TRIBUNAL GRANTS GOVCHAT, #LETSTALK INTERIM RELIEF AGAINST WHATSAPP AND FACEBOOK
Facebook Inc., WhatsApp Inc., and Facebook South Africa (Pty) Ltd. ("the respondents") have been interdicted and restrained by the Tribunal from removing GovChat from the WhatsApp platform.
The applicants asked the Tribunal to prevent the respondents from removing or “off-boarding” them from WhatsApp’s paid business messaging platform, pending the outcome of their complaint against Facebook to the Competition Commission (“the Commission”), or for a six month period (whichever occurs first).
A public version of the Tribunal’s order and reasons is available on the Tribunal’s website at https://www.comptrib.co.za/case-detail/19430. Below is a summary and excerpts:
The Tribunal has granted the application for interim relief as follows:
- “The respondents are interdicted and restrained from off-boarding the applicants from their WhatsApp Business Account (“WABA”) pending the conclusion of a hearing into the applicants’ complaint lodged with the Commission or 6 (six) months of date hereof, whichever is the earlier.
- The respondents shall not engage in any conduct that directly or indirectly undermines the applicants’ relationships with its clients for purposes of achieving the same outcome as off-boarding the applicants. The applicants shall not on-board any new clients or users to the WABA.
- In relation to existing clients or users on the WABA, the applicants shall not launch, expand or sell any new use-cases to these clients.”
A prima facie right to the interim relief being sought
In its order and reasons, the Tribunal notes that “it is not our function, in interim relief proceedings, to arrive at a definitive finding of a contravention. A successful applicant is only required to make out a prima facie case, not to establish its case on a balance of probabilities”.
In this regard, the Tribunal finds: “… the applicants have established a prima facie case of prohibited conduct on the part of the respondents in that the respondents’ selective application of its rules against the applicants amounts to an effective refusal to deal… The applicants have (thus) also made out a prima facie case of exclusionary conduct and anti-competitive effects … The respondents on the other hand have not provided any evidence of pro-competitive gains to off-set the prima facie anti-competitive effects”.
*Note to the media:
The Tribunal has not concluded on whether or not WhatsApp/Facebook have contravened the Competition Act. Rather, the Tribunal has found that there is sufficient evidence before it that the applicants have a prima facie case (i.e., a case on the face of it) that they should be granted interim relief while their complaint against Facebook is being investigated by the Commission. If the Commission’s investigation ultimately finds that there is a case, it will then refer the matter to the Tribunal for adjudication (or “prosecution”). Only after a hearing into that referral will the Tribunal make a finding on whether or not there has been a contravention.
The applicants alleged that WhatsApp is the most widely used messaging application in South Africa and has an entrenched market position. The respondents did not dispute these facts.
The Tribunal accordingly finds that the applicants have succeeded in proving that WhatsApp is, at least, prima facie dominant in the market for OTT messaging applications via smartphones in South Africa (OTT or Over-The-Top applications comprise Apps such as WhatsApp, WeChat and Facebook Messenger). In addition, the Tribunal notes that the applicants are both customers and competitors of the dominant firm in the secondary market for government messaging services. It is in this market that the Tribunal understands part of the applicants’ complaint to arise: its complaint is that WhatsApp is using its dominance in the OTT messaging market to act to the exclusion of competitors in the government messaging services market when it perceives a competitive threat in that market.
Serious or irreparable harm
GovChat currently assists the Department of Health with Covid-19 education, symptom tracking and testing. It also assists the Department of Social Development and the South African Social Security Agency with enabling citizens to apply for distress grants.
“Members of the public who rely on GovChat’s platform for assistance pertaining to distress grants and Covid-related information will be deprived of access to these critical services during the Covid-19 pandemic if it was off-boarded from the WhatsApp platform, pending the outcome of the complaint lodged with the Commission…” Further, the Tribunal notes that the refusal to supply by off-boarding will “certainly result in an anti-competitive outcome”.
Balance of convenience
The Tribunal finds that the balance of convenience favours the granting of interim relief to the applicants who provide an invaluable service to both government departments and citizens alike. The applicants will suffer irreparable harm if off-boarded, which will ultimately also negatively impact the public interest in a very critical time of the Covid-19 pandemic. “We cannot conceive of any real prejudice which the respondents will suffer during the period of our order, pending the outcome of the Commission’s investigation”.
Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
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