African competition watchdogs plan to check digital markets
Friday February 18 2022
Officials from five African competition authorities during the Africa Heads of Competition Dialogue held in Johannesburg, South Africa on February 17-18, 2022. PHOTO | COURTESY
Competition supervisory bodies from Kenya and four other African countries have formed an umbrella body to help them deal with challenges posed by digital markets, signalling a more concerted effort to enforce competition laws.
The regulators from Kenya, South Africa, Nigeria, Mauritius, and Egypt, signed a memorandum of understanding in Johannesburg Friday to work together under the Africa Heads of Competition Dialogue (AHCD) to address emerging digital markets challenges.
In a statement, AHCD said digital markets and services have transformed how traditional markets function, raising unique competition issues that necessitate collaboration in re-evaluating the approach to regulations in the markets.
“Accordingly, as regulators on the continent, we are required to consider how digital markets impact on domestic participation in the local and global economy and the terms of that participation, beyond simply as a consumer of global tech firm services,” the regulators said.
In their new arrangement, the regulators agreed to collaboratively assess the conduct in their digital markets, evaluate global, continental and regional mergers and acquisitions, and share information and knowledge, building capacity to deal with the challenges.
They have also committed to collectively researching the obstacles to the emergence and expansion of African digital platforms and firms to enhance competition and inclusion in the digital markets.
Each of the five countries has a relatively large digital services sector, with a GDP share of approximately a quarter of agriculture.
A report by the International Finance Corporation (IFC) revealed that in 2020, Kenya’s digital services sector was the largest in Africa, with a GDP share of 7.7 percent, with South Africa coming third at 6.51 percent.
Nigeria and Egypt were also among the top 10, with a GDP share of 5.68 and 4.98 percent, respectively.
With this new development, the five countries expect to see a rise in domestically developed digital products, increasing competition for multinational technology firms like Google and Microsoft that have dominated the global digital markets.
The five regulators have also invited other African regulators to join their new union to better position themselves to regulate digital markets.
“We confirm that we are committed to expanding and deepening the dialogue on digital markets amongst competition authorities on the continent,” the regulators said.