​Tech giants like Google, Facebook and Amazon have come under fire in both America and Europe for abusing their dominant market positions and engaging in anti-competitive practices. Unsurprisingly, lawmakers have proposed regulations to keep them in check.  In South Africa, our competition law is, at least in principle, robust enough to deal with the challenges posed by internet monopolies' abuse of dominance, says legal expert Dr Pieter Koornhof who recently obtained his doctorate in Mercantile Law at Stellenbosch University. The title of his dissertation was Abuse of Dominance and the Internet: An assessment of the South African Regulatory Framework.

Koornhof' study examined whether the traditional model for regulating abuse of dominance would be effective in the instance where an internet monopoly is charged with a contravention under South African competition law.

“As the enforcement proceedings brought against Google, Facebook and Amazon are slowly starting to become more relevant to the South African legal and commercial landscape, the time is clearly ripe to assess whether our competition law is robust or adaptable enough to be able to deal with abuse of dominance by internet monopolies."

He adds that in a borderless space like the internet where goods and services sometimes are monetised and distributed completely differently, many of our normal assumptions about how to define dominance and abuse change.

Koornhof says the provisions for abuse of dominance in the South African Competition Act 1998 (Act 89 of 1998), along with the broad framework for enforcement, are sufficient to deal with matters pertaining to the internet as and when they arise. These matters would include, among others, exclusionary practices surrounding licensing of operating systems, pricing models for app stores, use of data for price/product discrimination, etc.

“On the face of it, there is no legislative impediment to regulating and dealing effectively with abuse of dominance (or even other forms of anti-competitive conduct) relating to the internet."

“Section 8 of the Act generally regulates exploitative and exclusionary practices, whereas Section 9 regulates price discrimination."

According to him, the law does not need to change to regulate internet monopolies, at least not for now.

“Sweeping amendments to the Competition Act to allow for the regulation of digital competition matters are probably not currently called for.

“Rather, we must improve our understanding of how these companies operate and how markets work so that we are able to better identify and regulate abusive practices as and when they occur. South African competition authorities need a greater understanding of how technology impacts on markets and firm behaviour.

“Additionally, given the stated objectives of the Competition Act and the potential impact on consumer welfare and the development of electronic commerce in South Africa, there is an argument to be made that greater analysis of this burgeoning issue should be a high priority for our competition authorities."

According to Koornhof, countries should work together to ensure greater regulation because “the issue of how best to deal with competition on the internet, and the negative impact which undue or reckless regulation may have, is very real."

“Given the size and nature of some so-called internet monopolies, there is a distinct need for coordination and cooperation between countries to ensure effective regulation and subsequent enforcement of any findings of anti-competitive conduct."

He says particularly those countries where these issues manifest most directly must learn to work with others effectively in regulating these practices.

Koornhof adds that competition law has definitely had its successes when it comes to promoting consumer welfare and fair competition but as times and business practice change, it cannot operate in a vacuum. That is why there is a need for greater cooperation between regulators, both locally and internationally.