Legal & Risk: What Businesses Need to Watch

Legal & Risk: What Businesses Need to Watch

2026-06-01

This week’s news highlights two critical legal and compliance challenges for South African and international businesses: the tension between digital privacy and child protection measures, and the regulatory risks of expanding manufacturing under localisation policies. These issues, often overlooked in strategic planning, could expose organisations to liability and operational disruptions.

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1. Child Protection vs. Privacy: The Hidden Cost of Social Media Age Bans (South Africa)

As detailed by TechCentral in “The hidden cost of social media age bans is everyone’s privacy”, South Africa’s push for stricter age verification on platforms like X, Facebook, and YouTube could lead to invasive data practices. Under POPIA Act 4 of 2013, businesses must ensure data processing is limited to specified purposes and minimised in scope. However, rigorous age enforcement—such as requiring biometric verification—could exceed the scope of legitimate purpose (e.g., preventing child exposure to harm) and violate Section 15(1) of POPIA, which mandates that data collection be proportionate.

Compliance Action:

• Review age-verification policies to ensure alignment with POPIA’s principles of purpose limitation and data minimisation.
• Avoid collecting unnecessary biometric or personal data beyond what is strictly required for age checks.

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2. Localisation and Labour Compliance: Risks in Manufacturing Expansion (South Africa)

The Moneyweb article “Localisation lifeline: Can manufacturing rescue SA’s jobs crisis?” underscores the potential for legal exposure in expanding manufacturing operations. Businesses prioritising local job creation under South Africa’s localisation policies must comply with Labour Relations Act 66 of 1995 (LRA), which governs employment conditions, health and safety, and minimum wage requirements. Non-compliance with LRA or the Companies Act 71 of 2008 (e.g., failure to register operations with the Companies and Intellectual Property Commission) could lead to fines or operational halts.

Compliance Action:

• Conduct audits of local operations to ensure adherence to LRA’s provisions on working conditions and equality.
• Verify that new manufacturing entities comply with the Companies Act, including proper registration and disclosure requirements.

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3. Anti-Competition Risks in Cross-Border Partnerships

The Moneyweb piece on the Vodacom-MTN supplier Optasia raises questions about anti-competitive practices in supply chain agreements. While the story is centred on investment opportunities, businesses entering partnerships with dominant operators must ensure agreements do not violate South African Competition Act 89 of 1998. For example, exclusive supplier contracts could be deemed anti-competitive if they restrict market access for smaller providers.

Compliance Action:

• Scrutinise partnership agreements for clauses that might constitute anti-competitive behaviour under the Competition Act.
• Engage legal counsel to review terms for compliance with South Africa’s competition laws.

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