Steps Towards Regional Harmonized Regulation of Digital Markets. Africa Competition Authorities Dialogue on Regulation of Digital Markets

The Competition regulators from Kenya, South Africa, Nigeria, Mauritius and Egypt in 2022 signed a memorandum of understanding to work together under the Africa Heads of Competition Dialogue (AHCD) to address emerging digital markets challenges.  AHCD noted that 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.

Under their new agreement, the regulators committed to working together to analyze mergers and acquisitions on a global, continental, and regional scale as well as to exchange information and expertise to increase capacity for addressing difficulties. To increase competition and inclusion in the digital markets, they have also agreed to work together to examine the barriers preventing the formation and growth of African digital platforms and businesses.

The development of African markets in the 21^st Century continues to be informed by the continued rise and embrace of the digital economy. At the heart of this is the way in which the African Continental Free Trade Area (“AFCFTA”) agreement is implemented on the continent given that its broader objectives are removing tariffs and various non-trade barriers to essentially create a boarder-less African continent when it comes to trade.

The global digital economy has grown rapidly since internet connectivity was first introduced. This has given companies operating in the digital economy a reach that is unprecedentedly broad. One of the resultant effects of the onset of the Covid-19 pandemic has been the increased e-commerce activity which has taken place. This has led to an environment which has enabled for a thriving ecosystem which has seen the development and growth of a plethora of start-ups.

The digital economy has created a new set of issues for the regulation of competition, much like the conventional economy did. Given the distinct differences in the dynamics of digital markets, classic competition mechanisms that have been effectively used to prevent the development of monopolies and/or increased levels of concentration within the traditional economy have come under intense scrutiny. The digital economy has certain distinctive characteristics that influence interventions in digital markets and influence competition practitioners’ ways of thinking about competition regulation in the digital economy.

The Competition regulators from Kenya, South Africa, Nigeria, Mauritius and Egypt in 2022 signed a memorandum of understanding to work together under the Africa Heads of Competition Dialogue (AHCD) to address emerging digital markets challenges.  AHCD noted that 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.

Under their new agreement, the regulators committed to working together to analyze mergers and acquisitions on a global, continental, and regional scale as well as to exchange information and expertise to increase capacity for addressing difficulties. To increase competition and inclusion in the digital markets, they have also agreed to work together to examine the barriers preventing the formation and growth of African digital platforms and businesses.

The AHCD has now expanded and includes the COMESA Competition Commission, Gambia Competition and Consumer Protection Commission, Moroccan Competition Council and the Consumer Commission of Zambia, who were part of the second meeting held in Cairo Egypt at the beginning of February 2023.

In the meeting the AHCD agreed to:

1. Set up a working group to collaborate on competition issues in digital markets, whose leadership will be rotational.
2. Enhance capacity building in digital markets enforcement among African competition authorities through cooperation and use of their own resources.
3. Compile and share compendium of cases, studies, and enforcement experiences in digital markets among members.
4. Cooperate dynamically on matters that affect African digital markets that raise mutual concerns.
5. Set an annual working pan on tackling matters of common interests in digital markets.

With this we expect to see continued collaboration across the countries to have synchronized regulation of the digital markets while also allowing for the flexibility of growth. This can be through:

• Merger Regulation – The ability for African jurisdictions to adopt a liberal and flexible notification regime which includes both a mandatory notification and a voluntary notification system at the request of the authorities.
• Abuse of dominance – The inclusion of provisions such as “essential facility” provisions or “supply of scare goods” provision. These provisions have an ability to be interpreted with ease when it comes to digital markets especially platform markets which provide a platform for firms to trade and compete for customer.
• Market Inquiry – The inclusion of Market Inquiry provisions is crucial because of their ability to offer competition authorities with a unique ability to understand and decipher the potential concerns within a market and propose both regulatory interventions by sister regulators within a country or legislative amendments to existing laws.