The trial in a federal court in northern Virginia follows a separate case where a judge last month found Google’s search business to be an illegal monopoly.

This new battle, also brought by the US Department of Justice, focuses on ad technology – the complex system determining which online ads people see and their cost.

The US government specifically alleges that Google controls the market for publishing banner ads on websites, including those of many creators and news providers.

“Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the complaint states.

Government lawyers will claim Google has used its financial power to acquire potential rivals and corner the ad tech market, leaving advertisers and publishers with no choice but to use its technology.

They seek to have Google divest parts of its ad tech business.

‘Lifeblood’ to information

Google dismisses the allegations as “fundamentally misguided” and says they violate “principles of antitrust law that help drive economic growth and innovation.”

“The case is also wrong on the facts, which Google looks forward to demonstrating,” the company said in a court filing.

The company argues that the case is based on an outdated version of the internet, ignoring ads placed in search results, apps, and social media platforms.

Evelyn Mitchell-Wolf, Senior Analyst at Emarketer, said that while the market in question is small compared to the entire advertising ecosystem, it’s “the lifeblood to a lot of important information sources for the public.”

“I’m not sure that I have a lot of sympathy…for the argument that publishers” should be satisfied with fewer options to do business, she added.

The trial is expected to last at least six weeks and call on dozens of witnesses, with Judge Leonie Brinkema presiding.

Her decision on whether Google has broken antitrust law will come months after the trial. If found at fault, a separate trial would decide how Google should comply with the judge’s conclusion.

Analysts at Wedbush Securities said that the economic impact of the trial will be limited for Google no matter the outcome.

The business that the government is asking Google to sell accounted for less than 1 percent of operating income this year, they estimated.

Similar investigations into Google’s dominance of the ad tech business are ongoing in the European Union and Britain.

Meanwhile, the earlier search case has entered the remedy phase, with the US government expected to propose an overhaul of Google’s search engine business in the coming weeks.

arp/md

© Agence France-Presse

Nedlac was established in 1995, shortly after the end of apartheid, as a platform for dialogue between the government, business, labour and community organisations. 

By providing a structured environment for these stakeholders to collaborate, Nedlac has played a role in shaping South Africa’s post-apartheid economic and social landscape.

But said Cas Coovadia, the chief executive of Business Unity South Africa, “more work needs to be done to consider whether Nedlac is fit for purpose in the current environment and for the challenges that lie ahead”.

In 2021 the Nedlac executive council established a governance task team to review the council’s founding documents, including the Nedlac Act and the Nedlac constitution. 

“We believe this should have been done earlier — to look at Nedlac’s progress, relevance and positioning. We believe it’s critical,” Coovadia said. 

Some of the work done by the council has included the consideration of legislation such as the Companies Bill (2019), the Competition Amendment Bill (2008 and 2018) and the National Health Insurance Bill (2019).

Nedlac has also brought parties together such as the Electricity Summit, which led to a Nedlac Accord (2008); the development of the Framework for South Africa’s Response to the International Crisis (2009); the Social Compact to support Eskom (2020); and the Covid-19 Nedlac Rapid Response Task Team (2020 – 2022).

Coovadia said in the past 30 years the world and the issues that governments have to  contend with have changed and Nedlac must evolve accordingly.

“The current economic trajectory, which will gain momentum every year, is that of an economy that is characterised by artificial intelligence, digitalisation, hybrid ways of working and diverse ways of work. These are critical changes and Nedlac needs to review how it will remain relevant and what it needs to do,” he said. 

Raymond Parsons, an economist at the North-West University Business School and a former convenor of Nedlac, concurred, saying there was a huge challenge ahead for Nedlac to reform.  

“We’ve heard that there are plans to restructure, adjust the operation of Nedlac. It’s quite clear that given the challenges we have identified, Nedlac has to be fit for purpose in the next few years. The ingredients that are part of that, making Nedlac fit for purpose, would be firstly to be proactive and to be relevant,” Parsons said

But labour federation Cosatu’s parliamentary coordinator Matthew Parks disagreed with the notion that Nedlac is losing its relevance. 

“Nedlac is more relevant than ever before. It is still workable to address issues of today. We would be far worse off if we didn’t have it, it’s helped to address many issues,” he said on the sidelines of Friday’s summit.

“Government on its own doesn’t have all the ideas or the capacity, business doesn’t have the political muscle and labour doesn’t really have money but we can help bring on board workers. There are always issues but there’s progress.”

In a presentation to the standing committee on public accounts (Scopa) on Wednesday, the Auditor General of South Africa noted that the utility’s net cash inflows for the year from operating activities was R14 billion, compared with R22 billion in the 2023 financial year. 

