IN THE COMPETITION TRIBUNAL

HELD IN PRETORIA

Case no. IR165Nov20

In the matter between: GOVCHAT PROPRIETARY LIMITED

First Applicant

HASHTAG LETSTALK PROPRIETARY LIMITED Second Applicant

and

FACEBOOK INC. First Respondent WHATSAPP INC. Second Respondent

RESPONDENTS’ HEADS OF ARGUMENT

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TABLE OF CONTENTS

INTRODUCTION ........................................................................................................ 3

REQUIREMENTS FOR INTERIM RELIEF .............................................................. 10

FACTUAL BACKGROUND RELEVANT TO THIS APPLICATION......................... 19

The trial nature of GovChat’s early access through Praekelt ......................... 20

GovChat’s current use of the WhatsApp Business API .................................. 23

The consistency of WhatsApp’s terms and their enforcement ....................... 28

GovChat’s commercial access to the WhatsApp Business API via #LetsTalk

.............................................................................................................................. 34

THE APPLICANTS ARE NOT ENTITLED TO INTERIM RELIEF ........................... 38

The first factor: evidence relating to the alleged prohibited practices .......... 40

The second factor: preventing serious or irreparable damage to the

applicant .............................................................................................................. 62

The third factor: the balance of convenience ................................................... 64

APPROPRIATE RELIEF .......................................................................................... 65

CONCLUSION ......................................................................................................... 67

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INTRODUCTION

1 At its core, this case concerns the right and ability of WhatsApp Inc. (“WhatsApp”)

to enforce the contractual terms that govern the use of its paid business

messaging platform, the WhatsApp Business API.1 The applicants are blatantly

breaching these terms of use in pursuit of their narrow commercial interests, and

seek interim relief from the Tribunal under section 49C of the Competition Act 89

of 1998 (“the Act”) permitting them to continue doing so.

2 The applicants seek to justify this extraordinary relief on purported competition

law grounds, but the dispute between the parties is in truth simply a commercial

one which does not raise any legitimate competition law considerations. In short,

there is no basis under the Act for the applicants to be permitted to continue

using the WhatsApp Business API in clear violation of the contractual terms of

use applicable thereto simply because that suits their chosen business model.

3 To be able to use WhatsApp’s paid business messaging platform, a business

end-user (“a user”) must, amongst other things, have –

3.1 either –

3.1.1 installed and managed the WhatsApp Business API on its own

infrastructure (“direct integration”); or

1 API stands for application programming interface

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3.1.2 contracted with an authorised service provider, known as a

Business Solution Provider (“BSP”), “that has entered into a

contractual relationship with WhatsApp and is authorised by

WhatsApp to deploy the WhatsApp Business Solution as a

service provider on behalf of its clients”;2 and

3.2 created a WhatsApp Business Account (“WAB account”) in its own

name.3

4 The direct integration route has been undertaken by a relatively small number of

businesses, owing to the considerable internal resources that are required.

WhatsApp is currently not taking on any new direct-hosting business customers.

The majority of business users wishing to use the WhatsApp Business API have

instead contracted with an authorised BSP.4 In South Africa, business users

may contract with one of four authorised BSPs in the country,5 or with any other

authorised BSP that services the region.6

5 During the development of this new product, and prior to its commercial launch,

WhatsApp had provided access to a limited number of partners on a trial basis.7

It was through one of these partners, Praekelt Consulting (Pty) Ltd (“Praekelt”),

that GovChat first came to make use – without charge – of what was then referred

2 Answering affidavit, paras 35 – 36, p 523 3 Answering affidavit, para 11, p 517, para 68, p 530 and para 70 p 531 4 Answering affidavit, paras 35 – 36, p 523 5 The four authorised BSPs in South Africa are InfoBip, Clickatell, Imimobile, and Praekelt. Answering affidavit, para 37, p 523 6 Answering affidavit, para 37, p 523 7 Answering affidavit, para 56, pp 527 – 528

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to as the “enterprise API”,8 and which eventually became known as the

WhatsApp Business Solution or the WhatsApp Business API.

6 WhatsApp never approved GovChat’s trial use.9 In November 2018, following

the public commercial launch of the WhatsApp Business API, Praekelt informed

GovChat that this access would end.10

7 In 2019, WhatsApp initiated a government programme to gain insights into how

government entities could best use the WhatsApp Business API, a product which

had been designed with the business user in mind.

8 Any government entity that wishes to make use of the WhatsApp Business API

is required to comply with all the standard terms and conditions, including the

requirement to establish a WAB account in its own name.11

9 In this regard, a government entity is treated no differently from any other user.

That said, the government programme imposes additional restrictions for

government entities, including an additional layer of review for the specific

proposed use (“use-case”).

8 Answering affidavit, paras 56 – 58, pp 527 – 528 9 Answering affidavit, para 61, pp 528 – 529 10 Answering affidavit, para 61, pp 528 – 529; replying affidavit, annexure “RA4” p 755– 757 email from Praekelt’s Morgan Collett dated 23 November 2018 (sent at 09h19) 11 Answering affidavit, para 68, p 530 and para 70 p 531

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10 On two occasions after the closure of its test account at Praekelt, GovChat

applied unsuccessfully with a different BSP to open a new WAB account in its

own name.12 As explained in the answering affidavit:13

“These attempts were turned down because the Government programme had

been suspended and for the reason that GovChat was not the intended user of

the account but that the Government entities in question would be. I also note

that the limited onboarding which initiated in early 2020 related to COVID-19,

and WhatsApp was only onboarding health-related Government entities during

these times.”

11 GovChat subsequently applied through a third BSP to open a WAB account

under the name of #LetsTalk, its wholly-owned subsidiary, and did not disclose

that the purpose was to provide messaging for government entities.14 This meant

that the application evaded the requisite review by WhatsApp’s government

programme team.

12 In March 2020, GovChat – through #LetsTalk – launched the messaging services

at issue in this application, on behalf of national government entities, such as the

national Department of Health (“the NDoH”).15

13 There is a dispute as to whether GovChat, in seeking to secure access to the

WhatsApp Business API by way of #LetsTalk, sought to deceive WhatsApp. The

respondents allege that GovChat chose to hide behind a corporate entity with no

12 For further detail on these unsuccessful attempts, see answering affidavit, paras 75 – 78, p 532 13 Answering affidavit, para 74, p 532 14 Answering affidavit, para 80, p 533 15 Answering affidavit, annexure “BES20”, p 608 – 613; founding affidavit, annexure “FA13”, p 126 – 130

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easily discernible links to the government entities in question; the applicants say

“[t]here was nothing untoward about the creation of #LetsTalk, and GovChat

never attempted to conceal its existence, or GovChat’s ties to the company”.16

14 Nothing turns on this dispute. What matters for purposes of this application is

that, at the time #LetsTalk opened its WAB account, WhatsApp was unaware of

#LetsTalk’s link to GovChat. This is made clear in email correspondence in early

June 2020 between WhatsApp’s Mr Gareth Bray and InfoBip’s Ms Katerina

Parimon. We return to this correspondence later when dealing with the factual

background to this application.17

15 Moreover, the allegation that “GovChat’s connection with #LetsTalk was ... made

plain at the outset”, which is based on the two entities being “named parties to

the agreement with InfoBip”,18 does not mean that WhatsApp was made aware

of that arrangement (to which it was not a party). It was not. The applicants

appear to accept this, going no further than to assert that “it was reasonable for

GovChat to infer that Facebook had seen – and approved – a draft of the InfoBip

agreement”.19

16 Having made use of the WhatsApp Business API in violation of the relevant terms

of use, #LetsTalk was informed in July 2020 that its WAB account would be

16 Replying affidavit, para 76, p 714 17 See para 87 below 18 Replying affidavit, para 76, p 714 19 Replying affidavit, para 76.1.2, p 715. As the answering affidavit repeatedly makes clear, it is WhatsApp – and not Facebook – that approves any user’s request to be onboarded to the WhatsApp Business API.

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deactivated on 6 August 2020.20 This deadline was subsequently extended on a

number of occasions, to enable GovChat’s government clients to engage the

services of an authorised BSP directly in order to open their own WAB accounts,

as the WhatsApp Business API terms of use require.

17 By early November 2020, some three months later, these steps had not yet been

taken. This resulted in a final deadline of 16 November 2020 being set.21 But just

one business day before that deadline, the applicants approached this Tribunal,

on an urgent basis, seeking interim relief in terms of section 49C of the Act.

