Classified advertising companies in scrutiny from Competition Commission

The emergence of large global online businesses such as Google and Apple has not only attracted attention but also scrutiny from regulatory bodies. In South Africa, online classified advertising companies have also come under the microscope of the Competition Commission’s online market inquiry. This inquiry has shed light on the dominance of certain platforms, the barriers to entry for competitors, and the negative impact on competition within the classifieds market.

Classified

One of the key findings of the inquiry is the substantial market share held by two leading platforms in the automotive sector, AutoTrader and Cars.co.za, with over 80 percent between them. This dominance raises concerns about the lack of competition and the potential for anti-competitive practices. Furthermore, in the property classifieds sector, Property24 and Private Property emerged as the dominant players, with Private Property uniquely positioned through its partnership with national estate agencies. This partnership has allowed Private Property to secure the majority of property listings, limiting opportunities for competing platforms.

Property24 and Private Property provide syndication software to estate agents, but the inquiry found that the monthly fees charged by these platforms for incoming listings discourage smaller agents from using alternative platforms. This creates a ripple effect on platform competition, as smaller agents are more likely to choose the more established platforms due to cost considerations.

To address these distortions and promote competition, the inquiry has made several recommendations. Firstly, it requires Property24, Private Property, and PropData to provide interoperability at no fee for estate agents to feed listings to other platforms. Secondly, it calls for Property24 and Private Property to cease charging for incoming listings and put an end to multi-year contracts with large agencies. Additionally, the inquiry recommends that Rebosa, the industry association, stops supporting Private Property as the preferred platform and proposes divestment by national agencies holding shares in Private Property.

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The inquiry also acknowledges the need to support historically disadvantaged persons (HDPs) in the industry. It requires all leading platforms, except Private Property, to introduce programs aimed at supporting HDPs, including personalized training, access to market intelligence reports, and free standard listing subscriptions for new HDP agents.

The Competition Commission’s online market inquiry has been on the dominance and anti-competitive practices in the South African online classifieds market. The recommendations made by the inquiry aim to promote competition, address barriers to entry, and support historically disadvantaged persons. It is crucial for the market to foster a level playing field that encourages innovation, fairness, and equal opportunities for all participants.

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Gurleen Kaur

I'm a science graduate from the Ahmadu Bello University, Nigeria. My passion for writing has brought me to into the field of content.