“This can be improved if an improvement in the operations takes place,” the auditor general commented.

But as matters stand, Transnet is falling well below its target of shifting 200 million to 220 million tonnes of freight a year, at which point — it is estimated — it will begin to make a meaningful contribution to the economy. Its current target is 170 million tonnes a year.

In the past financial year, volumes increased 1.5% to 151 million tonnes, compared with the previous year, and revenue was up 12%, according to results released on Tuesday.

The company posted a loss of R7.3 billion for the financial year, worse than the loss of R5.7 billion for 2023.

But the auditor general’s office told Scopa this improvement in volume was more likely the result of fortuitous factors beyond the company’s control, rather than an early indication that a recovery plan still in its infancy was working. It was only implemented in the last quarter of the year.

“The one percent increase in the volumes noted above was mainly due to the fact that in the prior year, the flood damages negatively affected operations, whereas the event did not occur in the current year, therefore, the impact of the turnaround strategy cannot be ascertained at this point.”

The auditor general noted that the company’s debt of R137 billion imposes interest repayments of R14 billion a year, which leaves it with limited funds to tackle a growing infrastructure maintenance backlog.

“This impacts on Transnet’s ability to fulfil its mandate and poses a risk on going concern.”

The shortage of operating cash has forced the company to refinance loan and bond maturities. But the auditor general warned that borrowing more money and restructuring existing debt could not resolve the utility’s funding problems, saying only greater operational efficiency could.

“This funding model is unsustainable, particularly if there is no immediate and significant

improvement in operational performance to enable Transnet to generate sufficient internal cash flows to service its debt without resorting to further borrowing,” the auditor general warned.

“This is a cause for concern because if the guarantee facility is exhausted and Transnet is unable to secure funding for refinancing, it might default on its debt repayments. Such a default could have severe consequences.”

Transnet, one of the state-owned entities bled dry by years of state capture compounded by theft and vandalism of infrastructure, last week signed a R5 billion loan with the New Development Bank, the multilateral development bank established by the Brics nations, to support the modernisation of the freight logistics sector.

But the auditor general cautioned that Transnet’s liabilities exceeded its assets by R61 billion, which suggests that it may not be able to pay its short-term debts as they become due and payable.

The picture was complicated further by the fact that the logistics group failed to meet loan covenants on cash interest in the past financial year. It subsequently obtained waivers from lenders but should it fail to meet the conditions of these waivers, faced an increased risk of a cross default if lenders called on their debt.

Lenders may also simply become wary of granting the company further reprieves or impose firmer conditions, the auditor-general cautioned.

“Furthermore, the lenders have been providing the waivers for an extended period of time and there is an increased risk that they will call on their debt or impose stricter conditions should the current position not improve.”

The company is due to hold discussions with Standard Bank, the China Development Bank and Deutsche Bank, among others, on revising loan conditions.

Onerous loan obligations limited spending on infrastructure maintenance, which came to just under R3.5 billion in 2024.

The auditor general noted that this made for a maintenance backlog of R6.05 billion compared to the planned required maintenance of R10.5 billion and “a cumulative backlog maintenance of R26.5 billion” that arose as a result of funding constraints, as well as theft and vandalism.

Transnet’s management has communicated that it has put in place plans to address this backlog from 2030.

The auditor general called on the management team to improve planning and make sure better feasibility  studies are performed given that the company lost R165 million in the last three financial years as a result of projects being scrapped.

“There is inefficient use of economic resources as the entity did not derive any value from the costs incurred. There is a need for management to enhance their planning and  feasibility studies to ensure economic use of resources for achievement of mandate.”

Finally, the auditor general found that the internal financial control environment at Transnet had not improved in recent years because management had failed to prevent or detect material misstatements in the material submitted. 

Adverse audit findings were recurring, which showed that management’s audit action plan was not working. 

“There is reliance on the audit process to produce credible financial statements and this is not sustainable,” the auditor general concluded.

According to Statistics South Africa, GDP expanded by 0.4% in the period under review after failing to grow in the first three months of the year, a period that was still marked by power outages. Stats SA revised the first quarter number up slightly, having earlier reported a 0.1% contraction. 

There was no load-shedding in the second quarter, which helped the electricity, gas and water supply industry. The sector increased by 3.1%, driven by higher electricity generation and water distribution, according to Stats SA. 

The country has had 161 straight days without power cuts and only 83 days of load-shedding this year, according to The Outlier. 