18 In their papers in this application, the applicants included a draft complaint to the

Competition Commission,22 which effectively alleges that the enforcement of

WhatsApp’s terms of use constitutes anti-competitive conduct. In particular, the

draft complaint alleges that this conduct amounts to an abuse of dominance in

contravention of sections 8(1)(b), 8(1)(c) and/or 8(1)(d)(ii) of the Act.23

19 By way of relief, the applicants seek an order interdicting the respondents from

“off-boarding” them from the WhatsApp business platform, either pending the

outcome of their contemplated complaint, or for a period of six months, whichever

occurs first.24 In short, they seek an order permitting them to continue using

WhatsApp’s proprietary software in a manner that violates its terms of use.

20 Answering affidavit, para 95, p 537 21 Answering affidavit, para 113 p 542 22 A complaint was allegedly filed with the Commission after the present application was instituted We deal with the implications of this sequence of events at paras 23 –27 below 23 The draft complaint incorrectly refers to sections 8(b), 8(c) and 8(d)(ii) 24 Prayer 2, notice of motion, pp 2 – 3

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20 This matter has nothing to do with competition law, let alone anti-competitive

practices; GovChat does not compete with WhatsApp, WhatsApp does not

compete with GovChat, and there is no market from which WhatsApp seeks to

exclude GovChat. Instead, the dispute between the parties is purely contractual,

concerning the applicants’ demand to use the WhatsApp Business API in a

manner that suits GovChat’s chosen business model, notwithstanding that this

is fundamentally inconsistent with WhatsApp’s terms of use.

21 Recently, in Africa People Mover (Pty) Ltd v Passenger Rail Agency of South

Africa and Others, this Tribunal warned against it “being used for ulterior motives

by parties who want to avoid their contractual obligations to third parties”.25 We

submit that this is precisely what the applicants have sought to do in bringing this

application for interim relief.

22 In what follows, we deal with the following four topics in turn:

22.1 the requirements for interim relief in terms of section 49C of the Act;

22.2 a summary of the factual background relevant to this application;

22.3 why the applicants have failed to make out a case for the grant of interim

relief; and

25 Case no. IR028May19 at para 35

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22.4 what would constitute appropriate relief should this Tribunal come to the

conclusion that some form of interim relief is required.

REQUIREMENTS FOR INTERIM RELIEF

23 A jurisdictional prerequisite for the grant of interim relief is that an applicant must

already have filed a complaint with the Commission. As the Tribunal explained

in Papercor CC v Finwood Papers (Pty) Ltd and Others:26

“We find that the submission of a complaint in the manner prescribed by the

Commission Rules is a prerequisite for an application for interim relief. ... The

fact that subsequent to the institution of these proceedings the applicant had

submitted its complaint does not help validate what already is a nullity. This is

not mere formalism. A remedy cannot be “interim” if the very procedure to

which it is ancillary has not yet been invoked.”

24 At the time these proceedings were initiated, the applicants’ complaint had yet to

be filed with the Commission. All that is said by the applicants, in reply, is that

“the applicants have submitted a complaint to the Competition Commission.”27

Significantly, we are not told when the complaint was filed, or to what extent – if

any – it differs from the draft complaint attached to the founding affidavit.

25 Because a copy of the filed complaint is not part of the record in this application,

this Tribunal cannot be certain that the alleged practice in respect of which

interim relief is sought is indeed the very same practice that forms the subject of

26 Case no. 51/IR/Apr00; [2000] ZACT 44 (20 October 2000) at para 7. See also, Nqobion Arts Business Enterprise CC and Business Place Joburg & BeEntrepreneuring, case no: 80/IR/Aug05 [2006] ZACT 24 (22 March 2006) at para 16 (our emphasis) 27 Replying affidavit, para 99, p 724

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the complaint. Given the manner in, and extent to which, the applicants’ case

has morphed over time, this is a justifiable concern.

26 Either way, however, the fundamental point is that the applicants did not submit

a complaint to the Commission before filing their interim relief application under

section 49C.

27 As this Tribunal correctly observed in Papercor, it has “no inherent jurisdiction to

hear an application for interim relief that does not conform to the strictures of [the

Act]”.28 Accordingly, the applicants’ failure to comply with the relevant

requirement in section 49C means that this Tribunal has no jurisdiction even to

entertain this application, which should accordingly be dismissed with costs.

28 Nevertheless, for the sake of completeness, and in order to prevent any attempt

by the applicants to reinstitute their application (and any consequent delay), we

proceed to address the merits of the application below. As we demonstrate, even

if the Tribunal were to consider the merits of the application, it is misconceived,

and there is no basis for the relief sought by the applicants.

29 Because the grant of interim relief in competition proceedings is an extraordinary

remedy,29 this Tribunal has expressed its extreme reluctance to grant such relief

in the absence of evidence of restrictive practices:30

28 See above fn 26 at para 23 29 Schering (Pty) Ltd v New United Pharmaceutical Distributors (Pty) Ltd case no. 11/CAC/Aug01 at p 9 30 Nuco Chrome (Pty) Ltd v Xstrata South Africa (Pty) Ltd [2004] 2 CPLR 341 (CT) at p 347

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“[W]e would, as we have observed elsewhere, be extremely reluctant to

uphold an application for interim relief in the absence of evidence confirming

the restrictive practice alleged”.

30 This cautious approach has been endorsed by the Competition Appeal Court

(“the CAC”), in National Association of Pharmaceutical Wholesalers v Glaxo

Wellcome (Pty) Ltd, in which it held as follows:31

“An interim interdict is by its very nature a temporary and exceptional remedy

which is granted by a court before the rights of the parties are fully determined.

Due caution has to be exercised in the grant of the relief. Relief should only

be granted if a proper case is made out.”

31 This Tribunal has further held that it “will not grant interim relief lightly”, and that

interim relief “must be approached with care”, given that the evidence in

applications for interim relief is necessarily limited, whilst antitrust adjudication

is “enormously influenced by the facts particular to each case”.32 This is

especially so when, as in all section 49C cases, the proceedings are conducted

on the papers before the Tribunal, without the benefit of oral evidence.

32 What is of particular concern in this matter is that, instead of concentrating on

the facts of this case, the applicants seek to place reliance on untested

allegations contained in ongoing matters relating to separate conduct in other

jurisdictions. Included amongst these is a complaint filed against Facebook by

31 National Association of Pharmaceutical Wholesalers and Others v Glaxo Wellcome (Pty) Ltd and Others [2005] 1 CPLR 102 (CAC), at para 8 32 DW Integrators CC v SAS Institute (Pty) Ltd [1999–2000] CPLR 191 (CT) at paras 16 – 17

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the US Federal Trade Commission (“FTC”) on 9 December 2020, more than

three weeks after the filing of the applicants’ interim relief application.

33 Treating the allegations contained in the FTC complaint as fact, the applicants

leap to the following conclusion:33

“The only reasonable conclusion which GovChat can reach in the current

circumstances is that Facebook is employing tried and tested methods in

South Africa in order to exclude GovChat.”

34 While the debate on the admissibility of similar fact evidence is far from settled,34

what the applicants would have this Tribunal do is to place direct reliance on

untested and unrelated allegations made in respect of Facebook – and not

findings of fact – to reach conclusions relating to separate conduct by WhatsApp

in respect of two South African companies. There is simply no basis in law, or in

fact, for such an approach.

35 The Tribunal has also made it clear that “[c]aution is particularly well-advised

when dealing with the interface between anti-trust and intellectual property.”35

We submit that the circumstances of this case, dealing with access to a platform

in respect of which WhatsApp has proprietary rights, call for considerable

caution. Accordingly, the Tribunal should be loath to intervene in a contractual

relationship of this type which relates directly to “the interface between anti-trust

and intellectual property”.

33 Replying affidavit, para 115, p 731 34 See Savoi and Others v National Director of Public Prosecutions and Another 2014 (5) SA 317 (CC) at paras 50 – 59 35 DW Integrators at para 18

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36 An applicant seeking interim relief in terms of section 49C of the Act must show

that the relief it seeks is “reasonable and just”, having regard to three factors:36

36.1 the evidence relating to the alleged prohibited practice;

36.2 the need to prevent “serious or irreparable damage” to the applicant;

and

36.3 the balance of convenience.

37 In terms of section 49C(3) of the Act, the standard of proof in interim relief

proceedings is the same as in applications for interim interdicts brought under

the common law in the High Court. In York Timbers Ltd v SA Forestry Company

Ltd,37 this was interpreted as referring to the well-known test of a prima facie

right though open to some doubt. Applying this to section 49C proceedings, the

Tribunal set out the following two-stage approach:38

“[W]e must first establish if there is evidence of a prohibited practice, which is

the Act’s analogue of a prima facie right. We do this by taking the facts alleged

by the applicant, together with the facts alleged by the respondent that the

applicant cannot dispute, and consider whether having regard to the inherent

probabilities, the applicant should on those facts establish the existence of a

prohibited practice at the hearing of the complaint referral.

