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Competition Commission puts global digital media platforms under content use scrutiny

Competition Commission puts global digital media platforms under content use scrutiny
Facebook headquarters in Menlo Park, California, US, on 25 October 2021. (Photo: David Paul Morris / Bloomberg via Getty Images) | A sign is posted in front of an office at Google headquarters on 2 February 2023 in Mountain View, California. (Photo: Justin Sullivan / Getty Images)

The commission has announced the terms of reference for a market inquiry into the distribution of content on digital platforms. This could mean Facebook, Google and other tech giants may have to pay for the privilege of running content on their sites.

The Competition Commission has set its sights on news aggregators, search engines, social media sites and video-sharing platforms, with the proposed terms of reference announced for a market inquiry into the distribution of media content on digital platforms. This could mean a clampdown on Google, Meta, TikTok and other social media.

The Media and Digital Platforms Market Inquiry has now invited the public and stakeholders to make written submissions on the proposed terms of reference.

The inquiry has been prompted by concerns that digital platforms such as Facebook, Google and others are engaged in anti-competitive conduct by distributing content that may have adverse implications for the news media sector in South Africa, threatens fair payment for content and puts the sustainability of independent journalism at risk. 

Questions have been asked for years about the role and impact of digital platforms, from alleged anti-competitive conduct and privacy concerns, to disinformation and harmful content, to disparities in regulation and copyright issues. 

On 2 December 2021, local publishers including Media24, Caxton and Mail & Guardian complained to the commission that Google and Facebook (now Meta) were using publishers’ content at no cost to grow their market dominance. 

In a statement, Hoosain Karjieker, the CEO of Mail & Guardian Media and chairperson of the industry association Publishers Support Services, said: “Our objective is to get them to compensate us fairly and equitably for our journalistic efforts, hence we are making submissions on their behaviour in the local market to the Competition Commission’s market inquiry into online platforms in South Africa.”

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Significant consumer and competition issues

Regulators in Canada, the EU, the UK, Australia and other markets have already tried to force technology giants such as Meta (the owner of Facebook, Instagram and WhatsApp) and Google to pay media outlets for carrying others’ content on their platforms. Investigations have spanned online search, search advertising and display advertising services. 

On 4 December 2017, the Australian Competition and Consumer Commission launched the world’s first digital platform services inquiry into the impact of digital platforms on competition in media and advertising markets. The commission’s 18-month probe culminated in various interim reports, with the final one to be published on 31 March 2025.

Google, similarly, has faced investigations by competition regulators in the EU, South Korea, India and Russia. In 2007, the Federal Trade Commission (FTF) launched a probe into its DoubleClick ad network. After an eight-month investigation, the FTF said: “After carefully reviewing the evidence, we have concluded that Google’s proposed acquisition of DoubleClick is unlikely to substantially lessen competition.” 

On 4 June 2021, regulators in the UK and the EU launched formal competition investigations into Facebook at the same time, marking a rare coordinated probe of a tech giant. The UK’s Competition and Markets Authority said it was investigating whether Facebook was abusing a dominant position in the social media or digital advertising markets through its collection and use of ad data.

Last year, on 19 December, the EU announced an investigation into Meta for possible antitrust violations stemming from the link between its social media service and its online shopping platform, Facebook Marketplace.

The European Commission said that because of Meta’s dominance in social media, competition regulators in Europe were concerned that the company’s simultaneous offering of both services in a single package could help it to muscle out online classified ad rivals. 

In January 2023, the European Commission opened a formal antitrust investigation to assess whether Google had violated EU competition rules by favouring its own online display advertising technology services in the ad tech supply chain. That probe is set to examine whether Google is distorting competition by restricting access by third parties to user data for advertising purposes on websites and apps while reserving such data for its own use.

‘Present at all levels of the supply chain’

The commission’s executive vice-president, Margrethe Vestager, explained: “Online advertising services are at the heart of how Google and publishers monetise their online services. Google collects data to be used for targeted advertising purposes, it sells advertising space and also acts as an online advertising intermediary. So Google is present at almost all levels of the supply chain for online display advertising. 

“We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack. A level playing field is of the essence for everyone in the supply chain. Fair competition is important — both for advertisers to reach consumers on publishers’ sites and for publishers to sell their space to advertisers, to generate revenues and funding for content. 

“We will also be looking at Google’s policies on user tracking to make sure they are in line with fair competition.”

In a statement, the Competition Commission said its inquiry follows international inquiries and investigations by competition authorities on the impact of digital platforms on news media publishers that use these platforms to distribute their content online. 

“This includes the generation of advertising revenue and the ability of news media to sustainably provide quality news content to the benefit of consumers and democracy. 

“These global inquiries and investigations have found that large digital platforms, such as search engines and social media sites, are important gateways for news content to reach consumers. This can create an imbalance in the trading relationship between the news media and digital platforms.”

South Africa has experienced a growing shift in the consumption of digital news sources due to the increasing usage of smartphones and more affordable access to the internet. With that, consumer behaviour has changed in how they access news and information, which has affected the cost and revenue of news outlets, and depleted revenue from advertising,

The commission said that while digital advertising revenue had increased and there was potential for aggregator content revenues, the features of digital platform markets can influence the size of these revenue streams.

The main focus is on search engines, social media sites, video-sharing platforms, and news aggregation platforms. The inquiry will also look at new technologies adopted by digital platforms, such as artificial intelligence (AI) and search support (ChatGPT), and their impact on the local news media sector. 

The inquiry will focus only on businesses within the SA news media sector, including news publishers and broadcasters.

Written submissions can be sent to [email protected] for the attention of Noluthando Jokazi by 4pm on 20 April 2023. 

The inquiry commences 20 business days after the publication of the final terms of reference. DM/BM


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