required initially to get both sides of the platform to critical mass, there is also an incentive to continue driving well beyond that stage in order to entrench dominance through market wide-scale and scope, leaving little room for other platforms to reach such scale.

Platforms have also engaged in selective predation where reductions in margins are used to snuff out new entry once a rival starts gaining traction.

The commission said that a number of local platforms are clearly pursuing growth at any cost in an attempt to replicate successful overseas business models of dominant platforms.


Conglomeration may be used to gain an unfair advantage over rivals, including the conglomeration of consumer data across numerous online platforms and cross-promotion on those platforms.

The commission said that such conglomerate effects were evident in the investigation of the recent prohibited Naspers acquisition of WeBuyCars.


The “dual role” played by platform providers as the platform operator for the marketplace, and also as sellers, may provide incentives to “favour itself” and squeeze the competing business users.

For instance, Takealot as the largest e-commerce platform with a large marketplace faces this potential conflict of interest.


The commission has raised concerns with removing business users from the platform or restricting their ability to price or promote lower than the platform’s own product.

The commission said it is already starting to receive complaints of this type in relation to domestic platforms, especially e-commerce platforms.

Read: How the proposed ‘remote working’ visa for South Africa would work

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Takealot, UberEats and other online stores face major competition inquiry in South Africa