Inquiry's provisional remedies aim to address media challenges caused by digital era

Google should compensate the South African news media with R300m to R500m annually for a three- to five-year period for the imbalance in shared value while putting 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 provisional remedies made in the provisional report of the Competition Commission's media and digital platforms market inquiry on Monday. 

The inquiry was initiated in 2023 because the commission had reason to believe there were market features on digital platforms which distributed news media content that impeded, distorted or restricted competition. 

The commission said in South Africa, the financial challenges to commercial and community media, as well as the public broadcaster the SABC, have led to shrinking newsrooms, closed bureaus and news deserts outside the metros. 

Many news organisations have turned to non-advertising revenue (subscriptions, donations, content licensing, and events), but subscriptions are not viable for most South Africans, limiting access to news. Subscription models were not an option for the public and community media. This threatened access to news and media diversity.

While there were challenges that the media must face from the disruptive effect of digitalisation, the inquiry provisionally found that these challenges were worsened by the conduct of platforms that hindered the ability of the news media to secure and monetise digital traffic.

The inquiry said these digital platforms did not produce news themselves and could not replace journalism’s role.

It found that Google’s monopoly position and the unequal bargaining position of the media meant there had not been an equitable share of value between Google and news publishers in South Africa both historically and now.

“This inequity has materially contributed to the erosion of the media in South Africa over the past 14 years and will continue to do so unless remedied,” the inquiry said.

It found that the Google algorithm distorted competition between news media organisations insofar as it over-represented global news media in South Africa for search and top stories, underrepresented vernacular and community media, and over-represented declining share of third party referral traffic and the limited data sharing.    

The inquiry used a variety of measures to determine the additional value extracted by Google search annually from publishers, or value destroyed through conduct that promotes zero-clicks, resulting in a range of estimates from R300m-R500m for 2023. 

Apart from Google, the provisional report made provisional findings against other tech, including 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 affect competition for digital advertising and journalism in South Africa.

Other provisional remedies include that Meta 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 should cease deprioritising news posts with links in the user feed. 

Another provisional remedy was that YouTube must 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. 

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.

The commission said these provisional findings and remedies only applied to South African operations for global and domestic companies.

The commission said the findings and remedies were provisional. Further submissions, evidence and engagements with the inquiry after the release of the provisional report may result in changes to these findings, recommendations and remedies. It said the release of the provisional report is aimed at sparking debate.

“What is then required is a consultation process will follow from here where all stakeholders will then make submissions to the market inquiry who will then consider those before publishing the final report,” commissioner Doris Tshepe said at the release of the provisional report.

Stakeholders and the public have until April 7 to submit their responses to the inquiry regarding the provisional findings, proposed remedies and recommendations.

All submissions must be sent to mdpmi@compcom.co.za and should include supporting evidence where relevant.

The final report will be published later this year.

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