Deputy ty Commissioner, Competi tition Commission of f South th - PowerPoint PPT Presentation

Trade and Development t Board: In Intergovernmental Group of f Experts ts on E-Commerce and Dig igital Economy “Policy and Regulatory responses at national, regional and intern in rnational le levels s to tr transf sform th the opport rtunities and challe llenges in in th the data- driven economy into inclusive trade and development” 4 April il 2019 2019 Unit ited Natio tions Conference on Trade and Development, t, Geneva Hardin Rats tshisusu Deputy ty Commissioner, Competi tition Commission of f South th Afr fric ica

Out utli line and and pe perspectiv ive Per ersp spectiv ive Out utli line • Competition Enforcement Authorities: Presi esident of of the the Rep epublic ic of of Sout outh Afric frica, H.E .E. Cyri ril l Ra Ramaphosa on on the the oc occasio ion of of South Africa State of of the the Natio ion Addr ddress, 7 F Febru ruary ry 2019 • Industrial Revolutions Over Time On the fourth industrial revolution…. • Policy considerations in the age of E- “ To ensure that we effectively and with greater urgency Commerce for Africa: Opportunities and harness technological change in pursuit of inclusive growth Challenges and social development, I have appointed a Presidential Commission on the 4th Industrial Revolution… It will identify • Need for competition regulation in e- and recommend policies, strategies and plans that will position South Africa as a global competitive player within commerce: past reports the digital revolution space .” • Need for competition regulation in e- commerce: current thinking On the On the Sq Squa uare Ki Kilometre Array… • Competition regulation in e-commerce: “The successful construction in the Northern Cape of the MeerKAT telescope, the world’s largest and most sensitive Some experience in South Africa radio telescope, and the development of the Square • Competition regulation in e-commerce: Kilometre Array has enabled South Africa to develop capabilities in areas such as space observation, advanced Experience in other selected jurisdictions engineering and supercomputing.” • Way forward: Response

Com ompetit itio ion En Enforcement t Auth uthorit itie ies in n Sout outh Afric frica • Prior to democracy in 1994, the South African government Constitutional Court played a prominent role in the economy including in the operation & functions of competition law & policy • Competition law regulation gave a lot of discretion to the Government (through a designated Ministry) in the operation of what was then known as the Competition Board. The economy was characterised by state-sanctioned cartels & state monopolies • Following the advent of democracy in 1994 the new South African government gave high priority to redressing economic imbalances corresponding to racial divisions in the country – strong competition policy became an important tool • The Competition Act (as amended) was introduced in 1998 and became operational on 1 September 1999 including its relevant enforcement institutions:  Competition Commission - which reports to Parliament through Ministry (EconomicDevelopmentDepartment-EDD)whichappointsCommissionerand DeputyCommissioner(s)andCommissionerappointsstaff  T ribunal - which reports to Parliament through EDD, members of Tribunal (includingChairpersonandDeputyChairperson)areappointedbyPresidentof theRepublicofSouthAfricaonrecommendationofMinisterEDD,Chairperson isresponsibleforappointingstaff  CAC - is analogous to a High Court with its judges being appointed by the PresidentonrecommendationoftheJudicialServicesCommission,notacourt of first instance but rather considers appeals and reviews of the Tribunal but is thecourtoflastinstanceonallcompetition-relatedmatters

Industria Ind ial l Revolutio ions Ov Over r Tim Time https://www.weforum.org/age nda/2016/07/why-do-people- resist-new-technologies-history- has-answer/ https://www.usatoday.com/story/ money/careers/employment- trends/2017/10/04/your-job- automated-70-americans-say- no/731200001/ https://www.simio.com/applications/industry-40/history.png

