Competition in the digital economy

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[1 September 2025]

The Maziv merger is finally moving forward after the Competition Appeal Court approved revised conditions on August 14, 2025. This resolution settled the dispute between the merging parties and the Competition Commission. Now, the final step is to get authorization from ICASA, which is expected to be a formality.

Competition Appeal Court Judgement Vodacom et al v Competition Commission 14 August 2025

The final conditions for the transaction are in Annexure A of the judgment.

Final Conditions Vodacom Maziv Large Merger 14 August 2025

[5 November 2020]

The report was finalized on November 2, 2020.

Competition in the Digital Economy Report

[26 September 2020]

The public comment period has been extended through October 30, 2020.

[25 September 2020]

This document explores how South Africa can benefit from the digital revolution. South Africa has a chance to leverage the digital age for economic growth that includes everyone. This means creating more and better jobs, greater equality, and shared success. However, there’s a risk that powerful companies will dominate the global market, leaving some countries and businesses behind.

To avoid this, South Africa needs well-designed regulations. This paper explains:

  • What the Competition Commission plans to do with existing laws to promote fair competition.
  • The Commission’s ideas for a wider set of regulations to maximize the advantages of the digital economy.

Competition issues and the Commission’s approach
The digital economy throws traditional competition policy out the window. Its unique features demand a fresh approach.

Balancing Act: Competition thrives on innovation, which is also a key goal of digital regulation. So, how do we strike a balance? We need interventions that promote inclusivity for new players while ensuring a space for continued digital advancements.

The Concentration Conundrum: Digital markets can get crowded at the top. First movers gain an edge, data becomes a moat, and network effects make it hard for others to compete. Here’s where competition policy steps in. We need to be proactive, identifying and stopping strategies that unfairly lock out competitors before they become unshakeable.

Informed Consumers, Long-Term Goals: Consumers in the digital age are savvy. They know what they want, and they want it fast. But competition policy can’t just chase after every passing consumer preference. We need to find a way to balance those immediate desires with the long-term economic growth that healthy competition brings.

Keeping Up with the Speed: The digital world moves at breakneck speed. Regulators need to be sprinters, constantly watching developments and adapting their approach as the landscape shifts.

Merger control
South Africa’s competition authority is stepping up its oversight of mergers in the digital economy. Recognizing potential past shortcomings, the Commission is implementing a series of measures to ensure a more thorough assessment of deals in this critical sector.

Here’s a breakdown of the Commission’s initiatives:

Clearer Valuation Standards: The Commission will issue guidelines to clarify how digital assets are valued when determining if a merger meets notification thresholds.

Enhanced Transparency: Companies with a dominant position in digital markets will be required to inform the Commission about all domestic acquisitions, including investments in startups and acquisitions of foreign companies with a local presence.

Prioritized Scrutiny: Digital markets will be a focus area for merger control activities over the next five years (2020-2025).Tailored Assessment Tools: The Commission will develop new guidelines specifically designed to evaluate mergers within the digital landscape, considering the unique characteristics of this sector.

Identifying Gradual Concentration: The Commission will establish a framework to assess “merger creep,” where a series of smaller acquisitions can cumulatively lead to a significant lessening of competition.

Global Collaboration: The Commission will encourage companies to file notifications for major tech mergers in South Africa alongside other relevant jurisdictions, facilitating cooperation with international authorities.


These initiatives demonstrate South Africa’s commitment to fostering a competitive digital environment by ensuring mergers don’t stifle innovation and consumer choice.

Cartel conduct

The rise of digital marketplaces has introduced novel forms of collusion, posing challenges for regulators seeking to maintain a fair and competitive environment. Algorithms, for instance, can be used to establish agreements on pricing and other business terms. To effectively detect, investigate, and prosecute such anti-competitive conduct, the Commission requires the necessary tools, expertise, and legal authority.

Here’s our plan:

  • Detection Powerhouse: We’ll develop specialized tools to identify digital cartels and assess the impact of competitor agreements.
  • Tender Transparency: We’ll pilot a program to detect bid-rigging in tenders.
  • Cartels Forensics Unit: We’ll establish and staff a dedicated lab for in-depth investigations of suspected cartels.
  • Jurisdictional Clarity: We’ll develop guidelines to clearly define the Commission’s authority in cases of digital collusion affecting South Africa.

