The Competition Commission of South Africa recently released the highly anticipated provisional report of its media and digital platforms market inquiry (MDPMI), which was launched in September 2023.
The inquiry, conducted under section 43b of the Competition Act, aims to identify features in the media and digital markets that may impede or distort competition, particularly in the evolving media landscape.
The Commission’s findings have raised serious concerns regarding Google’s role in the sector. The provisional report indicates that Google has engaged in anti-competitive practices, with its search algorithm overrepresenting global news and underrepresenting local media, thereby distorting competition. As a result, the Commission is recommending that Google pay annual compensation to news media ranging from R300 million to R500 million over a period of three to five years.
James Hodge, Chairperson of the Inquiry, highlighted that the shift in how people access news—through search engines, social media, or AI chatbots—has shifted revenue away from media outlets and toward the digital platforms. This has led to financial instability for media outlets, impacting their sustainability and posing risks to democracy. The Commission believes that these short-term compensation payments from Google are necessary to support the media industry.
“This is a very dynamic sector, and our previous engagements and experience from the online intermediation inquiry is that rather focusing on outcomes allows flexibility and dynamism for the platforms to respond to changes in the market or consumer behaviour while still achieving the outcomes we want,” he said.
Key Remedies Highlighted by Hodge:
- Google must compensate South African news media with R300 million to R500 million annually for a three- to five-year period to address the imbalance in shared value and implement changes to search algorithms that sustainably increase referral traffic to local media. This includes removing search bias in favor of foreign media and YouTube, and promoting vernacular and community media.
- Meta must stop deprioritising news in its Facebook feed and restore referral traffic to media websites by at least 100%. Meta and X must cease deprioritising news posts with links in the user feed.
- YouTube must improve monetization for media and broadcasters (including the SABC) by increasing the revenue share to 70% and promoting higher-value direct sales for media outlets.
- Amendments to the Electronic Communications and Transactions Act of 2002 should introduce platform liability for harmful content and the amplification of misinformation. Social media platforms should partner with and compensate the media on fact-checking.
- Search and social media platforms must share richer anonymized user data for consumers engaging with news content to improve insights and monetization for local media.
- The media should be allowed to negotiate collectively with AI companies for content deals to train chatbots. If not, measures should prevent AI chatbots from favoring global media partners and ensure referral traffic goes to local news media.
- In Adtech, the inquiry proposes the implementation of remedies agreed upon in the EU and the US, alongside fee reductions and an end to self-preferencing practices, such as exclusive access to YouTube inventory and charging competitors additional fees.
The affected parties have until April 7 to submit evidence, and the remedies outlined in the report apply specifically to South African operations. Google, however, has disputed the findings, pointing to the 350 million rand in referral traffic value generated for publishers in 2023, and claiming it earned less than 19 million rand from news query ads.
Read more about the media and digital platforms market inquiry (MDPMI) HERE