Polic olicy con onsideratio ions in n the the ag age of of E-Commerce for or Afric frica: Opp pportunit itie ies and and Cha hall llenges Opportunitie ies Ch Challe lenges es Afr fric ica Trade • Lack of infrastructure development raise barriers to entry which limit access to digital markets: • The African Union States (55) account for approx. 3%  Internet services – 5G/spectrum world trade, which is quite low  Financial services systems – reliable and trusted payment • In 2016, 3 major African importers (Egypt, South Africa systems to facilitate trade e.g. M-Pesa , Jumia and Algeria) and 3 major exporters (South Africa, Nigeria  Transport connectivity – roads, customs, border control and Angola) accounted cumulatively for 39% of total AU (integration agenda to assist in raising the flow of goods and services within Africa) imports and exports  Logistics networks – post office network or delivery firms • Intra-African trade as a share of total trade in Africa is still (reliability) low  Education – readiness to produce appropriate workforce • Highest ranking African country in UNCTAD B2C E- E-commerce La Landscape Commerce Index 2018 (Africa) is 55/151 (Mauritius) • Innovative landscape - growth of mobile money through (https://unctad.org/en/PublicationsLibrary/tn_unctad_ict4d12_en.pdf) mobile phone technology – Kenya’s M-Pesa used by • Given sizes of individual African countries, difficult to approx. 50% of informal business for mobile payments integrate into global e-commerce system alone. (inclusive growth, trade development) Critical mass is necessary – speaks to integration • Internet penetration in South Africa is over 55%, agenda Mauritius is over 51% and Nigeria over 25% - still room • Global tech giants not investing (taxes, localisation) in for improvement and opportunities for growth Africa in order to facilitate and participate in the development and growth of trade in Africa

Nee eed for or com ompetit itio ion reg egula latio ion in n e-commerce: pas past rep eports Previo ious Work ork on on Onl Onlin ine Conclusions/R /Recommendatio ions Comp Co mpetition Co Conc ncerns Comp Co mpetit itio ion • Previous investigations by competition • OECD Competition Committee: • Resale Price Maintenance (RPM) – authorities into online retail focused on Vertical Restraints for On-line upstream firm requires downstream firm to vertical restraints primarily relating to charge a price that is either not lower or Sales (2013) higher or is the mandated price by upstream travel and e-books e.g. Booki Booking.com UK http://www.oecd.org/competition/VerticalR firm OFT FT (20 2010), ), Aus Austri rian n Com Competit ition on estraintsForOnlineSales2013.pdf • RPM facilitating conduct – downstream Authorit Aut rity (20 2012), ), Swis iss s Com Competit ition on firm agrees to limitations on conduct and/or Com Commis issio ion (201 2012), Hun Hungaria ian positive obligations that may facilitate RPM • International Competition Compe Com petition on Aut Author ority (20 2013), ), Ger German n conduct e.g. not advertising upstream firm's Network Special Project Report Compe Com petition on Aut Author ority (20 2015), ), Apple Apple product for less than an agreed minimum on Vertical Restraints in Online price iBoo iB ooks DG; G;Com omp and and US S FT FTC C (20 2011), ), Geo Geo- Retail (2015) • Across Platform Parity Agreements – block blockin ing Pay Pay-TV TV DG: G:Com omp (on ongoin ing) • Past investigations by competition arrangements between seller & online trading platform where seller undertakes to authorities will be useful for ex-post charge a price on the platform that is no analysis to determine whether existing higher than the price charged on other tools (analytical tools used in assessing platforms offline vertical restraints) are sufficient to • Online sales ban or limitations – deal with online vertical restraints upstream firm prohibits or limits downstream • Cooperation important given the cross- firm from selling goods/services online at all jurisdictional nature of online trade/e- OR from selling goods or services online via The hese were first att ttempts at examining onl online commerce certain online platforms competition dy dynamics cs . It is clear r that hat onli online mar market dynamics ha dy have evolved ra rapid pidly. Ho However, there re is • Geographic Price Discrimination – sti till time to o pi pick ck up up this his type of of wor ork aga gain in n or orde der r upstream firm charges different prices to to o de develop and nd shar hare learnings ov over time and nd downstream entities or consumers in pe perh rhaps guidance ce on on competition reg regulation in n different geographic location the hese mar markets