Government & Policy

Big Tech on notice as regulators in Africa group to investigate their market conduct

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Big Tech on notice as regulators in Africa group to investigate their market conduct
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Several competition watchdogs in Africa plan to collectively interrogate the market conduct of global digital firms, putting big techs firms like Google and Meta, which have faced investigations and remedial action in other jurisdictions, on alert.

The planned investigations follow a decision by the regulators from Kenya, Egypt, Mauritius, Nigeria, South Africa, Morocco, Gambia and Zambia last month to set up a working group for collaboration over concerns related to competition and consumer welfare in Africa.

The Common Markets of Eastern and Southern Africa (COMESA) Competition Commission, which represents 21 countries, is also part of the new working group, which agreed to, amongst other agenda, raise mutual concerns affecting African digital markets. The group will also foster collaborative action against obstacles that limit the emergence and expansion of African digital platforms.

African watchdog forces Jumia to review its terms in push to protect consumers

The new development follows the signing of a memorandum of understanding by member states in 2022, and a decision to set up a working group and a leadership team last month.

Member states will also get to develop and/or bridge gaps in their legislative instruments.

“The members identified the need to collectively interrogate market conduct that has been the subject of investigation and remedial action in other international jurisdictions, but which remain unattended in African markets to the detriment of African consumers, businesses and economies,” Dr. Adano Wario, the acting director-general of Competition Authority of Kenya, one of the member states, told TechCrunch.

“One of the several activities in the pipeline is a cross-border market inquiry on digital markets focusing on issues that bear on competition and consumer welfare concerns in Africa,” said Wario.

However, while the regulators will make market inquiries collaboratively, enforcement by member states will be done independently, and according to their laws. It is estimated that two-thirds of countries in Africa have competition laws, with the rest covered by the laws of regional bodies like the African Continental Free Trade Area and COMESA.

The group said its focus areas will be on e-commerce, aggregator services (online travel agents and online classifieds), matchmaker services (e-hailing and delivery services like Uber and Glovo), digital advertising (search and social media sites like Google and Facebook), fintech and app stores.

Wario added that member states have agreed to carry out joint investigations where partners can share information on investigations without prejudice to confidential commitments, to ensure the achievement of coherent and consistent decisions, and the optimal use of limited resources in promoting healthy regional competition.

The strategy, it said, will ensure an efficient enforcement of competition law and policy in digital markets guaranteeing a competitive market, and fostering the growth of African digital firms.

“Digital firms with a global presence may bring innovations to African markets, but they may also stifle the development of domestic platforms. Therefore, there exists the potential to positively impact our economies by ensuring adequate enforcement in this evolving space, including having a clear understanding of the barriers to entry and expansion that are affecting local platforms,” said Wario.

Meta was last year subjected to various kinds of scrutiny for possible anticompetitive behavior in Africa, while more recently a verdict over consumer welfare breach by pan-African e-commerce platform Jumia forced it to review its terms and conditions.

Globally, big tech firms like Google and Meta have on multiple occasions been investigated, and faced remedial action for antitrust breach in the U.S and Europe. For instance, the U.S. Department of Justice in January sued Google over alleged antitrust issues, claiming it has monopoly control of the digital ad market, while Meta was recently found to abuse its dominance to benefit its Facebook Marketplace in Europe.

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