South Africa’s Competition Commission has recommended internet search giant Google compensates the local news media R300 million to R500 million annually for a three- to five-year period, for the imbalance in shared value.
The commission also wants Google to put in place changes to search that will sustainably create shared value with the media through increases in referral traffic.
This includes the removal of search bias in favour of foreign media and YouTube, and the promotion of vernacular and community media.
This is one of the key provisional remedies by the Competition Commission’s Media and Digital Platforms Market Inquiry provisional report that was released today.
The commission today presented its provisional findings, recommendations and proposed remedial actions from the inquiry.
This follows 16 months of extensive evidence-gathering, public and in-camera hearings, expert report submissions, consultation with industry role players, a consumer survey and focus group discussions.
The provisional findings, recommendations and proposed remedial actions are now open for public comment and stakeholder consultation before the final report is released.
The inquiry, initiated in terms of section 43B(1)(a) of the Competition Act 89 of 1998, was initiated because the Competition Commission had reason to believe there are market features on digital platforms that distribute news media content that impede, distort, or restrict competition, or undermine the purposes of the Act.
While there have been initiatives around media bargaining with digital platforms in other jurisdictions, the competition watchdog says this inquiry has been far more inclusive and ambitious by extending the terms of reference to include radio and television broadcasters, both commercial and public or community media, the impact of artificial intelligence (AI) chatbots and AI-powered search, and the adtech industry, which affects the monetisation of traffic on news websites.
“The news media is essential for free expression and democracy, informing citizens and holding institutions accountable,” says the Competition Commission.
“Globally, the media industry is undergoing rapid change due to the shift to online news consumption, challenging traditional revenue models and necessitating changes to business models. Traditional advertising revenue is rapidly declining and whilst some media have pivoted to subscriptions, replacing traditional ad revenue with digital ad revenue has been elusive.
“In South Africa, the financial challenges to commercial and community media, as well as the public broadcaster, have led to shrinking newsrooms, closed bureaus and news deserts outside the metros.”
Media diversity threat
According to the regulator, there is limited scope in SA for the majority to pay for news, and subscription models are not an option for the public and community media.
“This threatens access to news and media diversity. Whilst there are challenges that the media must face from the disruptive effect of digitalisation, the inquiry provisionally finds that these challenges are exacerbated by the conduct of platforms that hinder the ability of the news media to secure and monetise digital traffic. These digital platforms do not produce news themselves and cannot replace journalism’s role.”
Against this backdrop and extensive evidence gathering, the commission says the provisional report presents a series of provisional findings against tech giants, including Google, Meta (Facebook), Microsoft, OpenAI, X (formerly Twitter) and TikTok, along with provisional remedies across search, social media, generative AI and digital advertising to address conduct that adversely impact competition for digital advertising and journalism in South Africa.
These provisional findings and remedies only apply to South African operations for global and domestic companies.
The inquiry has considered the difficulties faced by the media bargaining solution in other markets and has sought to find alternative win-win solutions that are sustainable long-term.
In many cases, the watchdog points out that the inquiry has presented the outcomes it wishes to see, while giving space for platforms to see how best this can be achieved.
Keyremedies
• Meta to stop deprioritising news on the Facebook feed, to restore referral traffic to the media from its peak with at least a 100% increase in referral traffic. Meta and X to cease deprioritising news posts with links in the user feed.
• YouTube to improve the ability of the media and broadcasters, including the SABC, to monetise their content on its platform through increases in the revenue share to 70% and active promotion of higher value direct sales by the media.
• To address misinformation, a recommendation for the Electronic Communications and Transactions Act of 2002 to be amended to introduce platform liability for harmful content and the amplification of misinformation. The inquiry proposes that the social media platforms partner and compensate the media on fact-checking.
• Search and social media to share richer anonymised user data for consumers engaging news content on their platforms to enable improved insights and monetisation of their audiences.
• The media should be allowed to negotiate collectively with AI companies for content deals to train and ground chatbots. If not, measures should be in place to prevent AI chatbots from favouring current global media partners and to drive referral traffic to news media.
• On adtech, the inquiry proposes the domestic implementation of remedies agreed upon in the European Union and the US (in future) along with fee reductions and an end to self-preferencing conduct like exclusive access to YouTube inventory and charging competitors additional fees.
“It is important to note the findings and remedies are provisional and that further submissions, evidence and engagements with the inquiry following the release of the provisional report may result in changes to these findings, recommendations and remedies,” says the commission.
“The release of the provisional report aims to spark debate and engagement, not just from affected stakeholders but also the public given the importance of the news media for achieving the constitutional rights of citizens."
Google had not responded to ITWeb’s queries by the time of publishing.
Share