We are in the regime where competition authorities across the globe reflect on the role regulators continue to play towards ensuring equality and globally competitive markets.
This necessitates transparency and accountability to enlighten stakeholders that work does not end when a market inquiry’s final report is released. Teams invest valuable time monitoring the implementation of remedial actions, liaise with businesses affected by the recommendations and analyse the impact of the report on the particular market and consumers.
For example, the Online Intermediation Platforms Market Inquiry (OIPMI) issued its final report at the end of July 2023 after two years of investigating local and international business-to-consumer online platform markets and identifying features that adversely affect competition in these markets.
Competition concerns such as excessive pricing, ability for new entrants into the market and the participation of small and medium enterprises (SMEs) in the markets were examined through, among other things, a series of hearings, submissions from the market participants and input from the public.
The final report included a series of remedial actions that sought to provide greater visibility for smaller South African platforms, enable more intense platform competition and level the playing field for small businesses selling through online platforms. The remedial actions were geared towards facilitating a more inclusive digital economy for platforms, businesses and consumers.
More than a year later, look at the impact of the inquiry not just for SMEs but for ordinary consumers as well.
The widespread popularity and convenience of booking accommodation online has created opportunities for SMEs to reach more potential patrons, allowing greater choice for consumers. In travel, our OIPMI found that Booking.com imposed “wide price parity” and “narrow price parity” conditions on hotels and other establishments.
A wide price parity clause is a contractual clause which required accommodation providers on Booking.com to publish or offer prices that are no higher than any other online travel intermediation platforms. A narrow price parity clause required accommodation providers listing on Booking.com to publish or offer prices that are no higher than their own direct online booking channel, for example their own website.
In August last year, the commission and Booking.com agreed on steps to be taken by the online accommodation booking platform to comply with the commission’s remedial actions from the final OIPMI report. Essentially, removing these clauses effectively enhances price competition between online travel agents and facilitates accommodation providers such as hotels and guest houses to price lower on their own websites for online bookings.
Implemented at the start of December 2024, these changes will also benefit consumers by providing different price options online and enabling accommodation providers to innovate and develop their direct sales channels.
The OIPMI examined online intermediation platforms in various industries including property and vehicle listing websites such as Property24 and AutoTrader. For meal ordering and delivery from all types of restaurants, the OIPMI identified remedies that aimed to support restaurants and offer fair and transparent prices to consumers. Effected platforms in this industry included Mr D and Uber Eats.
The remedies and impact of the OIPMI go far beyond what has been described and has sought opportunities for SMEs.
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