The Competition Commission of South Africa’s Draft Guidance Note on Online Intermediation Platforms seeks to promote contestability and participation in digital markets – objectives we strongly support. Online intermediation platforms (OIPs) such as e-commerce marketplaces, accommodation booking platforms and online classifieds have expanded consumer choice, lowered barriers to entry, and enabled SMEs and HDPs to access national markets at scale.
RBB has submitted detailed comments explaining that these policy goals are best achieved through a clear, predictable, effects-based framework that balances the promotion of pro-competitive conduct with appropriate scrutiny of anti-competitive practices.
In our view, the Draft Guidance departs from these principles. It adopts a predominantly form-based regulatory approach, presuming harm from a wide range of common commercial practices – many of which generate material efficiencies that benefit consumers and business users. At the same time, key provisions lack the clarity and administrability required for firms to self-assess their conduct. This combination risks deterring investment, weakening innovation incentives, and limiting opportunities for SME and HDP participation.
Our submission identifies several key risks in the Draft Guidance’s current formulation:
Designation of “leading platforms” based on scale. The proposed designation criteria place heavy emphasis on size and usage, with limited guidance on market definition, offline and direct competitive constraints, or dynamic contestability. This risks equating scale with durable market power and imposing onerous obligations on firms that face meaningful competitive constraints – potentially deterring pro-competitive investment and innovation.
Efficiencies are underweighted. Many practices treated as presumptively harmful – such as ranking rules, logistics integration, data-driven optimisation and differentiated terms – can generate important efficiencies (better discovery, lower search and switching costs, improved logistics, and wider SME reach). The Draft Guidance effectively requires platforms to show that such practices are “essential” to survival, rather than recognising that non-indispensable practices can still be strongly pro-competitive and participation-enhancing.
Insufficient recognition of South Africa’s market context. The Draft Guidance imports concepts from ex ante regulatory regimes applied in mature digital markets without adequately accounting for South Africa’s nascent and unevenly developed digital markets, higher logistics and customer-acquisition costs, and smaller addressable market. In this environment, rigid rules that presume harm from particular forms of conduct risk undermining investment, scale-building, and iterative innovation that are critical for future competition and SME participation.
Limited consideration of two-sided platform dynamics. The form-based approach does not fully reflect the economic features of multi-sided platforms, including indirect network effects and OIPs’ need to balance incentives across user groups. Conduct that may appear unfavourable to some business users (e.g. differential fees or integrated fulfilment) often enhances overall platform value, strengthens rivalry, and supports broader SME participation via increased traffic and trust. Ignoring these cross-side effects risks mischaracterising incentives and outcomes.
Risks to the process of participation. Certain aspects of the Draft Guidance risk shifting from protecting the process of participation (entry and growth on the merits) towards protecting particular participants or static “fair” outcomes. Restrictions on efficiency-enhancing platform conduct, or attempts to equalise trading terms, can blunt competitive pressure, weaken capability-building, and ultimately limit the depth and sustainability of SME and HDP participation.
Our submission sets out recommendations for refining the Draft Guidance to ensure an effects-based framework grounded in clear designation criteria, coherent theories of harm, and proportionate evidentiary standards. Form-based indicators can be useful in prioritisation but should not operate as presumptions of harm.
A balanced, context-sensitive approach would offer regulatory certainty, support investment and innovation, and more effectively promote contestability and inclusive participation in South Africa’s digital economy.
