South Africa’s Competition Commission has issued groundbreaking provisional remedies against tech giant Google, holding it accountable for practices deemed anticompetitive and harmful to the nation’s local news media. The commission mandated Google to compensate local media outlets between R300 million and R500 million annually to alleviate the significant imbalance resulting from digital advertising monopolization.
The Commission's decisive report, which emerged following a thorough inquiry lasting 16 months, accuses not only Google but also other major tech entities like Meta (the parent company of Facebook), Microsoft, OpenAI, X (formerly Twitter), and TikTok of exploiting their positions to the detriment of South African journalism.
According to Competition Commissioner Doris Tshepe, the inquiry, initiated under the Competition Act, sought to determine whether certain features inherent to digital platforms impeded or distorted competition within the news media sector. She emphasized the pivotal role of independent media as agents of constitutional rights, stating, "The inquiry is also unique... to fulfil freedom of expression" among South Africans.
At the heart of the commission's findings is the assertion of Google's monopolistic grip on news content distribution. The report estimates Google benefits from South African news content, accruing between R800 million and R900 million yearly, whereas local media outlets face losses ranging from R300 million to R500 million due to unfair algorithms.
Panel member Paula Fray outlined the detrimental consequences of such dominance, noting, "The Google algorithm distorts competition... over-represents global news media... underrepresents vernacular and community media," thereby exacerbated the existing disparities faced by local publishers.
These findings resonate with the trends seen globally, where traditional media struggles to navigate the digital advertising ecosystem dominated by these tech giants. The competition watchdog reported staggering declines of about 40% of traditional advertising revenue for major print publications and up to 47% for the South African Broadcasting Corporation (SABC) since the rise of online platforms.
Fray and her colleagues pointed to the alarming trend of casualization within journalism, claiming, "Journalism numbers have halved from the peak... many community and regional papers have shut down... the rapid decline of the media has severe consequences for our democracy and the constitutional rights of citizens."
To remedy the situation, the report recommends several changes. Google must not only render financial support to local media but also undertake algorithmic modifications to eradicate existing biases favoring foreign media. Other proposed measures include improving the ability for local news organizations to monetize content accessed via Google and YouTube, enhancing revenue-sharing agreements to 70%. Meta, likewise, is urged to cease deprioritizing news posts on its social media platforms and restore traffic to media sites.
Failure to adhere to these remedies could result in South Africa imposing additional levies between 5% to 10% on digital advertising revenues from tech companies. Chief economist and deputy commissioner James Hodge mentioned, "If win-win solutions do not find traction... the only alternative is to impose... tariffs on search and social media companies."
Google, responding to the commission’s finds, indicated plans to review the report, contesting the notion it has taken disproportionate value from news publishers. A spokesperson asserted, "Our products generated... R350 million in referral traffic value for South African publishers,” countering claims of exploitation. They highlighted investments made toward supporting local media through partnerships and training.
The competition inquiry highlights the balancing act required to support sustainable journalism, asserting, "While there are challenges... these challenges are exacerbated by the conduct of platforms." It remains to be seen how both the Competition Commission's ruling and the tech giants’ responses will reshape the future of news media within South Africa's competitive digital environment. Stakeholders have until April 7 to submit evidence to the commission, with the final ruling expected later this year.