South Africa’s biggest company has sent a warning to government

South Africa’s largest company by market capitalisation Naspers has warned that the government is not doing enough to encourage the country’s technology sector and promote start-up growth – and that further regulation could cause damage.

The group – which owns Takealot, Superbalist, MrD and several other e-commerce companies – presented to the Competition Commission on Wednesday (3 November) as part of an inquiry into online platforms in the country.

The commission has raised competition concerns around Takealot, which it said is substantially larger than other online platforms and operates a marketplace on which many business users are now dependent as a route to market. It has also flagged MrD’s dominance in the online delivery space.

While Naspers said that it was committed to investing in South Africa’s tech and online sector, it warned that additional restrictive policies in the technology sector that further hinder investment could reduce the diversity of beneficiaries successfully securing early-stage investment.

It added that a careful balance needs to be struck between promoting competition and attracting investments. This means that a ‘one-size fits all’ approach to regulation will not work, it said.

“Across the globe, there is competition for attracting capital which is vital for innovation and growth. Despite its potential to be a leader on the African continent, South Africa continues to lag behind its African peers in terms of early-stage technology investment.”

The group said it is therefore necessary for the government to develop a policy and economic environment that attracts investment and encourages innovation.

“South Africa has an existing comprehensive competition law framework that is sufficient for regulating digital markets. There is a need for a greater understanding of the dynamic and innovative nature of online markets; however, it may be the case that existing enforcement tools are sufficient,” it said.

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South Africa’s biggest company has sent a warning to government