36 Section 49C(2)(b) 37 Case no. 15/IR/Feb01; [2001–2002] CPLR 408 (CT) at para 62 38 York Timbers at paras 64-65 (our emphasis). See also Nkosinauth Ronald Msomi t/a Minnie Cigarette Wholesalers v British American Tobacco South Africa (Pty) Ltd [2001–2002] CPLR 383 (CT) at para 12

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If the applicant has succeeded in doing so we then consider the ‘doubt’ leg of

the enquiry. Do the facts set out by the respondent in contradiction of the

applicant’s case raise serious doubt or do they constitute mere contradiction

or an unconvincing explanation? If they do raise serious doubt the applicant

cannot succeed.”

38 However, unlike the position at common law, “[a]n interim relief order under the

Act does not provide a remedy to permit a person claiming a right to enjoy the

exercise of that right until the right is finally determined.” As Unterhalter AJA

explained in Business Connexion (Pty) Ltd v Vexall (Pty) Ltd:39

“Rather, the Tribunal is empowered to regulate how competition in the market

is to take place for a six or twelve month period. That is a different competence

to that of a court adjudicating a dispute of right; it is a regulatory competence

to decide whether the state of competition in the market must endure,

notwithstanding the evidence that a prohibited practice is taking place, or

whether the Tribunal should order a change.”

39 As regards the second and third factors in section 49C(2), these are not looked

at in isolation, but are to be taken in conjunction with one another when the

Tribunal exercises its overall discretion whether to grant the relief sought.40 In

this regard, the Tribunal has referred with approval to the dictum of Holmes JA

in Eriksen Motors (Welkom) Ltd v Protea Motors Warrenton,41 that the three

factors –

“are not individually decisive, but are interrelated, for example, the stronger

the applicant’s prospect of success the less the need to rely on prejudice to

39 Business Connexion (Pty) Ltd v Vexall (Pty) Ltd and Another case no. 182/CAC/Mar20; [2020] ZACAC 4 (15 July 2020) at para 18 40 York Timbers at para 66 41 1973 (3) SA 685 (A) at 691F

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himself. Conversely, the more the element of ‘some doubt’, the greater the

need for the other factors to favour him.”42

40 That said, as noted above, the Tribunal has held that it “would be extremely

reluctant to grant interim relief in the face of unconvincing evidence of a

restrictive practice.”43 Thus if an applicant does not make out a prima facie case

of a restrictive practice on the part of a respondent, it would ordinarily be

unnecessary for the Tribunal even to consider the remaining requirements.44

41 However, insofar as it may be necessary to have regard to the requirement of

serious or irreparable damage, the applicable test formulated by this Tribunal is

as follows:45

“In order to establish serious or irreparable damage the evidence must

demonstrate that, on the face of it, absent a granting of interim relief, the ability

of the applicants to remain as viable competitors within the market is

“seriously” or “irreparably” threatened. In such circumstances, the material

content of the applicants’ right to move to the final stage of adjudication is

called into question because, even if relief was granted at that stage, it may

nevertheless not assist the applicants in their attempt to remain viable

competitors.”

42 See Natal Wholesale Chemists (Pty) Ltd v Astra Pharmaceutical Distributors (Pty) Ltd [2001–2002] CPLR 363 (CT) at para 34; Nedschroef Johannesburg (Pty) Ltd v Teamcor Ltd and Others [2006] 1 CPLR 98 (CT) at para 23; The Bulb Man (SA) Pty Ltd v Hadeco (Pty) Ltd [2006] 2 CPLR 559 (CT) at para 33 43 National Association of Pharmaceutical Wholesalers and Others v Glaxo Wellcome (Pty) Ltd and Others [2003] 2 CPLR 402 (CT); Nuco Chrome (Pty) Ltd and Xstrata South Africa (Pty) Ltd, Rand York Minerals [2004] 2 CPLR 341 (CT) at p 347; York Timbers at para 101 44 See, for example, Msomi at para 13; and The Bulb Man at para 35 45 National Association of Pharmaceutical Wholesalers at para 147 (our emphasis)

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42 In this regard, the CAC noted in Business Connexion that “here too the analogue

of interim interdicts as an equitable remedy at common law must be approached

with care”:46

“The common law remedy asks what well-grounded apprehension of

irreparable harm will be suffered by the applicant if interim relief is not granted

and the applicant succeeds in proving the right, now prima facie established.

This concerns an interference with an applicant’s rights and the harm that may

be suffered by an applicant as a result of such interference until the court can

finally determine the question of rights. Interim relief under s49C requires an

enquiry that is similarly structured, but distinct in a number of respects. The

need for intervention is a function of the probability of serious or irreparable

damage occurring, if no intervention is ordered by the Tribunal before it can

make a final determination as to whether the alleged prohibited practice has

taken place. It is the damage to the competitive position of the applicant that

the prohibited practice may cause that marks out this enquiry. Other forms of

damage to the applicant are not relevant because the Act’s purpose is to

maintain and promote competition in the market.”

43 Put simply, commercial harm to an applicant will not suffice.47 Furthermore, the

assessment of serious or irreparable harm, as contemplated by the Act, refers

to competition harm in the markets in which the applicants operate, and not

prejudice or other forms of harm to third parties.

44 Insofar as the balance of convenience in section 49C is concerned, the CAC

has made it clear that this “is a direct borrowing from the common law.” Under

the common law, “the broader public interest, and not only the interests of the

litigating parties, must be placed in the scales when weighing where the balance

46 Business Connexion at para 21 (our emphasis) 47 See also Malefo v Street Pole Ads (SA) (Pty) Ltd case no. 35/IR/May05 at para 38

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of convenience lies.”48 In the context of applications for interim relief brought in

terms of section 49C of the Act, the balance of convenience is ordinarily

determined in the following manner:49

“It weighs the prejudice the applicant will suffer if the interim interdict is not

granted against the prejudice to the respondent if it is granted. This requires

an equitable reckoning as to who bears the greater burden of error. If the

interim order is granted and no case is ultimately established to prove the

alleged prohibited practice, what prejudice will have been suffered by the

respondent, and how might that prejudice be mitigated? So too, if the interim

order is refused and the prohibited practice is ultimately proven, what prejudice

will the applicant suffer in the interim. Here too, the currency of prejudice is

reckoned by recourse to the consequences for the competitive positioning of

the parties in the market. A respondent that is required to desist from conduct

that gives it a legitimate competitive advantage suffers prejudice. An applicant

that is required to endure an unlawful competitive disadvantage also suffers

prejudice. How to weigh prejudice in the balance is a difficult task. Hence the

warranted caution with which the Tribunal and this court have approached the

exercise of the power to grant an interim interdict.”

45 That is not necessarily the end of the enquiry. Even if the Tribunal finds that an

applicant has met all of the stipulated requirements in section 49C, it may still,

in the exercise of its discretion, refuse to grant interim relief if such relief would

not be “reasonable and just” in the circumstances.50 As the CAC noted in

National Association of Pharmaceutical Wholesalers:51

48 Cipla Medpro (Pty) Ltd v Aventis Pharma SA and Related Appeal 2013 (4) SA 579 (SCA) at para 46, read with para 52 49 Business Connexion at para 22 50 Nedschroef at paras 25-26; Replication Technology Group (Pty) Ltd v Gallo Africa Ltd [2008] 1 CPLR 77 (CT) at para 17 51 National Association of Pharmaceutical Wholesalers at para 8

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“The above requirements are however not determinative and even where all

these requirements are present a court has discretion to refuse an interim

interdict.”

46 As we explain in more detail below, the applicants have not met any of the above

requirements for interim relief in the present proceedings.

FACTUAL BACKGROUND RELEVANT TO THIS APPLICATION

47 The relevant factual background is set out in some detail in the answering

affidavit.52 It deals with the nature and development of the WhatsApp Business

API, as well as the creation of WhatsApp’s government programme, and the

repurposing of that programme to support governments globally with their

responses to the COVID-19 pandemic. In addition, it explains WhatsApp’s terms

of use, the applicants’ refusal to comply with those terms, and the efforts made

by WhatsApp to regularise the applicants’ non-compliant conduct.

