Court showdown looms over unfettered e-commerce ban

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 11 May 2020

Non-profit organisation DearSA is threatening legal action if government does not lift the ban on unfettered e-commerce.

This after Ebrahim Patel, minister of trade, industry and competition, recently told a press conference that SA’s e-commerce sector will be opened “incrementally” during the COVID-19 lockdown.

However, this has been met with opposition from South Africa’s e-commerce players who recently told ITWeb they believe the Department of Trade, Industry and Competition’s decision to incrementally open e-commerce is “dissatisfactory and remains unintelligible”.

Patel’s argument is that allowing unlimited e-commerce operations will promote “unfair competition” on physical stores that are not operating and may result in the spreading of the coronavirus pandemic.

On top of doing business in “essential” goods during level four lockdown regulations, Patel said e-commerce will “now include products like winter clothing and bedding, and a longer list of personal toiletries, hot foods for delivery, products like stationery and educational books and computers and cellphones”.

Letter of demand

DearSA has become the latest voice calling on government to allow unfettered e-commerce during the lockdown.

Attorneys for civil rights group DearSA on Friday delivered a letter of demand to the minister of co-operative governance and traditional affairs Nkosazana Dlamini-Zuma, challenging the government’s ban on e-commerce as well as its limitation on outside exercise to three hours a day.

Last month, South African logistics and e-commerce businesses also wrote an open letter to Patel, requesting home deliveries of non-essential goods to be allowed during the lockdown.

Now DearSA has added its voice, requesting government to amend the COVID-19 lockdown regulations to allow for all forms of online retailing on the grounds that this would support rather than impede the campaign to stop the spread of the virus.

Attorney for DearSA, Daniel Eloff of Hurter Spies, has notified the minister that unless a response is received by the close of business on 14 May, Dear SA will be compelled to seek urgent relief in court.

“Our client, however, trusts that unnecessary litigation could be avoided and look forward to your urgent response,” says Eloff’s letter to the minister.

According to DearSA, the letter raises concerns that government decisions over the lockdown are ad hoc rather than data-driven, which has resulted in a potential massive economic overkill.

“To, therefore, ban e-commerce on the grounds that this is unfair to brick-and-mortar stores is irrational if the purpose is to stop the spread of the disease. Brick-and-mortar stores are far more likely to accelerate their online offerings if allowed to do so,” the rights group says.

It notes the letter also cites studies from China showing that pandemic outbreaks are much less likely to spread outdoors than indoors.

“This means people should be given more freedom to exercise outdoors during daylight hours,” says Dear SA.

Expansive supply chain

Meanwhile, on Friday, Francine Higham, spokesperson for the Western Cape provincial minister of finance and economic opportunities, also wrote a letter to Patel requesting him to issue additional directives alongside the alert level four regulations to permit online retailers to sell all goods, the delivery of those goods directly to customers and for the importation of those goods to be allowed.

Higham notes the e-commerce industry in SA represents an expansive supply chain of businesses across retail and logistics sectors, and provides an online platform for businesses, especially SMMEs to access and compete in markets where they would ordinarily not have been able to trade.

She notes the sector employs at least 40 000 people in SA, and given the fact that e-commerce can facilitate trade with minimal human interaction, it could potentially employ a lot more if allowed to expand under level four.

“Now more than ever, businesses need to be able to continue to trade safely and responsibly to ensure we save jobs, livelihoods and the economy during the COVID-19 crisis,” says Higham.

She explains the e-commerce sector presents an opportunity for just that, as it offers business a means to innovate and adapt during these tough times, with even traditional businesses being able to pivot and continue to operate, even in a limited way, due to its ease of implementation.

In this way, it is an enabler of competition and access to economic opportunities, Higham concludes.