Digital trade is fast taking root in Africa, with e-commerce platform businesses having emerged in recent years. This development necessarily leads to different parties interacting at the ‘e- marketplace’. This interaction involves the consumers on one hand, and e-commerce platforms and third parties- mostly owners of the merchandise, on the other.
But, what is the rule of play in these scenarios, and are these rules usually beneficial to the consumers- creating a great online shopping experience? Well ideally, they should, but in some instances they are not. And this is the point which competitions policy and consumer protection sets in. This is the basis for our focus on Trade and Competition Policy in Africa.
One of the most active regional bodies that deal with competition law and policy is the Common Market for Eastern and Southern Africa (COMESA)- a regional economic community in Africa with twenty-one member states stretching from Tunisia to Eswatini. More information on COMESA can including the history of its formation is here. Article 55 of the COMESA Treaty covers competition policy. More particularly , Article 55(3) empowers members states to create COMESA Competition regulations- and it is pursuant this clause that the COMESA Competition Regulations of were promulgated in 2004. The COMESA Competition Commission is a regional body established under Article 6 of the Regulations and has the function of, among others, promoting competition within the Common Market through monitoring and investigating anti-competitive practices of undertakings within the Common Market.
The Commission has undertaken several investigations and made determinations since its establishment and more on these can be found here.
Once of the most recent decisions is the COMESA Competition Commission’s determination in the matter involving investigation on possible misleading and unconscionable conduct by Jumia Group, one of Africa’s leading online ecommerce platforms with a presence in 23 countries. Let’s consider the Jumia decision by the COMESA Competition Commission, and its implications.
Briefly, first, Jumia on its platforms and in its terms and conditions did not indicate the registered company and business that owned the platform, and who their actual legal representative was. Second did not warrant that: the information on their website is complete or accurate; the material on the website was up to date; the website/platform would operate without fault; and that it would remain available. Third, did not provide buyers with a preview of the order before making payment, making it impossible for the buyer to get evidence of what they had ordered. Four, through its terms and conditions, Jumia excluded itself from being party to the contract for sale or purchase, claiming that it was not involved in the transaction, was not an agent of any buyer or seller and therefore did not have liability in connection with a transaction under the contract. Fifth, the company did not provide a dispute resolution mechanism online. Other than the email and complaint form. Finally, and sixth, Jumia’s return policy allowed consumers only 15 days for Jumia Mall platform, and 7 days for Jumia Express and Global platforms to return defective goods, which the Commission considered as unfavourable. See more on these grounds here
In its decision, the Commission was of the opinion that Jumia’s platform and its terms and conditions appeared to amount to false and misleading representation which is prohibited by Article 27(1)(d) and (f) of the Regulations. The cited regulations simply outlaw false representation in the trade or commerce, that a particular person has agreed to acquire goods or services and making a representation that the person has a sponsorship, approval, or affiliation it does not have. The commission also found that that Jumia’s conduct was possibly unconscionable, which is prohibited by Article 28(1) as read together with Article 28(a) and (b) of the Regulations. Here is the determination by the COMESA Competition Commission. Importantly, following this decision, the Commission has now required Jumia to make a raft of changes to its terms and conditions to bring them in line with the COMESA Competition Regulations.
What is the Jumia Case for Digital Trade in Africa?
Firstly, the investigation and determination the Jumia Case underscores the importance of competition policy in trade and especially now that digital trade and online purchase are in the increase. At a continental level, negotiations on the AfCFTA digital trade regime are still ongoing. Digital trade is an integral part of free trade and critical to boosting intra-Africa trade. In February 2020, the AU Assembly decided to include digital trade within the AfCFTA.
As digital trade expends in Africa, discourse on consumer protection will continue. A policy brief titled ‘ The Role of Consumer Protection in the Digital Economy’ notes that Consumer protection policy seeks to mitigate information asymmetries between providers and consumers and other factors, such as limited bargaining power and digital literacy, that impede consumer choice, and to provide protections for vulnerable consumers. Here is the brief.
Secondly, one may wonder how the regional competition regimes exists alongside the AfCFTA Competition policy which fell under Phase 2 of the AfCFTA negotiations – and where the Protocol on Competition Policy has just been adopted. Notably, according the Protocol, the Competition Authorities of the Regional Economic Communities (RECs) shall maintain their jurisdiction as building blocks for an integrated competition regime in Africa. COMESA is one of the RECs recognised by the AfCFTA and in fact the latter’s Secretariat in 2021 expressed an interest in establishing a partnership framework to support the implementation of the continental trade regime in several areas including in competition policy. There, seen from the perspective of AfCFTA ‘continental preferences ‘clause, the determinations by COMESA Competition Commission are likely to play significant rule in AfCFTA competition regime.
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Patrick's Trade Digest 