48 In what follows below, we focus on the following four issues:

48.1 the trial nature of GovChat’s early access through Praekelt;

48.2 GovChat’s current use of the WhatsApp Business API, which violates

fundamental elements of WhatsApp’s business terms and policies;

48.3 the consistency of WhatsApp’s terms and their enforcement; and

52 Answering affidavit, paras 33 – 122, pp 522 – 544

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48.4 GovChat’s commercial access to the WhatsApp Business API via

#LetsTalk.

The trial nature of GovChat’s early access through Praekelt

49 The WhatsApp Business API was launched commercially in August 2018.53

Prior to that, during the “alpha-phase” of development, “WhatsApp sought input

from a limited number of entities who agreed to test the product and provide

feedback.”54 It was as part of this product development process that Praekelt

was given access to the early version of the WhatsApp Business API (“the

enterprise API”), to provide messaging services to the NDoH in respect of a

handful of health-related programmes.55 The answering affidavit explains:56

“At the time that Praekelt agreed to provide the NDoH access to the alpha

version of the enterprise API, WhatsApp was in the early experimentation

stages of the enterprise API product and had not yet adopted the current BSP

configuration for accessing the WhatsApp Business API nor had it fully

developed the policies regarding onboarding. For this reason, when Praekelt

set up the NDoH account, it created an account for the NDoH under its own

Facebook Business Manager account. Given that Praekelt’s account was

already ‘verified’, it could open the WAB Account without further verification of

the business identity.”

53 Answering affidavit, para 35, p 523 54 Answering affidavit, paras 55 – 56, pp 527 – 528 55 Answering affidavit, para 56, pp 527 – 528 56 Answering affidavit, para 57, p 528

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50 Significantly, WhatsApp had not yet made commercial terms publicly available,

and no one was charged for using this early enterprise API:57

“Praekelt’s testing mode ... enabled these entities to engage in limited

messaging using WhatsApp’s enterprise API (during the alpha-phase). These

participants were not required to pay for access to the experimental enterprise

API, and they were only able to send a limited number of messages.”

51 The answering affidavit also sets out how Praekelt expanded the reach of its

use of the enterprise API to include four for-profit entities “that were interested

in using the enterprise API for social impact projects.” Like the NDoH’s account,

each of these accounts was opened under Praekelt’s Business Manager

account number, and was thus not subject to WhatsApp’s business verification

process.58

52 GovChat was one of these commercial entities. At the time, GovChat’s use of

the platform was extremely limited, both in terms of end-user traffic, as well as

use-case.59

53 As this permitted use of the platform via Praekelt was purely for testing

purposes, it ultimately came to an end, in connection with the commercial launch

57 Answering affidavit, para 59, p 528 (our emphasis) 58 Answering affidavit, paras 11 and 57 , pp 517 and 528 – 59 Answering affidavit, paras 57 – 60, p 528

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of the WhatsApp Business API in August 2018. Again, the answering affidavit

explains:60

“WhatsApp never gave approval for GovChat or the other commercial entities

which had a test WhatsApp account with Praekelt to ‘go live’ with the enterprise

API. Instead, WhatsApp informed Praekelt that any for-profit entity then hosted

by Praekelt would need to be removed from the platform. In November 2018,

Praekelt confirmed with GovChat that the GovChat test number opened under

Praekelt’s Business Manager account would be closed. Praekelt suggested

that GovChat apply to open a WAB Account with a different BSP, which might

have the necessary approval from WhatsApp to connect for-profit entities.”

54 In reply, the applicants devote significant attention to what they refer to as

GovChat as an alleged ‘test’ case for the use of the WhatsApp Business API,

denying “that GovChat was on-boarded as part of a ‘test phase’ of the WhatsApp

Business API.”61 Yet the applicants’ own evidence, introduced in the replying

affidavit, undermines this claim:

54.1 One annexure, presented as evidence of the allegedly “live” WhatsApp

Business API account at Praekelt, and titled “GovChat Demo”, clearly

describes a trial account, replete with unfinished software and broken

links.62

54.2 Another annexure is a transcript of a promotional video, allegedly

“posted” (without further clarification or context) on 2 October 2018. This

video appears to be addressing aspiration and was prepared long

60 At para 61, pp 528 – 529 61 Replying affidavit, para 17, p 687 62 Replying affidavit, annexure “RA6”, pp 765 – 779

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before any of the GovChat services at issue in this application were

launched.63

54.3 The third and final annexure purporting to establish that GovChat went

live with Praekelt establishes the very opposite: that WhatsApp services

were ultimately excluded from the GovChat-Praekelt partnership, which

focused instead on email, USSD, and web access.64

55 Furthermore, the applicants fail to adduce any evidence that contradicts

WhatsApp’s central point: that GovChat had stopped using the platform, which

it had first accessed via Praekelt, and only regained access (earlier last year)

via a new entity (#LetsTalk), a new BSP, and a new WhatsApp account number,

for an entirely new use-case.

GovChat’s current use of the WhatsApp Business API

56 As noted above, access to the WhatsApp Business API requires each user to

open a separate WAB account, in its own name, through an authorised BSP.

This applies to commercial and government entities alike:65

“One requirement of WhatsApp’s terms of service is that any entity that applies

for a WAB Account complete the process for business verification, as well as

undergoing screening for compliance with economic sanctions and the

WhatsApp Business and Commerce Policies .... While WhatsApp’s

63 Replying affidavit, annexure “RA1”, p 747 64 Replying affidavit, annexure “RA3”, pp752 – 754. For high scaled messaging over the WhatsApp Business API, GovChat was to seek access via a different BSP (identified as Nexmo), a proposal which apparently never came to fruition. 65 Answering affidavit, para 44, p 525

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requirements and policies with respect to the use by Governments and

Government entities of the WhatsApp Business API are under continuous

review, this fundamental requirement applies to Government entities as it does

to any business or organisation seeking to open a WAB Account.”

57 WhatsApp’s Business Terms of Service explicitly prohibit a business user from

“impersonat[ing] or register[ing] on behalf of any person or entity or otherwise

misrepresent[ing] your affiliation with a person or entity.”66 In addition, when

creating a WAB account, a business user must submit a “display name” for use

in messaging that conforms to the business entity’s verified identity.67

58 This requirement exists for good reason. If the WAB account could be held by a

third party, WhatsApp would not be able to determine whether that party was

facilitating access to the platform for a business and/or government entity that

would be ineligible – had it applied in its own name – to open a WAB account.68

In addition, WhatsApp users could be confused or misled as to the true identity

of the entity with whom they were communicating, and with whom they might be

sharing sensitive information about their finances, health status, or political

views. As the holder of proprietary rights in the WhatsApp Business API,

WhatsApp is entitled to insist on these protections for itself and for its users.69

59 Moreover, WhatsApp’s terms do not permit any entity to use one WAB account

to service multiple business users.70 In order to comply with US laws relating to

66 Answering affidavit, annexure “BES5” at 6.(d) (“Acceptable Use”) p 566 – 574 67 Answering affidavit, para 82, p 533 68 Answering affidavit, para 70, p 531 69 Answering affidavit, para 51, p 526 70 Answering affidavit, para 52, p 527, annexure “BES39” p 654 – 656

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economic sanctions,71 WhatsApp must screen all business users to ensure that

it is not providing access to sanctioned entities.72 WhatsApp would not be able

to screen businesses if they are grouped together under a master WAB account.

60 Aggregation of messaging on behalf of multiple entities into a single WAB

account, as is GovChat’s practice, gives rise to additional violations of

WhatsApp’s terms. Aggregation of different businesses under one WAB account

creates a situation in which two or more businesses’ data (including any

consumer data that they collect) may be commingled in the same storage.

61 WhatsApp’s Business Solutions Terms prohibit business users from sharing,

selling, or distributing data obtained from using the WhatsApp Business API with

any other customer or other third party, or from combining this data with other

third-party sources of data.73

62 The WhatsApp Business Terms of Service further require that any service

provider use any and all data derived from use of the WhatsApp Business API

solely for the benefit of each client.74 These privacy safeguards are seriously

undermined where, as is the case with GovChat, an entity commingles message

data and customer contacts for multiple clients within a single WAB account.

63 Entities whose messaging is aggregated would also confront serious obstacles

should they choose to end their relationships with GovChat. WhatsApp’s terms

71 These are applicable because WhatsApp receives payment for use of the WhatsApp Business API. 72 Answering affidavit, para 44, p 525 73 Answering affidavit, para 47, p 525 –526 74 Answering affidavit, “BES5” p 568 – 574

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state that if a business (or government entity) requests to assume control of its

WAB account, the relevant BSP “must reasonably and in a timely manner …

assist … to transfer the WABA account and all related data”, and “promptly

delete any WABA data and information from [its] own system”.75 Yet where, as

with GovChat, the service provider has aggregated different entities, compliance

with these requirements risks transferring (or deleting) the data of numerous

entities should a single client choose to end its relationship with GovChat.

