Google may have to compensate SA news media between R300m and R500m each year, for the next three to five years, to use their news.

The Media and Digital Platforms Market Inquiry (Inquiry) yesterday released its provisional report, presenting its provisional findings, recommendations and proposed remedial actions.

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 Inquiry was initiated in terms of section 43B(1)(a) of the Competition Act 89 of 1998 (as amended) because the Competition Commission believed that 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.

In March last year, Caxton Network News reported on the ongoing dispute between Caxton and Google, with Caxton stating that tech giants are curtailing competition in digital markets.

While freedom of the press is one of the most important freedoms to ensure constitutional democracy, the press has never been under greater threat, said Paul Jenkins, Caxton & CTP Publishers & Printers’ (Caxton) non-executive chairman, at the time.

“This is because while our right to publish may be intact, our ability to publish is being hamstrung,” he explained.

Caxton is one of numerous media organisations that made a detailed submission to the Inquiry, which is investigating the distribution of media content on South Africa’s digital platforms and advertising technology (Adtech) markets.

In April last year, Caxton Network News reported that Caxton had initiated formal legal proceedings against Google and challenged the claim by Google that it needed more time to process Caxton’s information request.

Caxton’s complaint, accompanied by its affidavit, laid bare ongoing attempts by Google to hinder the flow of information, stifling not just Caxton’s rights but potentially infringing on the broader principles of press freedom that are vital to a thriving democracy.

According to the Competition Commission, while there have been initiatives around media bargaining with digital platforms in other jurisdictions, this Inquiry has been far more inclusive by including 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.

“The news media is essential for free expression and democracy, informing citizens and holding institutions accountable. 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 while 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.

“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. While 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,” the Competition Commission said.

Against this backdrop and extensive evidence gathering, 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 Inquiry has presented the outcomes it wishes to see while giving space for platforms to see how best this can be achieved.

Some of the key provisional remedies include:

• Google to compensate the SA news media 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.

• 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 United States (in future) along with fee reductions and an end to self-referencing conduct like exclusive access to YouTube inventory and charging competitors additional fees.

“The findings and remedies are provisional and 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,” the Competition Commission said.

“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.”

The provisional findings, recommendations and proposed remedial actions are open for public comment and stakeholder consultation before the final report is released.

Stakeholders and the public have six weeks to submit their responses, with a deadline of April 7, to the Inquiry. All submissions must be emailed to mdpmi@compcom.co.za and should include supporting evidence where relevant.

The final report will be published later this year after all submissions have been reviewed and the Inquiry has further engagements with stakeholders.

Breaking news at your fingertips… Follow Caxton Network News on Facebook and join our WhatsApp channel.