Will Google, Meta have to pay for SA media content? Or will they threaten to block local news?

The Competition Commission will scrutinise a number of issues affecting media and digital platforms in the country. Picture: Pixabay

The Competition Commission will scrutinise a number of issues affecting media and digital platforms in the country. Picture: Pixabay

Published Oct 17, 2023


The distribution of media content on South African digital platforms and the impact that big tech companies like Google and Meta have on the advertising revenues of the local media industry has officially come under the spotlight.

The Competition Commission launched the Media and Digital Platforms Market Inquiry (MDPMI) on Tuesday to scrutinise a number of issues affecting media and digital platforms in the country, including the advertising technology (Adtech) markets that link buyers and sellers of digital advertising inventory.

This inquiry comes as media platforms around the world struggle to balance the need to provide credible and well-researched news in the public interest with the hold that search engines and AI have on the distribution of this content and, thus, the resulting advertising revenue.

Over the past few years, but most especially since the Covid-pandemic, media and news distribution has increasingly moved online, with companies competing more than ever against social media and search engine exposure to get their content out to the public. Ultimately, the more eyes on the content, the more advertisers are willing to pay.

Landmark legislation passed in Australia in 2021 obligates Google and Facebook to compensate media outlets for news content on their platforms. Since these regulations were adopted, the media industry in that country is said to have thrived. Australia was the first country in the world to introduce laws forcing technology platforms to negotiate payments with the local media industry after a battle between Google and the country’s consumer regulator.

In Canada, however, similar regulations in the Online News Act, have not been well-received by Google, which has told the Canadian government it will block articles from Canada-based news outlets from appearing in search results and other products in the country. Meta has made the same threat, saying it will begin blocking Canadian news outlets from appearing on Facebook or Instagram after the bill is enacted.

Meta originally told the Australian government the same thing when it passed its legislation, but later cut a deal with the country and restored access to news. The Canadian Broadcasting Corporation, one of Canada’s largest news organisations, has encouraged Canadians to go directly to the websites they trust for their news.

In South Africa, Commissioner Doris Tshepe says the MDPMI, which will delve into various issues facing media sustainability, comes at a “critical moment” for the media industry as news consumption rapidly shifts online and traditional sources of funding to print and broadcasting advertising decline.

The MDPMI will be led by James Hodge, chief economist and acting deputy commissioner of the Commission, with Paula Fray – a veteran South African media practitioner serving as a panel member.

Fray says the rise in digital platforms presents both opportunities and challenges to the media, including a need for sustainable business models. However, these challenges are driven by technological disruptions such as artificial intelligence, social media-fuelled pressures to tell stories faster – and amid a tsunami of misinformation and disinformation – online harassment, global challenges such as the war in Ukraine, economic pressures, reduced newsroom resources post-Covid, and challenges to press freedom and freedom of information.

In addition, Hodge says media consumers are increasingly relying on video-sharing platforms, news aggregators, and social media to access news and generate revenue. Therefore, there is a need to promote diversity in news and public interest journalism.

The MDPMI follows numerous global inquiries and investigations led by competition authorities regarding the impact of digital platforms on news media publishers, particularly in terms of advertising revenue generation and the sustainability of quality news content. These investigations have highlighted the significant role played by large digital platforms, such as search engines and social media sites, in news content distribution, potentially affecting referral traffic and fair content payment.

These global investigations have also examined the Adtech markets and the potential for competition concerns arising from concentration and conflicts of interest.

“In South Africa, there is a parallel trend with a growing shift towards consuming digital news sources due to increased smartphone adoption and affordable internet access. The distribution of news content through digital platforms has become a crucial means for news media businesses to reach consumers, leading to greater reliance on these platforms over time,” the Commission states.

This shift has impacted the cost and revenue structure of South African news media businesses, with traditional classifieds and print advertising revenue decreasing while digital advertising revenue has risen. However, digital platforms and Adtech market dynamics can influence competition for these revenue streams, which is a key focus of the MDPMI.

“The inquiry will also assess how these markets affect the visibility and competitiveness of smaller news organisations, including community and African language news media, and the diversity of news available to consumers.”

The MDPMI will primarily concentrate on key digital platforms, including search engines, social media sites, video-sharing platforms, and news aggregation platforms, as well as Adtech market participants on the supply and demand sides, and ad exchanges. The inquiry will also take a forward-looking approach to assess the impact of new technologies adopted by digital platforms, such as generative AI search support like ChatGPT, on businesses in the South African news media sector.

If the inquiry finds that there are factors within South Africa’s media industry that destroy competition, Hodge says the Commission with look at remedial measures. However, it is too soon to say now whether it will go the route of charging big tech for the use of local news as different options will only be considered when the inquiry reaches the remedial stage – if, of course, remedies are required.

“We hope that, through the process of engagement, any remedial measures we may need to put in place will be acceptable to all stakeholders.”

IOL Business