64 It is through the process of establishing a WAB account that the user accepts

and is bound by the WhatsApp business terms of use. This is key for

enforcement purposes, enabling WhatsApp to have recourse if a user, for

example, starts sending promotional advertising, spam, illegal or any other

prohibited message content, or otherwise violate the terms of use or policies.

This requirement is essential to ensure the integrity of the platform, as well as

to protect WhatsApp users.

65 Like all business users, government entities are also required to submit to the

verification and review processes:76

“As is true with regard to any entity, WhatsApp’s verification and review

processes with respect to Government entities and their particular use-cases

would be inhibited if a WhatsApp Business API user were to open, as the

applicants seek to do, a WAB Account in its own name and then resell or

distribute the WhatsApp Business API to Government users in respect of which

WhatsApp would have no visibility. Moreover, enabling Government entities to

obtain access through [an] unauthorised channel deprives WhatsApp of the

75 Answering affidavit, annexure “BES3” p 560 – 566 76 Answering affidavit, para 70, p 531

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opportunity to understand and review the proposed use-case(s) and assess

compliance with WhatsApp’s policies, the requirements of the global

Government programme, and economic or trade sanctions screening

requirements under applicable laws.”

66 Moreover, government entities (unlike commercial entities) are required to

submit to an additional review by the WhatsApp government programme team

of the actual purpose for which the entity in question seeks to use the WhatsApp

Business API – the “use-case”. This requirement applies solely to government

entities. The answering affidavit explains why this is necessary:77

“This vetting process is necessary both to ensure that the intended use-case

complies with our policy restrictions and can be well supported by the product

in its current (still beta, as explained above) stage, and also so that the team

can use this early learning phase effectively to understand the particular and

potentially novel ways that Governments may seek to use the WhatsApp

Business API.”

67 The rapid global expansion of WhatsApp’s government programme, a direct

consequence of the COVID-19 pandemic, has placed a huge burden on the

government programme team’s limited resources. Given this reality, as well as

the urgency of the COVID-19 health emergency, WhatsApp decided to focus

the programme exclusively on supporting government entities charged with the

COVID-19 response, and to suspend further access for any new government

use-case that does not fall within the narrowed focus of the programme. In such

circumstances, the verification and review processes take on even greater

significance.78

77 Answering affidavit, para 68, p 530 78 Answering affidavit, paras 71 – 72, p 531

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68 As matters stand, WhatsApp continues to limit its government programme to

focus on the response to the COVID-19 pandemic.79

“With the advent of COVID-19, WhatsApp decided to expand its Government

pilot programme to support those Government entities with jurisdiction to

manage the response to the evolving pandemic. Thus, in January and

February of [2020], the WhatsApp Government programme became the

‘Government COVID programme’ and turned its focus to assisting global

health authorities (such as the World Health Organization) and national health

ministries to set up WAB Accounts to provide ‘Health-Alert’ lines or similar

COVID-19 chatbots. Over the following months, WhatsApp extended the

programme to entertain requests from other impacted national ministries and

from regional Governments, based on the express direction of the national

health ministries, and then to support Government entities managing other

aspects of the COVID-19 response (in areas such as public education,

economic recovery and social welfare). The Government COVID programme

has continued to expand in order to assist Governments around the world and

their evolving response to this health emergency.”

69 It is within this context that WhatsApp’s actions relating to #LetsTalk’s use of the

WhatsApp Business API must be understood.

The consistency of WhatsApp’s terms and their enforcement

70 In reply, the applicants have sought to muddy the waters by disputing a wide

range of allegations that, even if decided in their favour, would not tip the scales.

We have already addressed some of them. Two additional issues deserve

79 Answering affidavit, paras 71 – 72, p 531

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attention: the claim that WhatsApp’s terms have changed repeatedly; and the

allegation that WhatsApp applies its terms inconsistently.

71 The two examples the applicants rely upon as alleged evidence of WhatsApp’s

“convoluted, complex and chameleonic terms” are (a) the change from no terms

(prior to the development and launch of the WhatsApp Business API) to the

published commercial terms; and (b) the recent introduction of an internet

service vendor (“ISV”) amnesty programme, with terms applicable only to those

entities. The first barely requires a response; the second reveals the applicants’

misunderstanding of the ISV programme. Neither supports their case.

72 The irrelevance of the first example is self-evident. The allegation that the terms

of use changed “after GovChat had started to use the WhatsApp platform”80 is

disingenuous, because GovChat first accessed the platform (via Praekelt) prior

to its commercial launch. Having lost access to the platform in this way, GovChat

only returned – via #LetsTalk – in 2020. There is no allegation, nor could there

be, that the material terms have changed since then.

73 With regard to the second example, the applicants have clearly misunderstood

both the WhatsApp ISV programme, as well as the document on which they rely

– the “WHATSAPP BSP ISV FAQ” (“the FAQ”).81 Far from illustrating any unfair

changes to terms, WhatsApp’s treatment of unauthorised ISVs highlights its

80 Replying affidavit, para 48, p 702 81 Replying affidavit, annexure “RA5”, pp 758 – 764

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commitment to the neutral, even-handed, and reasonable enforcement of its

terms of use.

74 As the FAQ explains, an ISV is the shorthand used to describe a third-party

software vendor who (a) does not have a direct agreement with WhatsApp;

and/or (b) has access to unencrypted message content; and/or (c) may have

been representing itself as a reseller of the WhatsApp Business API and using

WhatsApp trademarks.

75 ISVs are thus entities that have accessed the WhatsApp Business API in

violation of WhatsApp’s terms of use in order to provide messaging support

services to users or end-clients. Although GovChat falls within this definition,

GovChat’s additional breaches of, and inconsistency with, WhatsApp terms and

its redistribution to government entities means that it would not qualify for the

programme.

76 The ISV programme did not change WhatsApp’s terms of use, nor did it add any

new terms that would have affected lawful users of the WhatsApp Business API.

Instead, it put in place a separate set of terms to address a serious concern that

WhatsApp had observed – entities that were not authorised BSPs themselves

were onboarding end-clients to the WhatsApp Business API (through authorised

BSPs), and managing or supporting their messaging, in violation of WhatsApp’s

terms.

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77 The terms of the ISV programme reflect WhatsApp’s concerns that BSPs may

have permitted these intermediaries to obtain access to unencrypted messages

intended for the user or end-client. As the FAQ explains:82

“What are the upcoming changes, and why is WhatsApp making these

changes?

We have determined that some BSPs have granted access to WhatsApp

Business Services (including messages) to third-party businesses who are not

end business customers (these entities will be referred to as ‘ISVs.’) This is a

violation of our Business Terms of Service.

...

“We are making this change to require our BSPs to be transparent about their

practices of onboarding ISVs and to ensure that the activities of BSPs/ISVs

are in compliance with our policies.”

78 Requiring BSPs to identify the ISVs they had onboarded, and to enter into formal

contractual arrangements, enabled WhatsApp to maintain visibility into end-

client users and establish contractual privity with these previously undisclosed

ISVs in order to facilitate effective enforcement of WhatsApp’s terms of use, and

in so doing, to maintain the quality and integrity of the WhatsApp service.

79 With regard to the applicants’ complaint that WhatsApp’s enforcement is

selective and inconsistent, it is instructive to consider how the FAQ addresses

the question: “What kind of activity can a BSP continue to engage in with their

ISVs?”. Having regard to the parameters set out immediately below, it is clear

82 Replying affidavit, annexure “RA5”, p 758 (our emphasis)

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that WhatsApp does not permit any entities to engage in the type of conduct that

GovChat claims as its right in this application. Here are a few of the terms that

WhatsApp enforces against all ISVs – all terms that GovChat violates:83

79.1 “Must not resell the WhatsApp Business Solution or give any End

Clients or third parties access to the WhatsApp Business Solution other

than the End Client for whom the ISV’s services have been engaged

(i.e., ISVs cannot onboard new clients)”;

79.2 “Must not retain a third party as its service provider”;84

79.3 “Must agree to restrictions on use of any data the ISV obtains by using

the WhatsApp Business Solution (including using data to track build, or

augment profiles on individual WhatsApp users and sharing that data

with third parties)”; and

79.4 “Must not use and/or access the WhatsApp Business Solution if it is a

governmental entity or for a Client that is a governmental entity.”

