Competition watchdog to probe SA’s high data costs.
SA’s high data costs are to be investigated by the Competition Commission, Economic Development Minister Ebrahim Patel announced on Thursday.
The minister made the announcement in his budget speech in the National Assembly. He also gave notice that amendments to the Competition Act were in the offing, to make the act a tool of economic transformation.
These amendments will empower the competition authorities to act against highly concentrated and untransformed economic sectors.
The inquiry into data costs would be in addition to the other market inquiries into private healthcare, the grocery-retail sector and public transport.
“The growth of this data-driven economy is constrained by high data costs, which affect users of cellphones and laptops and businesses who require high volumes of data,” he said.
Competition Commission head Tembinkosi Bonakele has indicated that the commission would be willing to undertake the inquiry, which is likely to focus on the dominance of a few major players in the telecommunications industry.
Bonakele has raised the problem of the possible overlap of the commission’s work with the Independent Communication Authority of SA, which is conducting a probe into the cost of data that is expected to be completed in two years’ time.
The two regulators need to work together, he has said.
Regarding the proposed amendments to the Competition Act, Patel said these would deal with the concentrated structure of industry and not just anticompetitive behaviour, which had been the focus in the past. “High levels of economic concentration and racially skewed ownership profiles stunt economic growth, prevent entry of new players, reduce consumer choice, limit the levels of innovation and dynamism in the economy and feed a growing resentment among black South Africans of the failure to realise the vision of the Constitution,” Patel said.
The competition authorities would be required to consider the concentration, ownership profile and structural barriers to entry when considering mergers or where anticompetitive conduct market is scrutinised following complaints to the Competition Commission.
An advisory panel consisting of adv Michelle le Roux, attorney Doris Tshepe, Competition Commission chief economist Liberty Mncube and Wits University professor Imraan Valodia has been established to develop the draft amendments.
Source: BusinessDay