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Brutal battle between WhatsApp and South Africa’s GovChat

Facebook and WhatsApp are engaged in a furious battle with South African technology company GovChat, which facilitates engagement between citizens and their elected officials.

GovChat – which was launched in 2018 – allows citizens to access a variety of government services through its WhatsApp Business profile.

It services have now come under the scrutiny of WhatsApp and its parent company, who have threatened to remove (offboard) GovChat from its WhatsApp Business Account (WABA) due to alleged violation of its terms of service.

WhatsApp claimed that GovChat has repeatedly refused to comply with its terms of service and refused its offers of help to become compliant.

The company said while GovChat was not authorised by any government department to render services to citizens, its name has created the impression that it was an official government site.

In addition, it has argued that GovChat gathered sensitive personal information from citizens and there were no controls in place as to which third parties they might share this information with.

GovChat’s inclusion of information from different government departments was also in contravention of WhatsApp Business API rules, which determined that each department should have their own separate WABA accounts.

It argued that GovChat’s presence on WhatsApp went beyond merely breaking rules, and was unfair towards other business solutions providers as it achieved aggregation in a way that avoided “all the checks and balances”.

This has allowed GovChat to provide services which were not permitted by WhatsApp and therefore not available to other providers.

Eldrid Jordaan
Eldrid Jordaan, GovChat CEO

GovChat has responded to WhatsApp’s off-boarding threat by lodging a complaint with the Competition Commission claiming anti-competitive behaviour.

GovChat and its subsidiary #Let’sTalk has asked for interim relief from the Competition Tribunal to interdict Facebook from removing it from WhatsApp while the Competition Commission investigates the complaint.

The platform has maintained that it was not breaking any of the WhatsApp Business API rules.

Instead, in its complaint to the Tribunal, GovChat has alleged that WhatsApp wanted to deal with government directly, to the exclusion of GovChat.

In addition, it claimed that WhatsApp was giving preferential treatment to companies like Praekelt Consulting Services, Avira Health, Internet Filing, and Telkom Pay, which have built competing platforms to GovChat.

“We do not believe there is a distinction to be made between the services offered by GovChat, Aviro Health, and Internet Filing,” GovChat stated.

It further claimed that Facebook was advantaging Praekelt, with which it had a commercial relationship.

Praekelt was originally a partner of GovChat and helped onboard GovChat’s system to the WhatsApp Business API.

GovChat later moved away from Praekelt to handle the functions it provided internally.

“When it was Praekelt doing it, Facebook had no problem,” GovChat stated.

In an interview with eNCA, GovChat CEO Eldrid Jordaan likened Facebook’s apparent abuse of its dominance and anti-competitive behaviour in this instance to a major case brought in the US.

“As we know they are being taken on by their own government. 48 Attorney Generals in the United States have combined a lawsuit and taken them on for the exact same thing,” Jordaan said.

Competition Commission
Competition Commission

The Competition Tribunal found that GovChat had established a prima facie case of prohibited conduct on the part of Facebook and WhatsApp with regards to the selective application of its rules against GovChat.

This, it stated, amounted to an effective refusal to deal.

“The applicants [GovChat] have (thus) also made out a prima facie case of exclusionary conduct and anti-competitive effects,” the Tribunal said,

“The respondents [Facebook and WhatsApp] on the other hand have not provided any evidence of pro-competitive gains to off-set the prima facie anti-competitive effects.”

It therefore granted the application for interim relief, which means that WhatsApp, Facebook, and Facebook SA are interdicted and restrained from off-boarding GovChat.

This will be valid pending the conclusion of a hearing into the applicants’ complaint lodged with the Commission, or 6 months of date hereof, whichever is the earlier.

In addition, it has been ordered not to engage in any conduct that directly or indirectly undermines GovChat’s relationships with its clients for purposes of achieving the same outcome as off-boarding them.

However, GovChat has also been ordered not to on-board any new clients or users during this time.

In addition, it may not launch, expand, or sell any new use-cases to existing clients or users.

The Tribunal emphasised that it was not its own function, in interim relief proceedings, to arrive at a definitive finding of a contravention.

“A successful applicant is only required to make out a prima facie case, not to establish its case on a balance of probabilities”.

Furthermore, the Tribunal found that the balance of convenience favoured the granting of interim relief to GovChat who provided an “invaluable service to both government departments and citizens alike”.

“The applicants will suffer irreparable harm if off-boarded, which will ultimately also negatively impact the public interest in a very critical time of the COVID-19 pandemic.”

“We cannot conceive of any real prejudice which the respondents will suffer during the period of our order, pending the outcome of the Commission’s investigation,” it added.

WhatsApp Business
WhatsApp Business

WhatsApp has said it was disappointed that the tribunal did not permit it to off-board GovChat at this stage.

However, it was grateful that the findings included imposing restrictions on GovChat’s operations, as this would continue to defend WhatsApp from abuse and protect its users.

“We want our services to be used to help get essential information to people during COVID,” said WhatsApp.

“That’s why we’ve worked with business solution providers alongside more than 100 governments and NGOs around the world, including the South African government, to launch official coronavirus chatbots.”

The Competition Commission will now investigate GovChat’s complaint, following which the Competition Tribunal will make a decision on GovChat’s off-boarding from WhatsApp based on the evidence presented.

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