80 The last-mentioned item reflects WhatsApp’s cautious approach to onboarding

government entities. Ensuring that government entities work with a BSP, instead

of an ISV, provides greater assurance that government use-cases will be

83 Replying affidavit, annexure “RA5”, p 760 (our emphasis) 84 Replying affidavit, annexure “RA5”, p 760 #LetsTalk and GovChat retain Synthesis as their service provider. See answering affidavit, para 14, p 518. This arrangement would violate the terms of the ISV programme.

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appropriately flagged and presented to the government programme team for

review, to ensure compliance with the restrictions applicable to government use.

81 Finally, it is worth noting that the ISV terms include specific prohibitions against

the sharing of client data, or any use of the data by the ISV “for its own

purposes”, as well as against disclosure of one client’s data “to any other third

parties.” These terms mirror the terms applicable to authorised BSPs.85

82 The remaining isolated examples of other users who are alleged to have

violated WhatsApp’s terms are speculative and/or irrelevant. None of these

users are engaged in the unauthorised resale of WhatsApp Business Services

to multiple government entities that they aggregate in a single WAB account

under their own name; and none of the alleged violations even come close to

the level of complete disregard that GovChat has shown for WhatsApp’s terms.

83 Finally, we note that the applicants waited until their replying affidavit to allege

that WhatsApp has enforced its terms of use selectively, despite much

information on which they now rely being included (but not expressly identified)

in their founding papers.86 As Broome J held in Poseidon Ships Agencies, “it is

essential for [an] applicant to make out a prima facie case in its founding

affidavit.” 87

85 Replying affidavit, annexure “RA5”, p 763 86 See replying affidavit, para 64, p 710 87 Poseidon Ships Agencies (Pty) Ltd v African Coaling and Exporting Co (Durban) (Pty) Ltd and Another 1980 (1) SA 313 (D) at 316A. See also, NK v KM 2019 (3) SA 571 (GJ) at para 22, in which Molahlehi J, relying on Poseidon Ships Agencies, stated that “an applicant in motion proceedings has to make out his or her case in the founding affidavit unless there are special circumstances why that has not been done”. No such special circumstances apply here.

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GovChat’s commercial access to the WhatsApp Business API via #LetsTalk

84 GovChat ultimately succeeded in securing access to the WhatsApp Business

API via #LetsTalk, its wholly-owned subsidiary. In its application to open a WAB

account through InfoBip, an authorised BSP, #LetsTalk provided the following

description of its proposed use-case:88

“Hashtag-LetsTalk will provide customers the ability to communicate with

various corporate[s] to provide feedback on services rendered as well as the

ability to provide a mechanism to collect complaints/compliments in respect of

services. The communication will be initiated by the end user (customers) and

there is no plan to initiate communications from Hashtag-LetsTalk side.”

85 Unlike the name “GovChat”, which indicates some type of relationship with the

state, “#LetsTalk” provides no such indication. Importantly, the application for a

WAB account could only have been reviewed on the basis of the information

submitted by #LetsTalk. On this basis, it was understood that the #LetsTalk

WAB Account would be used for a commercial or business use-case – as “a

customer engagement platform”.89

86 No mention was made in #LetsTalk’s application of any kind of government-

related work, or of any connection between #LetsTalk and GovChat,90 let alone

its relationship (via GovChat) to government entities. It was simply “submitted

in the ordinary course ... for a business (not as part of the Government

88 Answering affidavit, annexure “BES12”, p 592 89 Answering affidavit, paras 81 and 83, p 533 90 Answering affidavit, para 81, p 533

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programme)”.91 This meant that it was not subjected to the type of vetting that

would have been conducted had it accurately disclosed the use-case.

87 The #LetsTalk account attracted attention at the beginning of June 2020, when

WhatsApp’s Mr Gareth Bray “noted significant spikes and drops in message

volume associated with the #LetsTalk account.”92 In email correspondence with

InfoBip’s Ms Katerina Parimon, he raised a concern relating to the apparent

relationship between #LetsTalk and GovChat, based on an advertisement

promoting the service provided by the former as being performed by the latter,

which had been rejected for onboarding on a number of occasions.93

88 As mentioned above, this correspondence makes clear that WhatsApp had

been unaware of the relationship between GovChat and #LetsTalk at the time

#LetsTalk opened its WAB account. Ms Parimon’s responses are also wholly

consistent with InfoBip not having disclosed the existence of this relationship to

WhatsApp any earlier.

89 Having conducted a quick investigation, Mr Bray took the matter up with InfoBip,

which – in turn – raised some of WhatsApp’s concerns with #LetsTalk.94 Further

concerns arose when WhatsApp’s Mr Benjamin Supple had the opportunity to

review screenshots of the chatbot menu that #LetsTalk was offering at the time,

which indicated that the account was providing messaging services to

91 Answering affidavit, para 83, p 533 92 Answering affidavit, para 85, p 534 93 Answering affidavit, annexure “BES13” (email sent at 11h29 on 2 June 2020), pp 594 – 597 94 Answering affidavit, paras 87 – 90, pp 534 – 535

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government entities, and, it appeared, servicing multiple different entities by

means of a single WhatsApp account.95

90 Moreover, “[t]he chatbot menu also appeared to request sensitive health

information ... and to offer contact tracing”, a use which WhatsApp has not

permitted on the WhatsApp Business API.96 These concerns, while important,

were subordinate to the fundamental problem that GovChat had accessed the

platform under an assumed name and was redistributing WhatsApp services to

government entities, in clear violation of the terms of service.97

91 The matter remained unresolved. In an email dated 31 July 2020, InfoBip’s Mr

Dharsan Naidoo informed GovChat’s Mr Eldrid Jordaan that the #LetsTalk WAB

account would be offboarded from the WhatsApp Business API on 6 August

2020. Mr. Jordaan responded with the first of several lengthy letters, which led

to a cycle of email exchanges and meetings in which –

91.1 WhatsApp repeatedly made clear that GovChat’s business model

violates the terms of use, and that each government entity needs to

establish its own WAB account;

91.2 Mr. Jordaan would indicate a willingness to respond to these concerns;

91.3 Mr. Jordaan would request additional time; and

95 Answering affidavit, para 91, pp 535 – 536 96 Answering affidavit, paras 91 – 92, p 535 – 536 97 Answering affidavit, annexures “BES24” pp 621 – 622 and “BES29”, pp 632 – 633.

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91.4 WhatsApp would agree to postpone the termination date to allow for an

orderly transition to a compliant structure.

92 The end result of these fruitless interactions was simply to delay the termination

of #LetsTalk’s WAB account for over three months, which was evidently the very

objective of Mr Jordaan’s strategy.98

93 What is of particular importance was Mr Jordaan’s confirmation, during a video

call held on 6 October 2020, “that steps would be taken to transition the

[relevant] Government entities to their own WAB accounts.”99 Over the next four

weeks, WhatsApp formed the view “that the applicants were, notwithstanding

their commitments to the contrary, obfuscating and delaying taking any steps to

transition the WAB Accounts to the relevant Government entities.”100

94 Although this allegation of dilatory conduct is vehemently denied by the

applicants in reply,101 they nevertheless make it clear that they currently have

no intention of transitioning their government clients to their own WAB accounts,

because of their apprehension that to do so would mean that “there would be

no role left for GovChat to play.”102 It would be fanciful to suggest that Mr

Jordaan did not hold this view on 6 October 2020, just weeks before he deposed

98 Answering affidavit, paras 95 – 116, pp 537 – 542 99 Answering affidavit, para 111, p 541 100 Answering affidavit, para 113, p 542 101 Replying affidavit, paras 38 – 62, pp 696 – 708 102 Replying affidavit, para 61, p 708

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to the founding affidavit supporting this application, despite his undertakings to

the contrary on that date.

95 On 4 November 2020, WhatsApp informed Mr Jordaan that the contemplated

offboarding would take place on 16 November 2020. In a video call held on 11

November 2020, a full week later, “it was confirmed that GovChat had not yet

transitioned any of its Government clients to their own WAB Accounts.” Having

given the applicants a total of over five months to address their non-compliance,

“WhatsApp declined to afford GovChat any additional extension of time to do

so.”103 The present application was launched just two days later.

THE APPLICANTS ARE NOT ENTITLED TO INTERIM RELIEF

96 In their founding papers, the applicants claim that “Facebook’s conduct in

unilaterally terminating GovChat’s use of WhatsApp in the circumstances likely

amounts to an anti-competitive abuse of dominance, in contravention of sections

8(b), 8(c) and/or 8(d)(ii) of the Competition Act.”104 Before dealing with the

substance of these allegations, it is important to clarify that –

96.1 it was WhatsApp – and not Facebook – that took the decision to

terminate #LetsTalk’s WAB account; and

103 Answering affidavit, para 116, p 542 104 Founding affidavit, para 81, p 42

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96.2 the key relationship at issue in this application, however so defined, is

between #LetsTalk, on the one hand, and WhatsApp, on the other.

