South Africa takes aim at Google, Facebook, Apple and TikTok

 ·17 Oct 2023

The Competition Commission has officially launched its Media and Digital Platforms Market Inquiry (MDPMI), which will scrutinise the distribution of media content on digital platforms in South Africa.

The commission laid out the terms of reference for the inquiry in September, with the investigations launching from Tuesday, 17 October.

The inquiry stems from concerns that there may exist market features in digital platforms that distribute news media content, and associated markets, that might restrict, distort, or impede competition, with potential adverse effects on South Africa’s news media sector, the commission said.

Specifically, the commission intends to sniff out imbalances between digital platforms like Google, Facebook, TikTok, YouTube and others and news media. It is also roping in newer technologies like ChatGPT and other language models that draw from this content.

The terms of reference address:

  • Digital platforms have grown significantly over the years, and the transition to digital news has seen advertising revenues in the media space decline significantly.
  • Media organisations face prohibitively high costs to compete in the digital space and now compete with digital platforms while also being heavily dependent on them to drive traffic.
  • Google News, Apple News, Meta (Facebook), and others have become gateways to reaching audiences. These platforms also generate revenue through user engagement.
  • These digital platforms use copyrighted content from media houses to drive user engagement. Users have increasingly shifted to consuming news through these snippets rather than engaging with news sources.
  • As a result, media organisations are restricted from revenue through the content they produce through aggregating said content. Digital platforms, meanwhile, get the full benefit of monetising data or advertising using that content.

Broadly, the commission wants to investigate digital platforms as gatekeepers to consumer data in South Africa, with local publishers not having full access to information which would allow them to have a better understanding to serve local consumers.

“The inquiry 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 commission said.

The inquiry 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.

Additionally, the inquiry will 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.

“Importantly, the inquiry’s scope is limited to businesses within the South African news media sector, including news publishers and broadcasters,” the commission said.

The inquiry will be led by James Hodge, Chief Economist and Acting Deputy Commissioner of the Commission, with veteran media practitioner Paula Fray serving as a panel member.

As part of the launch, the inquiry also released a Statement of Issues and Requests for Information (RFI) to platforms, Adtech companies, and media organisations following the publication of the final Terms of Reference in September 2023.

During this initial phase, the inquiry plans to conduct two rounds of information gathering, with public hearings scheduled for March 2024.

All interested stakeholders and the public are to submit their input on the Statement of Issues by November 14.

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