Facebook ‘abusing market dominance’
GovChat claimed in the Competition Tribunal yesterday that Facebook and WhatsApp were abusing their market dominance.
A Sunday Times Daily report says the tech company – used by the government to communicate about the Covid-19 pandemic – has asked the tribunal to interdict WhatsApp from ‘offloading’ its messaging platform pending an investigation by the Competition Commission after it laid a complaint of anti-competitive conduct by WhatsApp and its owner, Facebook.
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 and its subsidiary #LetsTalk had breached WhatsApp’s terms of use.
GovChat said Facebook’s control over the WhatsApp platform was the subject of two ‘landmark anti-trust 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 Zuckerberg (founder, chairperson and CEO of Facebook) to quash perceived competitors’, said counsel for GovChat, Paul Farlam SC, in his heads of argument.
GovChat claims WhatsApp initially allowed it ‘onboard’ via a Business Service Provider called Praekelt.
When Praekelt told GovChat it could only service non-profit clients, GovChat and it's subsidiary #LetsTalk contracted with a company called InfoBip to be its Business Service Provider, said GovChat.
GovChat claims the relationship between itself and #LetsTalk was never a secret and that it was stated on the first page of its agreement with InfoBip.
It was ‘reasonable for GovChat to infer’ that Facebook was fully aware of the relationship between GovChat and #LetsTalk.
But this is where GovChat and WhatsApp part ways on the facts in the case, notes the Sunday Times Daily report.
WhatsApp said at first it was unaware of the link between GovChat and #LetsTalk and that, under the type of agreement they had providing services to the government, that link was prohibited by its terms and conditions.
Government entities that wish to make use of WhatsApp are subject to additional restrictions, said counsel for WhatsApp and Facebook, Jerome Wilson SC, in heads of argument.
However, Farlam said the reasons WhatsApp cited for the breach of its terms kept changing. ‘They are pulling out whatever they can and they are waving it at us,’ said Farlam during the hearing.
The real intention was – as was being claimed in the US cases – to prevent GovChat from becoming a potential competitor and ‘crush competition that existed on its own platform’ when it saw GovChat’s potential for growth during the Covid-19 pandemic.
But Wilson argued there was no evidence ‘whatsoever that Facebook and/or WhatsApp provide (or intend to provide) services to GovChat’s government clients that GovChat currently provides’.
The reason WhatsApp wanted a direct link with government was not to give the services that GovChat provided, but ‘to ensure a contractual nexus between WhatsApp and users for purposes of enforcing the terms of use’.
The report notes argument to the tribunal will continue on 18 January.
In the meantime the parties were negotiating an interim arrangement pending the outcome of the tribunal’s decision.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
