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In a landmark move, the South African Competition Commission has released a provisional report that exposes how tech giants Google and Meta have systematically exploited the local media industry, particularly community print and digital news media.
MAHMOOD SANGLAY discusses the key findings and recommendations of the report.
The commission’s report details anticompetitive practices, market distortions, and the extraction of advertising revenue from local news publishers, marking a critical moment in South African media history. It also outlines remedial actions that could reshape the digital media ecosystem and revitalise independent journalism in South Africa.
Exploitation of South African media
The report highlights several ways in which Google and Meta (Facebook’s parent company) have leveraged their dominant positions to the detriment of South African media.
One way is through monopoly power and unequal bargaining. Google, with its near-monopoly in search, has not equitably shared the value derived from news content with South African publishers. This imbalance has eroded the financial stability of local media over the past fourteen years. The report estimates that Google extracted additional value ranging from R300 million to R500 million annually from publishers in 2023 alone.
In its algorithmic bias, Google’s search engine favours global news media over local, vernacular, and community media. This bias has resulted in higher impressions for foreign media, despite lower click-through rates (CTRs) compared to South African media. Similarly, Meta’s algorithms have deprioritised news content, reducing organic reach and referral traffic for local publishers.
Both Google and Meta have shared limited user data with news publishers, placing them at a competitive disadvantage in digital advertising. The platforms’ control over user data has enabled them to offer highly targeted advertising, further undermining the revenue potential of local media.
The exploitation by these tech giants has led to a decline in traditional advertising revenues, forcing local media to cut costs, reduce staff, and, in some cases, shut down operations. This has particularly affected community and vernacular media, which play a crucial role in providing news in local languages and covering regional issues.
The shift to digital consumption has devastated traditional advertising revenue streams for local and independent news outlets. The Competition Commission report confirms that Google’s search dominance has decreased referral traffic to South African news publishers, giving global media an advantage while marginalising vernacular and community media. Meta’s algorithmic changes have reduced organic reach for news content, making it harder for audiences to discover local journalism. Facebook’s deprioritisation of news links has led to a substantial drop in referral traffic to South African news websites. Social media algorithms promote sensationalist content over credible journalism, weakening public trust in professional news sources and fostering misinformation and echo chambers.
These actions have weakened the financial base of independent media, leading to shrinking newsrooms, closing bureaus, and increasing media concentration. The report warns that without intervention, the plurality of voices in South African media will be further eroded.
Holding Big Tech accountable
For the first time, the Competition Commission is recommending strong remedial actions to rebalance the digital media ecosystem. Key proposals include mandatory compensation for news publishers. Google will be required to compensate South African news media between R300m and R500m annually for the value extracted from local publishers. The public broadcaster (SABC) and community media will also be included in the compensation scheme. In addition, Google will need to reduce bias against South African media in its search rankings, stop privileging foreign media and YouTube links over local news sources, and restore fair representation of vernacular and community media. Meta will be required to stop downgrading news links and restore referral traffic for South African news publishers.
Google and Meta will need to provide South African publishers with detailed audience insights, enabling them to compete effectively in digital advertising. And if Google, Meta, and other platforms fail to comply, the Commission proposes a 5-10% digital levy on advertising revenues from search engines and social media platforms. This would fund a media industry support initiative.
If the Competition Commission’s recommendations are implemented, the South African media sector could see a significant transformation. Compensation from Big Tech could stabilise independent newsrooms, allowing smaller and community-based publishers to reinvest in journalism. Balancing search engine algorithms would give local publishers a fair shot at visibility, ensuring that diverse perspectives are represented. The restoration of referral traffic and fair representation in search results could strengthen local and indigenous language journalism. If implemented, these remedies could provide a new economic model for media sustainability, reducing reliance on external funding.
The role of the Press Council
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The report also highlights how the Press Council of South Africa stands to benefit from these proposed measures. It recommends that Google and Microsoft make annual contributions to the Press Council and the Broadcasting Complaints Commission of South Africa (BCCSA), ensuring the financial sustainability of media oversight bodies. Additionally, the Media Industry Fund, if implemented, could provide further financial support, reinforcing the Press Council’s ability to uphold journalistic standards and ethical reporting. The Commission’s push for greater accountability in digital news distribution may also expand the Council’s role in overseeing online journalism, particularly in tackling misinformation and ensuring media integrity.
The Competition Commission’s report marks a critical juncture for the South African media industry. By addressing the exploitative practices of Big Tech companies and implementing the recommended measures, there is potential to revitalise local media, enhance media diversity, and ensure the sustainability of independent journalism. The road ahead will require concerted efforts from all stakeholders, but the prospects for a more equitable and vibrant media landscape are promising.
The report marks a critical moment in South African media history. For years, tech giants have extracted immense value from news publishers without fair compensation. The Competition Commission’s intervention could set a global precedent for regulating Big Tech’s relationship with the media. However, enforcement will be the key challenge. If Google and Meta resist, as they have in other jurisdictions, South Africa’s legal and regulatory institutions will need to take firm action to ensure compliance. The success of these measures will determine whether local journalism can be revived and sustained in the digital era.