Abuse of dominance and vertical restraints

The Commission highlights several key points regarding competition in the digital age:

  • Global Impact: Anti-competitive behavior in one country can ripple through the interconnected world, potentially harming competition in other regions.
  • Tipping Point Dynamics: Digital markets often favor rapid dominance, with a single platform quickly capturing a large market share.
  • Disrupted Landscape: Established, regulated companies can struggle to compete against new, global digital giants that operate with fewer restrictions.
  • Enforcement Hurdles: Investigating potential abuses of dominance by major digital players is complex due to their global reach and the challenges of proving such violations.

Forms of abuse in digital markets

The dominance of large tech companies in digital markets raises several competition concerns due to the vast amount of data they collect and the network effects that strengthen their position. Here’s a breakdown of the issues:

  • Unfair Advantage through Self-Preferencing: Large companies that operate online platforms (think Amazon Marketplace) can also compete directly with sellers on those platforms. This creates a conflict of interest. The platform owner has access to a wealth of seller data, which they can potentially leverage to gain an unfair advantage in the competition.
  • Prioritizing Own Products: Vertical integration, where a company controls different stages of a process (like owning both the platform and selling products on it), can incentivize “self-preferencing.” This means platforms might favor their own products or services over those from competitors.
  • Conglomeration and Market Concentration: Even with multiple large players, conglomeration (when a company owns businesses in unrelated industries) can stifle competition, especially in markets like South Africa where concentration is already high. This hinders “inclusive growth,” where smaller businesses can also thrive.
  • Resale Price Maintenance: Online resale price maintenance restricts retailers from setting their own prices for certain products. This can harm consumers by limiting competition and potentially driving prices up.

Here’s how authorities plan to address these issues:

  • Mapping the Digital Landscape: Understanding the current state of digital markets in South Africa will help identify areas for proactive intervention against anti-competitive behavior by dominant firms.
  • Investigating Exclusionary Practices: Authorities will actively investigate practices by dominant online platforms that might unfairly exclude competitors and further solidify their market dominance.
  • Setting Guidelines: Clear guidelines will be issued for online conduct that might violate competition laws.
  • Market Studies and Inquiries: Depending on the situation, in-depth studies or inquiries may be conducted into specific digital markets.
  • Global Collaboration: Cooperation with other competition agencies around the world is crucial to address the market conduct of large tech companies like Google, Facebook, and Apple that dominate not just locally but also globally. Additionally, collaboration on emerging players like Uber, Airbnb, and Bookings.com might be necessary.

Broader regulatory issues

Here’s a rewrite of the passage focusing on the challenges and opportunities presented by these regulatory issues:

Bridging the Digital Divide: The Commission emphasizes the need for urgent investment in digital infrastructure. This includes expanding broadband access, deploying 5G networks, and promoting open access networks. These initiatives can create growth opportunities in the ICT sector and ensure everyone benefits from the digital economy (inclusive growth).

Regulation for a Level Playing Field: The Commission highlights the importance of avoiding regulations that favor traditional businesses over those using digital platforms. Regulations should treat all businesses fairly, fostering competition and reducing barriers to entry and expansion.

Collaboration is Key: Effective regulation requires collaboration between local agencies responsible for competition, consumer protection, and data privacy. International cooperation with similar agencies in developing countries is also crucial.

Supporting Innovation: The Commission suggests updating industrial policies to better assist startups. This could involve strategic measures within a national digital framework to promote growth in the digital economy.

Modernizing e-Government: Streamlining and digitizing e-Government services is essential for efficiency and citizen engagement.

Redefining Financial Regulation: The disruption of the financial sector by digital technologies necessitates a reevaluation of how this sector is defined and regulated. The ability to process and analyze data is becoming a key barrier to entry. Regulatory frameworks need to adapt to encompass a broader range of financial networks, including telecoms and e-commerce companies.

[8 September 2020]

The Competition Commission released a document outlining its plan to regulate competition in the digital economy for both government and businesses.

Competition in the digital economy

The Commission has invited interested parties to make submissions. The deadline is 5 October 2020. These can be sent to Mr Sipho Mtombeni (siphom@compcom.co.za).