The Competition Commission has published the Media and Digital Platforms Market Inquiry (MDPMI) provisional report, outlining several key provisional remedies aimed at reshaping the digital platforms market in South Africa.

The Competition Commission embarked on the MDPMI in October 2023 to investigate whether certain market features on digital platforms that distribute news media content impede, distort or restrict competition, undermining the aims of the Competition Act, with material implications for the news media sector in South Africa.

“While there have been initiatives around media bargaining with digital platforms in other jurisdictions, this inquiry has been far more inclusive and ambitious by extending the terms of reference to include radio and television broadcasters, both commercial and public or community media, the impact of AI chatbots and AI-powered search, and the AdTech industry which affects the monetisation of traffic on news websites,” the provisional report explained.

The extensive evidence gathered for the provisional report shows a series of provisional findings against technology giants 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 impacts competition for digital advertising and journalism in South Africa.

Stakeholders have until April 7 to submit their responses to the inquiry’s provisional findings, recommendations and proposed remedial actions.

One such remedial action is for Google to compensate the South African news media between R300-million and R500-million a year, over a three- to five-year period, for the imbalance in shared value.

The report pointed out that Google’s monopoly position and the unequal bargaining position of the media means there has not been an equitable share of value between Google and news publishers in South Africa both historically and currently.

“This inequity has materially contributed to the erosion of the media in South Africa over the past 14 years and will continue to do so unless remedied,” the report explained.

Google is also required to implement changes to ensure that search engines sustainably create shared value with the media through increases in referral traffic, as well as remove search bias in favour of foreign media and YouTube, and the promotion of vernacular and community media.

The provisional report also recommended that Meta stop deprioritising South African news posts on the Facebook feed and to restore referral traffic to the media through algorithm changes to ensure at least a 100% increase in referral traffic, and for Meta and X to cease deprioritising news posts with links in the user feed.

A further recommendation is for YouTube to improve the ability of the media and broadcasters, including the South African Broadcasting Corporation, to monetise their content on its platform through increases in revenue share to 70% and active promotion of higher value direct sales by the media.

The Competition Commission further recommended amendments to the Electronic Communications and Transactions Act of 2002 to introduce platform liability for harmful content and the amplification of misinformation.

The inquiry proposed that the social media platforms partner and compensate the media on fact-checking, and that search and social media share richer anonymised user data for consumers engaging news content on their platforms to enable improved insights and monetisation of their audiences.

In addition, 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,” the report outlined.

Turning to Adtech, the inquiry proposed the domestic implementation of remedies agreed upon in the EU and the US, along with fee reductions and an end to self-preferencing conduct like exclusive access to YouTube inventory and charging competitors additional fees.

Globally, the media industry is undergoing rapid change owing 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 advertising revenue with digital advertising revenue has been elusive.

“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 Competition Commission said.

In South Africa, the financial challenges to commercial and community media, as well as the public broadcaster, have led to shrinking newsrooms.

With limited scope in South Africa for the majority to pay for news, subscription models are not an option for the public and community media.

“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 inquiry 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.

“It is important to note that the findings and remedies are provisional and that 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 final report will be published later this year after all submissions have been reviewed and the inquiry has further engagements with stakeholders.