South Africa Investigates Google, X, Meta, Fines Google R500m for Imbalance Advertising Revenue
An illuminated Google logo is seen inside an office building in Zurich, Switzerland December 5, 2018. Picture taken with a fisheye lens. REUTERS/Arnd Wiegmann
Emma Okonji with Agency Report
South Africa’s Competition Commission is currently investigating Google, X and Meta platforms and has fined Google between R300 million to R500 million a year ‘provisional remedy’ for five years, to compensate local news media, including online, television and radio, for the imbalance in competition and digital advertising revenue.
This is one of the main findings in the commission’s much-anticipated provisional report stemming from its 16-month media and digital platforms market inquiry.
As the commission continues to investigate other platforms, it has warned that if the companies targeted in its findings don’t cooperate on the proposed remedies, it may seek a 5-10 per cent levy on the tech giants to compensate the local media industry.
The commission said it wants Meta to stop de-prioritising news on Facebook “to restore referral traffic to the media from its peak with at least a 100 per cent increase in referral traffic”.
Elon Musk’s X and Meta must also “cease de-prioritising news with links in the user feed”, the commission said, adding that these demands set up the commission for a big fight with the global tech giants, which have pushed back against such proposals in other jurisdictions.
It however stressed that the media should be allowed to negotiate collectively with AI companies for content deals to train AI chatbots.
On Google, the commission has recommended that the company pays up to R500-million/year to correct what it has described as 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,” the commission said in a statement.
The inquiry estimates that Google benefits from news content by R800 million to R900 million annually, while the South African media loses R300 million to R500 million.
Competition Commissioner, Doris Tshepe said the inquiry, which started in October 2023, had involved 16 months of extensive evidence gathering, public and in-camera hearings, expert report submissions, consultation with industry role players and focus group discussions.
It was initiated in terms of the Competition Act, because the commission had reason to believe 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.
“The inquiry is also unique in that the media are key agents in the fulfilment of constitutional rights to freedom of expression, and whose work promotes the fulfilment of numerous other constitutional rights. As the digital platforms do not create content themselves any undue harm to the news media would undermine the fulfilment of these constitutional rights,” Tshepe said.
Additionally, the competition regulator, which has extended its investigation to the broad technology sector, recommended in the draft report that YouTube should 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 per cent and active promotion of higher value direct sales by the media.
To address misinformation, it also recommended that the Electronic Communications and Transactions Act should be amended to introduce platform liability for harmful content and the amplification of misinformation. The commission has proposed that the social media platforms partner with and compensate the media on fact-checking.
