A South African Perspective on Self-preferencing as a form of abusive conduct in the digital market

Abstract

This research report highlights how dominant firms abuse their dominance in the digital market by engaging in self-preferencing initiatives to the detriment of competition in this market. It illustrates the negative impact of the skewed flow of information and deliberate denial of access to information by dominant firms to their competitors in the downstream market to leverage their services or products which ultimately affects competition in this market. Most significantly, this report reflects on how the European Union has addressed the growing self- preferencing concerns to determine lessons (if any) that South Africa can learn therefrom. Data has become an important input into the decision-making of many digital firms which has increased the reliance on privacy regulations. This report also discusses the negative impact of privacy regulation in competition law and demonstrates how it enhances the adoption of self- preferencing practices in the digital economy. The value of data and the characteristics of online platforms propels the tension between access to data and consumer's long-term interest. It is shown in this report that the limitation of data portability using privacy regulation qualifies as a form of self-preferencing and strengthens the control of a dominant firm in a digital economy. South African Competition Act 89 of 1998 is discussed in this report to evaluate its adequacy in addressing self-preferencing concerns.