It’s no longer news that Meta lost its appeal at Nigeria’s Competition and Consumer Protection Tribunal (CCPT) against the FCCPC Nigeria. Meta approached the CCPT to overturn the FCCPC’s decision, which found that Meta violated WhatsApp users’ rights in the manner in which their data was collected and processed/used. The FCCPC found the practice to constitute an abuse of Meta’s dominant position in the ‘contact-based instant messaging service’ market in Nigeria. The decision came with a $220 million fine on Meta, among other remedies. Meta still has the right of further appeal to Nigeria’s Court of Appeal and up to the Supreme Court, and they have indicated their interest in exercising this right. As usual, Meta has threatened to shut down its services in Nigeria, but this is besides the point of this article.
This Nigerian enforcement action, and the likelihood of similar enforcement actions being pursued by national or regional competition authorities or private complainants in Africa, raises the urgent need for a more strategic and nuanced approach to digital markets regulation in Africa. For example, recent reports indicate that more legal challenges are coming Meta’s way in Kenya, Ghana, Uganda, etc. One factor underlying these enforcement moves is the lack of a coherent homegrown strategy on how we want to live with the reality of digital platforms.
Unlike in some jurisdictions, where the regulation of digital markets has gained considerable attention, leading to the adoption of new legal frameworks or adaptation of existing ones, the conversation has yet to become mainstream in Africa. To date, the most strategic approach to digital market regulation is the series of market inquiries conducted by the Competition Commission of South Africa (CCSA). Notably, the market inquiries cover online mediation platforms and online media and digital platforms. Having obtained national-level market insights from the inquiry, the CCSA, in its final report, recommended some remedies to restore and safeguard competition in these markets. There is no indication that South Africa will adopt new laws to regulate the digital markets.
Without undermining the impact of the enforcement success recorded by Nigeria, I must say that a one-off hefty fine against a digital platform is not the best demonstration of a regulatory strategy. A strategic approach to digital markets regulation – whether at the national, regional or continental level – would start from where South Africa started. Understanding the dynamics of the various digital markets is indispensable. Who are the participants (considering the multisidedness of most of these markets)? What is the size of the markets? How do the platforms affect the economic, social and political life of the society? What are the factual and legal barriers to entry, and how do these barriers affect national/regional alternatives to global platforms? How do operators access and use the raw material of this market, which is data? What existing body of rules could apply to these markets, and how adequate are those rules? Etc.
There is no hiding the fact that most of the national or even regional competition authorities in Africa do not have the resources to undertake the kind of market inquiry that the CCSA has done, even if they considered it a priority. However, the first question is whether these competition authorities consider it a priority to forge a strategic approach to digital markets regulations. As African countries differ in their levels of economic development, so do their needs, resources, and priorities differ.
Like I have argued in the past, the relatively small size of the national markets in Africa means that the most viable approach to regulating digital markets is a continental approach, or at least a regional approach. I believe it’s time to seriously consider a common African approach to digital market regulation. Allowing individual countries to grapple with the challenge of digital markets regulation would lead to a mix of no regulation in some countries, weak regulation in some, and opportunistic regulation in others. For example, where there is no regulation, the operators may do whatever they wish, but there is a chance of transgressing certain strictly held norms. The result would be a backlash that may come in the form of ill-informed, disproportionate, opportunistic regulation or enforcement actions by regulators to score cheap political goals. The point here is that sensible and proportionate regulation, though difficult to achieve, is the best outcome for everyone, including the platform wonders in the market.
Africa’s current approach – tending more towards fragmentation – is fraught with several pitfalls. As Africa seeks to accelerate economic integration, and with a vision of a possible African single digital market, fragmented regulatory standards would create the incentive for digital platforms to play one country against the other when it comes to choice of location and the investment that comes with it. We can learn from the similar case of EU, where Ireland initially proved a ‘safe-haven’ for some of the global platform until the vigorous enforcement of EU Community standards started to level the playing field.
Additionally, while the fragmented approach could deliver occasional enforcement ‘successes’ here and there, it says nothing about how we intend to live with these technologies going forward. For example, what premium do we place on personal data vis-à-vis innovation and adoption? Do we want to pursue an ‘industrial policy’ approach to promote local alternatives or create better conditions for our MSMEs that are users of these platforms? How should we treat taxation? How should we approach content moderation, bearing in mind that our sensitivities may differ from those of other parts of the world on specific issues like political stability, ethnic/religious diversity, etc.
Fortunately, there are pockets of efforts around the continent to develop Africa’s response to digital technology as a whole. From initiatives and policy documents on digital infrastructure, AI, digital trade, etc. Perhaps, the most significant for digital markets regulation is the AfCFTA Competition Policy Protocol (ACPP). Article 12 of the ACPP creates a basis for the future adoption of the EU/UK-type platform designation and application of ex-ante rules. However, a lot more work needs to be done, but the question is: who should drive this process?
I believe that the African Continental Free Trade Area (AfCFTA) Secretariat is well placed to lead the process of developing a common African approach to digital market regulation, pending the establishment of the AfCFTA Competition Authority as envisaged under the ACPP. In doing this, the Secretariat would need to start with a comprehensive study of the digital markets across Africa (since a formal inquiry is not feasible under the present continental legal framework). The study would draw the necessary linkages to past and ongoing initiatives and policies at the national, regional and continental levels, provide insight into the dynamics as already highlighted, and form the basis for policy discussions and development. To ensure a focused execution, the AfCFTA Secretariat may need to set up an expert working group to work with the State Parties in distilling policy and regulatory instruments from the study.
An initiative as described above, among other things, would signal to the global and African digital tech companies that Africa is ready to define the terms of its digital future and galvanise engagement from the platforms. From a regulatory predictability perspective, I’m sure that the tech companies would find this approach useful, especially because they have the opportunity to engage in the process.
In conclusion, while relatively strong economies may occasionally record a ‘win’ over global tech companies, a common approach to digital markets regulation holds better prospects for Africa. A common approach would harness the capabilities of various countries, moderate opportunism by state and non-state actors in pursuing enforcement, recognise the economic importance of digital tech platforms and engage them in developing regulations, properly calibrate the various pain points (economic and non-economic), and safeguard the interests of the not-so-capable African countries.
This is a call to action
