The Competition Commission has set its sights on the digital marketplace, where it says small businesses are exposed to exorbitant fees, which hamper their growth, says a Financial Mail report.

The online economy has become an environment where ‘there’s scope to mistreat businesses’, says the commission’s chief economist, James Hodge.

He says many businesses are sacrificing up to 40% of their revenue to pay online platforms which deliver their goods.

The explosion in demand for grocery and food delivery has brought into sharp focus the high commissions that delivery services charge.

Restaurants in particular have been vocal about their discontent at those fees.

In May the commission launched its inquiry into the online economy. It has now launched a second stage of that process, which makes the scope of its investigation clearer.

‘Foreign-based online platforms that facilitate transactions with SA consumers or businesses fall within the scope of the inquiry even though they have no physical presence in SA,’ says Hodge.

Though Hodge did not specify what companies he meant, the implication, notes the FM, is that it is intermediaries like Uber Eats that are being targeted.

Its initial findings, released last week, signal that large tech firms, dominant apps and platforms are stifling the growth of small and black-owned businesses.

Its investigation will look into five areas: e-commerce; delivery platforms; travel and accommodation; online classifieds; and app stores.

Full Financial Mail report (subscription needed)