Access Alert | South Africa’s Competition Commission Intends to Prosecute WhatsApp for Abuse of Dominance – Proposed Fine is 10% of Turnover

Access Alert | South Africa’s Competition Commission Intends to Prosecute WhatsApp for Abuse of Dominance – Proposed Fine is 10% of Turnover

In July 2020, Facebook South Africa stated that it would off-board GovChat and #LetsTalk, a technology start-up that connects government and citizens, from the WhatsApp Business Application Programming Interface (WhatsApp Business API). In addition, Facebook has been unwilling to share data related to GovChat with the South African government.

GovChat was launched in 2018 and enables the public to engage with all spheres of government – national, provincial, and local. GovChat provided the South African government with an unprecedented insight into service delivery issues in real-time, enabling the government to provide targeted solutions more efficiently. However, GovChat is dependent on continued access to the WhatsApp Business API. According to the Competition Commission, the intended off-boarding of GovChat from the WhatsApp Business API will harm consumer welfare by removing the efficiency of the GovChat.

The Competition Commission has argued that WhatApp enjoys significant economies of scale and network effect advantages and therefore is in contravention of the Competition Act which prohibits market dominance and exclusionary behaviour. For example, the terms and conditions governing access to the WhatsApp Business API are designed to shield and insulate Facebook from potential competition presented by GovChat and the enormous data it has been able to harvest, which enables it to develop new services and products.

The Commission has asked the Tribunal to impose a maximum penalty against Meta Platforms WhatsApp and Facebook South Africa, which is 10% of their collective turnover. In addition, the Commission has requested the Tribunal to prohibit Facebook from off-boarding GovChat from the WhatsApp Business API and to declare certain exclusionary terms and conditions void for access to the WhatsApp Business API.

For more information, please contact Melissa Govender at melissa.govender@accessparternship.com.

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