97 Central to the applicants’ claim is that the relationship between GovChat and

Facebook entitles the former to certain rights, such as access to an essential

facility. Characterising the claim as one that sees GovChat as the victim of

alleged anti-competitive practices, when the impugned conduct was directed at

#LetsTalk (with whom WhatsApp is in a contractual relationship, and to whom

WhatsApp’s terms of use apply) only makes sense if #LetsTalk is seen for what

it really is: nothing more than a front for GovChat.

98 Be that as it may, the essence of the complaint is clear: GovChat claims it should

be entitled – through its wholly-owned subsidiary #LetsTalk – to make use of the

WhatsApp Business API to service its (GovChat’s) government clients, and that

any attempt by WhatsApp and/or Facebook to stop such use constitutes anti-

competitive conduct. Importantly, GovChat’s business model is presented as a

given; no consideration is given to it conducting business in any other way.

99 As we have already explained, an applicant seeking relief in terms of section 49C

of the Act must show that the relief sought is “reasonable and just”, having regard

to the evidence relating to the alleged prohibited practice, the need to prevent

serious or irreparable damage to the applicant, and the balance of convenience.

While all three factors must be considered, interim relief is seldom granted “in

the face of unconvincing evidence of a restrictive practice.”105

105 See above fn 43

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The first factor: evidence relating to the alleged prohibited practices

100 We have already addressed the two-stage York Timbers test: a first stage, which

– in the main – considers “the facts alleged by the applicant, together with the

facts alleged by the respondent that the applicant cannot dispute”; and a second

stage, which considers whether “the facts set out by the respondent in

contradiction of the applicant’s case raise serious doubt”.106

101 We submit that the applicants fail at the very first stage. But even if this Tribunal

were to hold that they do not, the evidence on which the respondents rely makes

it plain that at every potential hurdle, be it market definition, proof of dominance,

or establishing the various elements particular to each alleged form of abuse of

dominance, there is (at the very least) serious doubt that the applicants will

succeed.

102 Given the number of hurdles that the applicants have to overcome, there can be

no doubt that the possibility of them accurately threading the needle, overcoming

each of these many hurdles in turn, is particularly slim. In such circumstances,

we submit that there will be no need for this Tribunal even to consider the other

two factors relevant to determining whether interim relief ought to be granted.

106 See above para 37

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Defining the market and establishing dominance

103 In DW Integrators, this Tribunal considered the particular challenge of identifying

the relevant market in interim relief proceedings:107

“In interim relief proceedings where, without the benefit of the Commission’s

investigation, the views of the parties are all that the Tribunal has to rely upon,

the effect of the inability of the parties to establish the relevant market is

particularly debilitating.”

104 More recently, in Africa People Mover, this Tribunal considered what is required

of an applicant in interim relief proceedings insofar as market definition and

dominance are concerned.108

“In Chitando we noted that the prohibition against the abuse of a dominant

position does not apply to all firms. A firm must be dominant in a market for a

prohibition to find application.”

“We also stated that to establish an abuse of dominance, the applicant must

first establish that each respondent is dominant. In order to do that the applicant

must identify the relevant market. Without a definition of the market there is no

way to measure a firm’s ability to lessen or prevent competition.”

“In Chitando, the applicant had not attempted to engage in a proper market

definition exercise and had not provided evidence to support his definition of

the market as the market for shipping law briefs. He could not provide details

of the size of the relevant market, what percentage of that market he considers

the respondents to have or what facts and circumstances warrant the

conclusion that the respondents enjoy market power within the defined market.”

107 Above fn 32 at para 23 108 Above fn 25 at paras 66 – 68 (footnotes omitted)

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105 In reply, the applicants allege that “[t]he respondents accept, however, that for

purposes of interim relief proceedings before the Tribunal ‘it is not necessary to

conclude on a precise market definition’.”109 The phrase is quoted out of context.

Understood properly, the quote makes it plain that this Tribunal need not decide

on any precise market definition because “even if one were to consider [the

applicants’] narrow definition ... WhatsApp would still not be dominant”.110

106 In line with this unfounded allegation, the applicants submit that – in interim relief

proceedings – they bear no onus to define the relevant market with reasonable

precision.111 Indeed, they acknowledge that they have given little attention to

defining the relevant market in any detail.112 But as Africa People Mover and

Chitando makes clear, this is incorrect; an applicant for interim relief must

“engage in a proper market definition exercise”.113

107 Thus without any proper basis, the applicants assert that the “primary relevant

market” is the “market for OTT messaging apps through smartphones in South

Africa”.114 OTT stands for Over-the-Top, and refers to a messaging app “linked

to a smartphone device and mobile number”.115 This is in contrast to text

messaging services such as SMS, which “do not rely on internet connections or

data availability and so are universally accessible to all mobile device users.”116

109 Replying affidavit, para 95, p 722 110 Answering affidavit, para 132, p 545 111 Replying affidavit, para 97, p 723 112 Founding affidavit, para 82.2, p 43 113 Chitando v Fitzgerald and Others, Chitando v Webber Wentzel and Others (016550, 016568) [2013] ZACT 93 (19 September 2013) at para 40 114 Founding affidavit, para 82.2, p 43 115 Founding affidavit, para 82.2, p 43 116 Answering affidavit, para 134, p 546

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108 The applicants provide no explanation as to why the market ought to be defined

in this manner. At the very least, it would be necessary for the applicants to show

why other technical solutions to text-based communication needs, including but

not limited to those that are smartphone-based, are not adequate substitutes for

OTT messaging. As the answering affidavit explains:117

“The applicants fail to take into account the wide array of alternative messaging

channels including SMS, MMS, web messaging, push notifications, in-app-

messaging, email, and other technical solutions, such as USSD (a technical

solution used for messaging in Sub-Saharan Africa). WhatsApp competes with

each of these different forms of messaging.”

109 This failure on the part of the applicants is inexcusable. A particular transcript on

which they rely (in reply) makes it plain that GovChat can indeed operate on a

range of other OTT and non-OTT platforms:118

“GovChat was designed and built to be available to every single South African,

no matter what type of device or how they want to communicate. That means

we are available over SMS, over USSD, over IVR, over apps and also, most

excitingly, over WhatsApp. Why we are so excited about WhatsApp as a

channel for GovChat, is because it allows us to communicate with our end-

users completely securely no matter what the message, whether it is an audio

file or a text or an image, we will encrypt every single message and those

messages cannot be intercepted by a third party.”

110 Given the applicants’ focus on the most vulnerable groups within South Africa,

including in particular those who qualify to apply for the Special COVID-19 Social

Relief of Distress Grant (“the COVID grant”), it was incumbent upon them to

117 Answering affidavit, para 131, p 545. See also, answering affidavit, para 134, p 546 118 Replying affidavit, annexure “RA1”, p 747

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perform, at the very least, an analysis of the use of smartphones by (potential)

beneficiaries, as well as smartphone use in the population as a whole. As the

economic report prepared by RBB Economics (“the RBB report”) explains:119

“The Applicants state that WhatsApp’s penetration amongst mobile phone

owners in South Africa is 58%. This means that other methods of

communication universally accessible to all mobile phone owners (e.g., SMS,

voice calls or USSD Protocol) are likely to be used by businesses and

Government agencies as a primary method of engagement with a wider set of

consumers. In this regard, the Independent Communications Authority of South

Africa has stated that ‘Traditional voice and SMS services are therefore the

main means of reaching a substantial proportion of consumers in South Africa,

and this is likely to be the case in the short to medium term.’”

111 It was also incumbent on the applicant to consider the various ways in which

eligible persons are entitled to apply for the COVID grant: by WhatsApp, using

“[t]he USSD or SMS Line”, or via email,120 and the different proportions of

applicants making use of these different technical solutions.

112 If, as GovChat claims, the market affected by WhatsApp’s impugned conduct is

the “market for government messaging services in South Africa”, then the

relevant market for purposes of determining dominance must be the market for

platforms that provide the technical means for delivering such messaging

services and engaging with end-users.

113 However, without any explanation, the applicants have ignored a range of

platforms available to all mobile phone users, including those (such as SMS) on

119 Answering affidavit, Appendix 1, section 3.1, p 666 (footnotes omitted) 120 Supplementary founding affidavit, annexure “SFA7”, p 314

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which GovChat’s government clients already rely for communicating with

members of the public. On its own, this failure casts significant doubt on the

market definition for which the applicants contend. This in itself is fatal to the

applicants’ complaint against the respondents.