“If we ignore the topsy-turvy economic environment caused by the pandemic in 2020, the 3.1% growth rate represents the sharpest increase since the third quarter of 2008 [also 3.1%],” Stats SA said in a statement. 

Seven out of 10 industries contributed to the positive second quarter data, including finance, real estate and business services, manufacturing, trade, accommodation and catering, as well as construction.

The 0.4% expansion matched Standard Bank’s forecast for the second quarter and was also supported by some improvements in the logistics sector, particularly in the railway and port operations, head of South Africa macroeconomic research Elna Moolman said in a note.

“Most sectors expanded so this was a broad-based expansion,” she said, noting that towards the end of the quarter there were key political developments with the formation of a government of national unity (GNU) after 29 May general elections and the appointment of the new cabinet. 

“Since then the economic prospects have generally improved,” Moolman added.

Ahead of Tuesday’s GDP data release, economists at Nedbank predicted that the worst of the economic downturn was over, and also correctly forecast 0.4% growth for the second quarter.

“We expect the economy to fare better in the second half of the year,” the bank said, adding that resolving the country’s energy and logistical constraints remained the key to unlocking faster growth over the medium to longer term. 

“While the GNU has ushered in renewed optimism, this needs to translate into accelerated structural reforms to enhance the international competitiveness of industry, thereby enabling the economy to grow faster and create more jobs without hitting supply bottlenecks, driving up costs and stoking inflation,” Nedbank said.

Given that we are at the tail end of the season and will soon start planting for the 2024-25 production season in October, there typically are minimal adjustments on the figures at this stage. But this has not been a typical season. 

We struggled with a mid-summer drought in February and March, undermining crop yield potential in various regions. We have seen downward adjustments in the production estimates late in the season, which is not a typical practice in normal seasons. 

Thus, there is always a risk of potential downward revision of the production figures as more data about the actual harvest delivered to silos becomes available. 

On 28 August, South Africa’s Crop Estimates Committee lowered the 2023-24 maize production estimate by 2% from July to 13.06 million tonnes. This current harvest is 21% down from the 2022-23 season.

This sharp decline in harvest prospects signifies the harsh effect of the mid-summer drought. Of the current estimate, white maize is about 6.19 million tonnes (down 3% month-on-month), with yellow maize at 6.87 million tonnes (down 2% month-on-month). 

This expected harvest will meet South Africa’s annual maize consumption of roughly 12 million tonnes, leaving the country with a sizable volume for export markets.

Data from the South African Grains and Oilseed Supply and Demand Estimates Committee suggests that exports could reach 1.85 million tonnes in the 2024-25 marketing year (this corresponds with the 2023-24 production season). This may sound significant following a difficult season with a somewhat poor harvest, but there is a boost in supplies from the carryover stocks from the previous season. 

In this export forecast, about 1.2 million tonnes will likely be white maize, with 650,000 tonnes could be yellow maize. Still, the estimated exports of 1.85 million tonnes are down notably from 3.40 million tonnes in the previous 2023-24 marketing year (this corresponds with the last 2022-23 production season).

These exports will primarily be for the Southern Africa region. In fact, between May and mid-August 2024, South Africa had already exported 655,000 tonnes out of the expected 1.85 million tonnes. The principal beneficiary is Zimbabwe and a range of neighbouring African countries.

Also worth noting is that while South Africa will probably remain the net exporter of maize in the 2024-25 marketing year (which corresponds with the 2023-24 production season), the coastal regions will import small volumes of yellow maize for animal feed because of price advantage. We have recently seen the imports of yellow maize from Argentina through Cape Town. 

South Africa’s 2024-25 maize imports currently stand at 134,000 tonnes. The imports for the year (2024-25 marketing year) could rise to 350,000 tonnes. Brazil is another potential supplier of yellow maize to South Africa. Notably, after accounting for these potential imports, South Africa will remain a net maize exporter. 

In essence, we are at the tail end of a challenging 2023-24 season. The export forecasts may seem reasonably optimistic, given the current unknown risks. The best approach would be to view the data as tentative until there is a sense of comfort about the actual size of the domestic supplies. 

That said, we could gain comfort because there are solid supplies for the domestic consumer. The pressure and difficulties remain the regional demand, particularly for white maize. Thus, we continue to see upside risks to white maize prices. 

But these figures are still tentative. There may still be adjustments in the coming months, particularly on white maize export forecasts. We are in a tricky season with a lot of unknowns.

Wandile Sihlobo is the chief economist at the Agricultural Business Chamber of SA and a senior fellow in Stellenbosch University’s department of agricultural economics. His latest book is A Country of Two Agricultures.

