Competition policy in the digital economy: The South African perspective

The global economy is in the midst of dramatic changes. The emergence of the digital economy has led, in turn, to the emergence of new business models. While these online platforms offer multiple benefits, their market power and its potential abuse poses serious challenges for both markets and for consumers. The increasingly entrenched market power of these online platforms, if they remain unregulated, poses the threat that markets may become monopolistic. And the challenge for consumers is the collection and use of their data. To address these challenges and ensure competitive, open and accessible digital markets, it is high time that governments find effective ways to regulate these businesses, while preserving the benefits they offer and excising the threat of market over-concentration. These new forms of regulation need to be carefully curated, and it is unlikely that there will be a “one size fits all” solution that all countries can effectively apply. Some countries have opted for new laws or regulations that are designed specifically for the digital economy, to effectively regulate these new forms of business. Others have chosen to adjust the existing competition law framework to restore competition and address the emerging challenges in digital markets. Countries should take this opportunity to learn from one another to find effective methods of enhancing competition in digital markets and better protecting consumers. This is uncharted territory for everyone, and it would be beneficial for competition and consumer protection authorities to cooperate with one another as well as with other relevant government ministries and sector regulators. In fact, to do so would guarantee policy coherence and consistent regulation that will not harm businesses, not prevent innovation and better protect the consumer. This book is the result of research conducted by the UNCTAD Research Partnership Platform (RPP) into these issues of competition and consumer protection that are arising in the digital economy and how to address them. Chapter 1 discusses the dramatic change in the global economy arising from digitalization and the rapid growth of digital platforms due to their access to data, and the implications for competition in these markets.