Introduction

 These Terms of Reference (ToR) are prepared to engage an individual consultant to conduct a study on the regulation of competition in the digital markets in Africa. The goal is to guide the development of regulations on gatekeepers in accordance with Article 11 of the Protocol on Competition Policy.

 Background

 The AfCFTA Agreement came into force on May 30, 2019, with the objective of creating a unified African market for goods and services, facilitated by the movement of individuals to deepen the continent's economic integration in line with the Pan-African vision of "An Integrated, Prosperous and Peaceful Africa," as outlined in the AUC Agenda 2063. Currently, 54 out of 55 African states have signed the Agreement, with 49 ratifications.

As the largest free trade area in the world, the AfCFTA connects 1.4 billion people with a combined GDP of $3.4 trillion and has the potential to lift 30 million people out of extreme poverty. It is projected to increase Africa’s income by $450 billion by 2035, representing a gain of 7%.

During Phase II negotiations, State Parties completed the Protocol on Competition Policy, which was legally reviewed and adopted by the AU Assembly at its 36th Ordinary Session on February 18-19, 2023, in Addis Ababa, Ethiopia. Another significant Protocol addressing digital markets, the Digital Trade Protocol, was adopted by the AU Assembly in February 2024. This Protocol is essential for defining the digital environment necessary for trade within Africa and has implications for the continent's digital trade with the rest of the world. It aims to establish harmonized rules and common principles to facilitate and support digital trade across Africa, emphasizing intra-African digital trade, enhanced cooperation among State Parties, and the creation of a transparent, secure, and trusted digital trade ecosystem.

 The AfCFTA Protocol on Competition Policy establishes a vital continental framework to ensure the benefits of intra-African trade liberalization are realized and that markets, including digital markets, function efficiently. In many digital markets, there is a tendency toward dominance and concentrated market power among a few operators. This concentration is facilitated by digital business models such as vertical integration and conglomerates, as well as the limited flow of data due to restrictions imposed by digital players. Such a "winner-takes-most" scenario can stifle the development of healthy digital ecosystems, negatively impacting suppliers and consumers.

The digital market in Africa is rapidly evolving, characterized by increased participation of various stakeholders, including consumers, businesses, and government entities. This dynamic environment raises critical issues related to competition, market access, and consumer protection. Effective regulation is necessary to foster fair competition, innovation, and growth in the digital sector while addressing anti-competitive practices that may arise.

Article 11 of the Protocol on Competition Policy prohibits an undertaking or a group of undertakings or gatekeepers from abusing the relative position of economic dependence over a customer or supplier if the conduct substantially affects the functioning and structure of competition in the market. Paragraph 5 of Article 11 of the Protocol on Competition Policy mandates the development of a ministerial regulation to designate undertakings as gatekeepers based on the three criteria provided in the definition in Article 1 of the Protocol (significant impact on the market, operation of a core platform connecting business users to end users and entrenched durable position in its operations).

Under its mandate to facilitate the negotiations, the AfCFTA Secretariat is responsible for conducting analyses and providing recommendations to the bodies of the AfCFTA, which has been critical in concluding this process and the adoption of the Protocols and related annexes and regulations, as well as in ensuring that all the required processes and instruments are in place for the successful implementation of the Agreement.

Funded by the EU, Agence Française de Development (AFD), the German Ministry of Development Cooperation (BMZ), Sweden, The Netherlands, Denmark, Finland, and Ireland, the Team Europe Technical Assistance Facility to Support the African Continental Free Trade Area and Continental Economic Integration (EU-TAF), which is implemented by GIZ, Expertise France and FIAPP, is supporting these and other endeavours of the Secretariat to ensure that there is a positive traction of AfCFTA agenda.

 It is based on that background that the AfCFTA Secretariat is recruiting, through the support from Expertise France (EF) under the EU-TAF, an individual consultant to undertake a study on the digital markets landscape in Africa with the view to inform the development of the Regulation mandated by Article 11 of the AfCFTA Protocol on Competition.