Google’s dominance triggers a regulatory crackdown by South Africa’s antitrust body.

Google’s dominance in online search has triggered a regulatory crackdown by South Africa’s antitrust body.

The Competition Commission has concluded that Google, which is owned by Alphabet Inc., holds a dominant position in search, leading to a distortion of platform competition that favours larger market players. In response to this, the Commission has recommended various remedies aimed at improving the visibility of smaller South African companies in search results.

According to James Hodge, the Chairman of the Competition Commission, Google’s influence on platform competition is significant because it serves as the starting point for most online journeys. However, the Commission raised concerns about Google’s practice of giving prominence to paid results, which tends to favour the largest platforms with substantial marketing budgets, allowing them to dominate the Google search page.

These findings stem from a comprehensive investigation that began in 2021, focusing on Google and other tech platforms operating in South Africa. The investigation was prompted by concerns surrounding competition in the digital marketplace. Apart from Google, the probe also examined the practices of other businesses, including Takealot (owned by Naspers Ltd.), Uber Eats, and Apple Inc.’s App Store.

According to Siyavuya Madikane, a spokesperson from Google, South Africans rely on their platform for trustworthy and relevant search results. Google believes that this fosters choice and leads to millions of free visits to South African websites and businesses on the internet each day. The company is currently reviewing the final report issued by the watchdog.

In addition to Google, the Competition Commission also made recommendations for other companies under scrutiny during the inquiry. One of the firms mentioned is Takealot, a local online company owned by Naspers. The Commission proposed that Takealot should split its marketplace and retail businesses, among other suggestions. Takealot, headquartered in Cape Town and established in 2011, has grown to become the largest online retailer in South Africa, reporting a revenue of $827 million in 2022.

South Africa is following the lead of other major jurisdictions, including the US, Europe, and India, in examining the dominance of Google in search and ad-tech functions.

The watchdog has mandated that Google implement a new unit in its search results, specifically designed to give greater prominence to smaller South African platforms that are relevant to the user’s search query. Additionally, Google is required to make it easier for consumers to identify and support local platforms by adding a flag identifier and search filter for South African companies.

To support smaller platforms in utilizing Google’s paid search functions for customer acquisition, the company must provide advertising credits and free training worth 180 million rand ($10.2 million). Furthermore, Google must allocate 150 million rand to enhance the performance of small and medium-sized enterprises and black-owned firms in organic search results, offsetting the competitive disadvantages they face on the platform, as stated by the watchdog.