The Competition Commission on Tuesday officially launched its Media and Digital Platforms Market Inquiry (MDPMI) after publishing the final terms of reference (ToRs) a month ago.

The MDPMI will investigate the distribution of media content on South Africa’s digital platforms, including search, social media and news aggregation platforms, and the advertising technology (Adtech) markets that connect buyers and sellers of digital advertising inventory.

The main digital platforms that the inquiry will focus on include search engines, such as Google Search and Microsoft Bing; social media sites, such as Meta; news aggregator sites and applications, such as Google News and Apple News; and video sharing platforms, such as YouTube and TikTok.

The inquiry will also examine Adtech market participants on the supply-side, demand-side, and Ad exchanges, as well as new technologies integrated into digital platforms, including generative artificial intelligence (AI) search support such as ChatGPT, and the impact these may have on the operations of businesses in the South African news media sector.

“The inquiry comes at a critical moment for the media industry as news consumption rapidly shifts online and traditional sources of funding through print and broadcasting advertising decline,” said Competition Commission commissioner Doris Tshepe.

“While digital offers the potential for new services or funding, the media must compete with the search and social media platforms used by consumers to discover media stories for such funding,” she explained during a virtual launch of the inquiry, where the panel responsible for the inquiry was introduced.

The panel will be chaired by Competition Commission acting deputy commissioner and chief economist James Hodge and includes veteran South African media practitioner Paula Frey, with support from a technical team.

The panel will explore the impact of platforms on the diversity of news and the sustainable entry and expansion of smaller and historically disadvantaged news organisations; the impact on news broadcasters, including the public broadcaster; and the emergence of AI chatbots that may use media content to be trained and compete against the media at the same time, Tshepe commented.

South Africa's media –  private, public and community media publishing print, broadcast or online – were already struggling when Covid-19 devastated economies, said Frey.

“Covid-19 [led to] the closure of magazines and small publications, with a loss of up to 400 jobs in the early stages of the pandemic, while many media workers took pay cuts or [were] furloughed. Not all media workers received a full salary when the lockdown was lifted, nor were all rehired as full-time staff,” she said, discussing one of the many challenges seen in the current media landscape in South Africa.

“Those who have survived do so with limited resources. Indeed, newsrooms are expected to do more with fewer resources. Media must find a new business model while the machine is still moving.”

Further, South Africa’s recent census shows an increase in Internet connectivity with only 21% of South Africans not having any access to the Internet and many South Africans receiving news and information online, including through social media.

The digital environment, with its promise to level the playing field, poses additional challenges, and there is a need to find workable business models for sustainability.

Hodge noted that these topics are being explored globally, and the Competition Commission’s inquiry aims to go deeper and further than most of those debates, and to include news broadcasters as well.

“For one, it is not just [focused] on the print media, but we are focusing on news broadcasters too . . . [as] increasingly, the news broadcasters, and even the public broadcaster, are reliant on video sharing platforms and other news aggregation and certain social media platforms to distribute its news and to generate income as consumers move away from the time-based approach of looking for the seven o'clock news.”

The inquiry also includes AI as it has rapidly exploded since the launch of ChatGPT to the public a year ago.

“We have seen the power of that chatbot and whereas previously, those chatbots only had access to historical information, recent announcements have indicated that they now can track real-time data, which means that they have the potential to become a source for current affairs and displace direct sourcing from the media themselves,” Hodge pointed out.

Hodge outlined that the inquiry has seven broad areas of focus, as set out in the ToRs and the newly published Statement of Issues.

The first scope will evaluate the trends, adoption and use of the relevant digital platforms to aggregate and display news content online and the importance of digital revenue sources for news media organisations, while the second scope evaluates whether market features distort competition for advertising revenue, consumer data and subscription fees between news media organisations and the relevant digital platforms that display and distribute news media content as intermediaries to consumers, including news aggregators.

The panel further aims to probe whether there are any imbalances in the bargaining power in the commercial relationship between news media and relevant digital platforms and the impact of such imbalances on competitive outcomes affecting the news media industry, including pricing and non-price outcomes.

The fourth scope outlines an evaluation of whether competition for the distribution, display and monetisation of news content online between news media organisations through relevant digital platforms is distorted by market features including ranking algorithms, paid results, search engine optimisation, consumer and social network preferences besides others, and commercial relationships with news media organisations; and the effects of this on public access to credible news content as a public good.

In addition, the Competition Commission is investigating whether Adtech supply and demand side platforms and intermediary Ad exchanges used to surface digital advertising on websites or apps of the South African news media sector will impact on adoption and competition.

Scope six and seven include probing whether the current and future integration of generative AI systems in relevant digital platforms, including the AI review and assimilation of news media content, will have an impact on adoption and competition, and evaluating the impact of the quality and consumer choice of South African news media, as well as the impact on small and medium-sized enterprises and historically disadvantaged persons-owned news media organisations.

The Competition Commission has called on stakeholders to submit their views by November 14, following which the panel will publish a Further Statement of Issues in the week of December 4 focused on key emerging issues for stakeholders to make submissions, which will be due on January 15, 2024.

Public hearings are expected to be held from March 2 to 24, 2024, with the Competition Commission aiming to publish its preliminary findings and recommendations by the end of June 2024.

The Inquiry will invite submissions on these findings and recommendations by August 8, 2024, before consulting further and releasing its final findings and recommendations in January 2025.