114 In short, the applicants have failed to make out any case for their definition of the

“primary relevant market”. Without any evidential basis, they have simply relied

on a market which appears to have been “artificially crafted so as to portray

WhatsApp as having a position of strength”.121

115 As with their proposed market definition, the evidence put up by the applicants

in respect of WhatsApp’s alleged dominance in the market for which they

contend is also remarkably thin. The applicants allege that –

115.1 89% of all internet users in the country aged 16 to 64 “have used the

WhatsApp messaging app in the previous month”;122

115.2 “the next largest messenger app is Facebook’s own FB Messenger app

with 61% usage, and competitor messenger apps such as WeChat

having only 15% usage”;123 and

115.3 “58% of all South African mobile phone owners [are] using the app as of

February 2020.”124

121 Answering affidavit, para 131, p 545 122 Founding affidavit, para 85.2, p 45 123 Founding affidavit, para 85.2, p 45 124 Founding affidavit, para 85.3, p 45

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116 On its own, this information indicates very little of significance. Non-OTT

platforms, such as SMS and USSD, are accessible to a much larger proportion

of South Africans with mobile phones than is WhatsApp. As the RBB report

notes:125

“[T]he reported rate of Internet penetration in South Africa is 62%. Accordingly,

WhatsApp merely provides an additional option for engagement with a subset

of mobile phone owners (who are themselves a subset of all consumers or

citizens) that have the WhatsApp application on their handsets.”

117 Further, as the RBB report also explains:126

“[W]e note that user penetration as cited by the Applicants is not the equivalent

of market share, since it does not account for the existence of alternative

communication methods and the significant degree of multi-homing in South

Africa .... Indeed, the fact that one communication method has a high

penetration rate does not exclude the possibility that other communication

methods might have a similar or even the same penetration rate. Moreover,

user penetration simply provides a snapshot of historical usage and is not

indicative of market power in the context of a dynamic and rapidly evolving

sector, such as the market for consumer communication applications, that is

characterised by constant innovation and frequent market entry. ...

There are a number of other players that provide consumer communications

applications in competition with WhatsApp in South Africa and worldwide.

These competitors include integrated companies that are also active in the

provision of smartphone hardware and operating systems, such as Apple with

FaceTime and iMessage, Google with Duo and Hangouts, and Microsoft with

Skype and Microsoft Teams. Other non-integrated providers of consumer

communications applications include WeChat, LINE, SnapChat, Telegram,

125 Answering affidavit, Appendix 1, section 3.1, p 666 (footnote omitted) 126 Answering affidavit, Appendix 1, section 3.2, p 667

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Hike, Zoom, Viber Signal and Houseparty. In these market conditions, any

market position amongst consumer communication applications, regardless of

the size of its network, is unlikely to be incontestable, and WhatsApp

continuously faces the threats of innovation and expansion by existing and new

players.”

118 Regarding the applicants’ allegations that there are significant market barriers to

entry and expansion for WhatsApp’s competitors, and high switching costs for

customers, the RBB report observes that such allegations are contradicted by

the available evidence:127

“The time and cost of launching and operating a new mobile consumer

communications application is relatively low, with the main cost being server

capacity which increases with scale. The relatively low barriers to entry and

expansion that are applicable to consumer communication applications were

acknowledged by the European Commission. This is also demonstrated by the

numerous examples of successful entry of competing consumer

communication applications such as WeChat, SnapChat, Telegram, Zoom,

Microsoft Teams and, most recently, Signal.

In relation to consumer switching costs, the available evidence indicates that

the market for consumer communication applications in South Africa features

a significant degree of ‘multi-homing’ with an average Internet user in South

Africa having 8.2 social media accounts and several consumer communication

applications having a relatively high reported incidence of usage. Furthermore,

consumers do not face significant costs in switching between different

consumer communication applications, as many consumer communication

applications are offered for free, are easily downloadable and can coexist on

the same device.”

127 Answering affidavit, Appendix 1, section 3.2, pp 667 – 668 (footnote omitted)

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119 On the issue of alleged dominance, the RBB report concludes that “there is no

robust evidence that WhatsApp has a dominant position under any plausible

definition of the relevant market in this case.”128

120 For all the above reasons, the applicants have failed to explain properly the basis

upon which they have determined the market definition on which they rely, and

have not provided the requisite evidence to establish that WhatsApp is dominant

in that particular market, or indeed any other market. On this basis alone, we

submit that all of the applicants’ complaints under section 8 of the Act are

unsubstantiated and fall to be dismissed.

The section 8(1)(b) claim

121 Even if WhatsApp were to be regarded as a dominant firm, the applicants’

complaint under section 8(1)(b) is misconceived on a number of grounds.

122 Section 8(1)(b) states that a dominant firm is prohibited from “refus[ing] to give a

competitor access to an essential facility when it is economically feasible to do

so”.

123 Section 1 of the Act defines an “essential facility” as “an infrastructure or resource

that cannot reasonably be duplicated, and without access to which competitors

cannot reasonably provide goods or services to their customers”.

128 Answering affidavit, Appendix 1, section 3.2, p 668

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124 In Glaxo Wellcome (Pty) Ltd v National Association of Pharmaceutical

Wholesalers, the CAC set out the five requirements to be met for a successful

complaint under section 8(1)(b):129

124.1 the dominant firm involved must refuse to give the complainant access

to an infrastructure or resource;

124.2 the complainant and the dominant firm must be competitors;

124.3 the infrastructure or resource concerned must not reasonably be capable

of being duplicated;

124.4 the complainant must not be able reasonably to provide goods or

services to its customers without access to the infrastructure or resource;

and

124.5 it must be economically feasible for the dominant firm to provide its

competitors with access to the infrastructure or resource.

125 WhatsApp has not refused to give #LetsTalk (and therefore GovChat) access to

the WhatsApp Business API. Instead, what has been refused by WhatsApp is to

allow #LetsTalk to remain on the platform whilst violating the terms of use of the

API, an action which is wholly consistent with the grant to #LetsTalk of “a limited,

129 Glaxo Wellcome (Pty) Ltd and Others v National Association of Pharmaceutical Wholesalers and Others 15/CAC/Feb02 at para 57

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revocable, non-exclusive, non-sublicensable, and non-transferable licence” to

use the platform subject to compliance with WhatsApp’s terms of use.130

126 The barrier to GovChat making effective use of the platform is, therefore, its

unreasonable demand to continue providing services to its government clients in

terms of a seemingly inflexible business model that is at odds with the platform’s

terms of use. GovChat is thus the architect of its own misfortune.

127 Relying on Magill TV Guide,131 the European Court of Justice (“ECJ”) – in Oscar

Bronner v Mediaprint – made clear that three criteria must be fulfilled to meet the

threshold of having refused access to an essential facility:132

127.1 First, the refusal must be likely to eliminate “all competition” on the

downstream market on the part of the person requesting access to the

facility at issue;

127.2 Second, that refusal must be incapable of being objectively justified; and

127.3 Third, the facility must be “indispensable to carrying on that person’s

business, inasmuch as there is no actual or potential substitute in

existence”.

130 Answering affidavit, para 51, p 526 131 P RTE & ITP v Commission & Magill TV Guide Joined Cases C-241/91 P & C-242/91, [1995] 1995 ECR I-743 132 Oscar Bronner GmbH & Co. KG v Mediaprint Zeitungs- und Zeitschriftenverlag GmbH & Co. KG [1994] Case C-7/97 ECR 1998 I-07791 at para 41

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128 Even if WhatsApp had refused access to the WhatsApp Business API, any such

refusal would have come nowhere near to meeting these thresholds, as (a) it

would not have removed GovChat’s ability to continue to compete on the market;

(b) it is objectively justified, given that the WhatsApp terms of use in question are

designed to protect both WhatsApp and its users;133 and (c) there are a number

of actual or potential substitutes for WhatsApp upon which GovChat could rely.

129 Insofar as the allegation of being a competitor is concerned – the second

requirement under section 8(1)(b) – the applicants allege that the relevant

competitor of Facebook and/or WhatsApp is GovChat.134 This alleged

competition is said to take two forms:135

129.1 competition for GovChat’s customers; and

129.2 potential competition, at some unknown point in the future, in providing

revenue-generating services that neither GovChat nor WhatsApp are

currently providing in South Africa.

130 The first form of alleged competition is based on WhatsApp’s requirement that

government entities, like all other users of the WhatsApp Business API, open

WAB accounts in their own names. In this regard, Mr Jordaan alleges that

133 In this regard, under the US law on refusals to deal by monopolists, upon which the essential facilit