Chris BishopBy Chris Bishop|May 24, 2022|6 Minutes|In Billionaire Tomorrow

Billionaire Tomorrow

I think that Facebook thinks that Africa is the armpit of the world.

An African entrepreneur  is preparing a claim for damages after winning a landmark case against global giant Meta  the owners of Facebook and WhatsApp.

Eldrid Jordaan, the founder of the South African platform Govchat, took Meta to the country’s Competition Commission costing R20 million (about $1.26 million) but says it was worth every cent.

“ I think that Facebook thinks that Africa is the armpit of the world – in their conduct, the way they engaged with us it just kind of displays that. They definitely did not think that we were going to go all the way, “ he says.

“It has cost us a lot of money. could have spent the funding on bettering the service that enables citizens to connect with Govchat.”

The Competition Commission accused Meta of abusing its dominance by engaging in exclusionary conduct geared at preventing competitors from entering into, or expanding, in a market. The regulator referred the matter to the Competition Tribunal with a recommendation that Meta pay a fine up to 10% of its South African turnover. It is expected that the tribunal will take between three to six months to make its decision. Jordaan says the findings were damning.

The case revolves around Govchat a start-up launched, with a staff of five in 2018 that has taken root quickly and flourished. It has 9.2 million users – that’s about four times the population of Botswana – who send more than 600 million messages a year.  It helps millions of South Africans collect their social grants and gives citizens the power to rate government services from a post office to a clinic.

The trouble started in the middle of 2020, when Meta approached Govchat with a plan to remove the platform from the WhatsApp business functionality.

“As soon as we started creating a serious amount of traffic, we started getting these issues,” says Jordaan.

“The rules they apply are not consistent. They say Govchat should not collect personal and identifiable information. Govchat adheres to those terms, but they (Meta) allow other partners and stakeholders to do the exact opposite . They allow other platforms to collect ID numbers and personal information, but Govchat does not do that.”

Jordaan intends to take the matter further than the tribunal.

“We will pursue damages. I think Govchat has a responsibility to alert governments around the world to what Facebook is doing – we will use our partners at the United Nations to inform member states about what Facebook is doing and that they be found guilty and fined across the world and they must be taken seriously by those governments. Data privacy, data security and  just the way in which big tech companies try to swallow up and the disrespect they have towards start-ups is unfortunate and needs to be dealt with harshly and we are definitely going to use this case to advocate for member states and governments around the world to act against Facebook when these type of things happen.”

Jordaan, a communications expert and  former special advisor to former public enterprises minister Lynne Brown, cut his teeth in the digital game with the ill-fated South African messenger MXit. Once it had 88 million users, but it lost out to competition from newcomers like WhatsApp and disappeared.

Jordaan secured R50 million in grant funding and is now working out how to earn revenue from GovChat

“Governments around the world are wanting to procure Govchat software as a service . We are run through grant funding, we are now working on that revenue commercial model and it will be a global model . Quite a few governments are requesting Govchat software and that will be the first commercial model for Govchat,” he says.

Meta referred Billionaire Tomorrow to a WhatsApp spokesperson.

“WhatsApp helps to provide people with important information from trusted sources, and we are aware of the role the service plays in connecting South African citizens with their Government. That’s why we want to work with GovChat in compliance with internationally recognised regulatory standards to provide this service. However, GovChat has repeatedly refused to comply with our policies which are designed to protect citizens and their information, preferring to prioritise its own commercial interests over the public. We will continue to defend WhatsApp from abuse and protect our users,” says a  WhatsApp Spokesperson.

Be interesting to see how much damages GovChat will claim.