The report projects that the sector could contribute as much as R91.4 billion to the economy by 2035 and has increased its share to 1.38% from 0.02% in 2022. This growth includes a cumulative tax contribution of R10.7 billion.

It could create over 341 000 and 157 000 full-time equivalent jobs, based on monthly earnings of R12 000 and R26 000, respectively.

The growth of digital platforms in South Africa enables inclusive participation in the economy, Naspers South Africa chief executive Phuthi Mahanyele-Dabengwa said. 

“These platforms effectively lower traditional market barriers, enabling diverse and previously marginalised groups to participate meaningfully in the economy,” she said.

The report, published in partnership with the Mapungubwe Institute for Strategic Reflection, notes that constraints relating to infrastructure, accessibility, costs and redundant regulations are hindering South Africa’s drive towards digital transformation. 

“Reliable electricity, IT infrastructure, data centres, logistics networks (including roads, transport and mapping) and access to affordable bandwidth are all essential for powering devices, processing data and payments and ensuring efficient supply chains and last-mile delivery,” it said.

“Incumbents and startup platforms alike are increasingly realising that they cannot take advantage of platform opportunities because of their inadequate digital tools, skills and security issues.”

According to the report, the average cost of 1GB of mobile data in South Africa is around R33, making it more expensive than other African countries such as Nigeria, Namibia and Kenya. 

South Africa has a “stable macro-environment characterised by a relatively low inflation rate and steady currency and interest rates”, which set it apart from other African nations, making it an attractive investment market but weak economic growth and high unemployment are setbacks. 

“A protracted low-growth environment and a small population limit the scalability of local platforms. Broad reform efforts aimed at growing the economy and increasing household incomes will improve the fortunes of digital platforms,” the report says.

The digital economy is projected to contribute 5.2% and 7.8% to GDP in Africa and South Africa, respectively, by 2025, with potential growth to 8.2% and 13% by 2050.

“Platforms in innovation (like software and app stores), classifieds (such as AutoTrader), and accommodation (for example, Trivago) are seeing broad adoption,” the report says.

The e-commerce market, which includes platforms such as Takealot.com and Checkers Sixty60, is valued at between $5 billion and $6 billion, representing 6.3% of total retail value, and boasts between 11 million and 18 million users. 

Fintech companies such as Yoco are also growing rapidly. According to the report, revenue in this market is projected to reach $434 million in 2024, driven by developments in digital payments, digital assets and neo-banking, a form of online banking. The portfolio of assets in fintech is valued at $7.5 billion and slated to have significant impact and potential for future growth.

E-hailing services like Uber, and food delivery platforms such as Mr. D, are expanding fast but are approaching critical scales. 

According to the report, the ride-hailing sector, valued at $350 million, is set to expand at an annual rate of 2.9%, reflecting increasing demand for convenient transport solutions.

Digital platforms are increasing competition by allowing price comparisons and have a social impact in areas like agro, health and educational technology, although these sectors are still emerging.

But South Africa also needs to consider new challenges. 

“Key concerns include the potential impact on job security and losses, limited market competition for both consumers and businesses, and issues surrounding privacy and access to services,” the report says.

This is according to the new Catalytic Strategy gender pay gap report which highlights disparities at work and significant gaps in the labour legislative framework on pay equity. The study was compiled by human resources development, data and analytics firm 21st Century.

According to the report released on Wednesday, 40% of households in South Africa are led by women with financial responsibility for their families. But while women take on more responsibility, including for extended-family relatives, only 14% of women fall into the category of “top earners”.

Female representation within the private sector remains the lowest, with women constituting only 25.3% of top management positions, compared with 36.9% in the public sector, the report said. They make up less than 3% of the heads of firms listed on the JSE.

Women accounted for 43.4% of total employment in the second quarter of 2021, while the labour force participation rate for women stood at 54.3%, compared with 64.9 % for men.

The report is a “fresh and timely analysis” of the history and extent of the gender pay gap in the labour system and the factors that enable its “insidious perpetuation”, former Commission for Gender Equality senior commissioner and lecturer in the law faculty at the University of Kwazulu-Natal Janine Hicks said at its launch.

“The value of this study lies in its unique review of how the gender pay gap manifests itself in South Africa’s dual economy, not only in the formal sector but equally in the informal sector, and not only in the public realm of the workplace but equally in the private realm of the household, where the non-recognition of the economic value and contribution of women’s unpaid labour persists,” she said.

The report flags a “critical need” for legislation to standardise the measurement and reporting of the gender pay gap across all sectors. 

