There was no evidence of a competitive relationship between tech company GovChat and WhatsApp, said WhatsApp’s counsel, Jerome Wilson SC, in the Competition Tribunal on Monday. And with no competitive relationship, there could be no breach of the Competition Act by WhatsApp.
“With respect, that is the end of the case,” he said.
It was the final day of a battle between tech giant WhatsApp and its owner Facebook with the GovChat messaging platform, currently used by government to communicate with South Africans about the Covid-19 pandemic and emergency social assistance grants.
WhatsApp wants to kick GovChat off its platform, saying it has breached its terms of use.
On Monday, the second day of a hearing before the Competition Tribunal, WhatsApp's lawyer argued against an application to interdict WhatsApp from “offboarding” or removing GovChat which includes a “chatbot” engaging with citizens.
GovChat’s application was for an interim interdict pending an investigation by the Competition Commission of its complaint of anticompetitive conduct. The case began last week and continued on Monday.
GovChat’s case is that WhatsApp and Facebook are abusing their market dominance.
But WhatsApp and Facebook told the tribunal the fight between the two had nothing to do with competition law and was “in truth simply a commercial one, which does not raise any legitimate competition law considerations”. The two global tech giants said Govchat, specifically its subsidiary #LetsTalk, had breached its terms of use.
GovChat’s case is that WhatsApp and Facebook are abusing their market dominance.
The hearing comes as a recent change to WhatsApp’s terms and conditions has led to millions of people across the world reportedly registering with other messaging systems like Signal and Telegram. On Monday it was reported that WhatsApp has extended the deadline for accepting the new terms, announcing on Twitter that it was still working to counter any confusion.
In the tribunal, GovChat said Facebook’s control over the WhatsApp platform is at present the subject of two “landmark antitrust enforcement proceedings” in the US, brought in December 2020.
The US cases “cite numerous examples of conduct that is uncannily similar to what the respondents [WhatsApp and Facebook] have been doing to GovChat, and also refer to threats by Mr [Mark] Zuckerberg (who is the founder, chair and CEO of Facebook) to quash perceived competitors,” said counsel for Govchat, Paul Farlam SC, in his heads of argument.
On Monday, Wilson argued it was a “sign of desperation” that GovChat relied on these foreign cases, which had not yet been decided, but could not cite SA cases to support its argument of anticompetitive conduct.
He said there was no evidence that WhatsApp, an upstream service, sought to compete with GovChat’s services downstream. While Govchat had referred to meetings between Facebook and GovChat’s government clients, this was about verifying identities, approving their use-cases and other compliance functions. It was not about providing competing downstream services, he said.
Nor was there any evidence “whatsoever”, said Wilson, that WhatsApp would, within the next six months, be competing in the areas of payment systems services or data analytics in the government arena.
However, Farlam said in his replying address to the tribunal that it was “revealing” that Wilson limited this to six months and referred to statements made by Zuckerberg that payment systems services had been rolled out in India and Facebook was looking to expand that in other parts of the world.
The tribunal reserved its judgment. In the meantime, WhatsApp will not offboard GovChat and GovChat will not take on any new government clients.
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