Google’s Dominance Triggers Antitrust Crackdown by South Africa’s Watchdog

The dominance of Google in the area of Internet search has caused harsh measures by the antimonopoly authority of South Africa.

Google’s Dominance Triggers Antitrust Crackdown by South Africa’s Watchdog

The regulator said that Google’s dominance in the Internet search system distorts the competition of platforms. The antimonopoly authority claims that in this case, a situation has formed that is beneficial for large market players, but at the same time limits the capabilities of other smaller companies. The watchdog has offered several solutions to the problem. In this case, the antimonopoly authority directs its efforts to improve the visibility of small South African companies in search results.

The Chairman of the Competition Commission, James Hodge, said at a media briefing that the American giant of the Internet industry influences the competition of platforms since it is in the online system of this company that most of the actions in the digital dimension begin. He noted that Google pays special attention to the so-called paid search results, which, in his opinion, means creating conditions for the dominance of firms with the largest expenses on marketing campaigns. In the end, a situation of competition imbalance is created, in which there are beneficiaries and those who find themselves in the position of the loser.

The regulator’s conclusions were made based on the results of a large-scale investigation into the activities of the Internet giant and other technology platforms that are represented in South Africa, which began in 2021. At the official level, the reason for the need for an investigation was identified as a problem in the field of competition. As part of this activity, the regulator also monitored companies such as Takealot from Naspers Ltd., Uber Eats, and Apple’s App Store.

Google said that South Africans turn to its Internet search system for relevant and high-quality results, the credibility of which is beyond doubt. Company spokeswoman Siyavuya Madikane said the online giant’s platform creates choice and generates millions of free visits to South African sites every day. She also said that Google is studying the regulator’s report.

The Commission stated that the local online firm Takealot, which is part of the ownership structure of the Naspers Internet group, should carry out a procedure for differentiating its business, following which the marketplace and retail trade should become separate areas of activity. The Cape Town-based firm was founded in 2011 and has since become the largest online retailer in South Africa. At the end of last year, the company’s revenue amounted to $827 million. A representative of Takealot said that the firm has received the report and is considering the conclusions contained therein.

In the case of Google, the watchdog determined that the company should introduce a module that appears in search query results so that small South African platforms can attract more consumer attention. Also, this solution to the problem should make it easier for consumers to identify and support local companies by adding a flag identifier and a search filter.

The Internet giant, according to the regulator’s recommendation, should also allocate $10.2 million in advertising credits and free training for small platforms to use Google’s paid search functions to attract customers. The company should also spend $8.1 million to support the performance of small and medium-sized enterprises owned by Africans in organic results. The watchdog claims that these measures will help compensate for competitive disadvantages.

As we have reported earlier, Italy Accepts Data Portability Offer From Google.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.