A notable gap also exists in the recognition and quantification of unpaid work, which contributes significantly to the national GDP but needs to be accounted for in economic policies.

The study also highlighted a need for cohesion among existing policies which are implemented inconsistently. Legislation, including the Employment Equity Act and the Promotion of Equality and Prevention of Unfair Discrimination Act, has failed to adequately address the complex nature of gender-based disparities, the research found. 

Hicks said there was an opportunity to test the law in court as under the Employment Equity Act, the gender wage gap has been identified as an unfair labour practice. 

“To pay women less for doing substantively the same as their male counterparts is an unfair labour practice. We should see companies being taken to the labour court. We have legislation. We keep seeing these findings year after year, indicating that this gap persists,” she said.

According to the World Economic Forum’s Global Gender Gap Report 2024, the world has closed 68.5% of the gender gap. However, at the current pace, it will take another 134 years — equivalent to five generations — to achieve full gender parity.

“What they noted in this report is that we are, in fact, five generations behind our [sustainable development goals] targets for 2035. We can’t wait five generations for things to continue and evolve the way they are evolving. 

“I don’t believe we should sit back and say that slowly, as women become more empowered and step into the workplace, women will gradually percolate up,” Hicks said.

“I believe we’ve got to take this by the horns. I’m a firm believer in the power of the transformative nature of our Constitution. We have specific provisions within our Constitution, in our equality clause, that permits legislative and other measures to advance persons, or categories of persons, disadvantaged by unfair discrimination.”

In addition, the informal sector, where many women are employed in precarious and low-paying jobs without legal protection, remained largely unaddressed in existing policies. 

By bridging these gaps, substantial strides could be made towards achieving gender equality, Catalytic Strategy chairperson Faith Khanyile said, adding: “Our collective goal is to eradicate the fragmentation that plagues current gender policies.”

International Women’s Forum South Africa president Irene Charnley said “systemic and unconscious bias” must be confronted to create a culture of women empowerment and ensure access to jobs and benefits are equally available to them.

The group is taking back 10 000 square metres from Pick n Pay during the 2024-25 financial year and will re-let it at better monthly rentals, said Nashil Chotoki,  Redefine Properties’ national asset manager for retail.

He was speaking at a capital markets event on Tuesday to explain the company’s strategy, sustainability, operations and financials to investors and stakeholders.

Redefine currently leases 73 116 square metres to Pick n Pay. 

“The driving factor in us taking back the space is the retail opportunity that lies within that space and we want to improve rental and trading densities on that space,” Chotoki said. 

Trading density is turnover generated over space leased. 

The 10 000 square metres Redefine is taking back from Pick n Pay is equivalent to one grocery store, leaving about six stores with the group. 

“Part of the agreement with Pick n Pay is that in the remaining stores, they need to upgrade those stores so that the offering now becomes competitive,” Chotoki said. 

Pick n Pay has faced difficulties recently. Its former chief executive, Pieter Boone, was asked to step down last year because the company was underperforming. And its founding Ackerman family earlier this year announced that it will forgo its majority shareholding in the grocery retailer.

“It’s no secret that Pick n Pay does underperform compared to the likes of Checkers,” Chotoki said. 

On Tuesday, Pick n Pay warned shareholders to expect a loss of more than 20% in its half-year to 25 August results which are to be published on 21 October. The group said its sales lagged as a result of the closure of 16 supermarkets during the period. 

“There is no purpose in living in the rear-view mirror. We must only look backwards to understand what went wrong and to make sure that we don’t repeat the mistakes of the past,” chairperson Gareth Ackerman said in a statement. 

“We all take accountability for the position we find ourselves in — one which developed over many years — and we all take accountability for the action required to rebuild and restore Pick n Pay.”

Redefine said it will also take back space from Ster-Kinekor because the cinema operator has been struggling. 

“In Ster-Kinekor we currently have six cinemas and those will be reduced to two. The space represents a specific opportunity for us to further increase our rent lending functions,” Chotoki said. 

Redefine said by doing this, income risk would be mitigated through re-letting. 

Ster-Kinekor announced in April the retrenchment of 236 workers. 

This was just over a year after it exited its business rescue process and narrowly escaped liquidation, resulting in 800 jobs being saved.

“The repurposing of the cinema space will be done in phases and so there will be an impact on vacancy during that process. The important part for us is that given the low rental base that Ster-Kinekor was on, if we re-let the space we can properly utilise it, which is where the opportunity lies for us,” Chotoki said.

“We still want to incorporate the entertainment aspect to our shopping centres and I think there’s great opportunities to traditionally repurpose the space for that purpose.”