Business Maverick

MEDIA EROSION

Digital platforms vs news media: Competition Commission launches probe into ‘unfair advantage’

Digital platforms vs news media: Competition Commission launches probe into ‘unfair advantage’
From left: Deputy Commissioner James Hodge at the Competition Tribunal in Johannesburg, South Africa on 13 May 2010. (Photo: Gallo Images / Nelius Rademan) | Competition Commissioner Doris Tshepe. (Photo: Al Drago / Bloomberg via Getty Images) | Journalist and entrepreneur Paula Fray. (Photo: Supplied)

South Africa’s newsrooms have been stripped to the bone. The commission has turned its sights on the media for a clearer picture of how AI, search engines, news aggregators and social media are allegedly conspiring to hammer the last nails into its coffin.

Search engines, social media sites, video sharing, news aggregators, generative AI and ad tech will be coming under heightened focus over the next year, as the Competition Commission begins an investigation into digital content in South Africa and the advertising technology markets that link buyers and sellers of digital advertising inventory.

It’s all to do with concerns that social media platforms and search engines are eroding local media.

The commission announced the Media and Digital Platforms Market Inquiry on 17 October, over concerns that platforms such as Google, TikTok, YouTube, Facebook, Twitter/X and others have unfair advantages and market practices, which are damaging SA’s news media sector. 

The 15-month inquiry – expedited from the legislated 18-month timeframe due to urgency, explained commissioner Doris Tshepe – will be led by James Hodge, chief economist and acting deputy commissioner of the commission, with seasoned journalist and entrepreneur Paula Fray serving as a panel member. Fray is a founding board member of the Accountability Lab and has served as a deputy Press Ombud and a public representative on the SA Press Council.

Tshepe told journalists on Tuesday that the inquiry comes at a critical moment for the media industry, as consumption patterns have shifted rapidly online and traditional sources of funding for print and broadcasting advertising have declined.

“Whilst digital offers the potential for (finding) new services, the media must compete with… social media platforms used by consumers to discover media stories.”

These platforms, acting as gateways for consumers, shape who wins and loses, she said, in the battle for consumer attention. 

“The media… is not just any market, but rather one that is critical for an informed public and, most importantly, for a well-functioning democracy.”

Covid pushed many organisations over the edge as the media was already struggling when the pandemic struck, which resulted in the widespread closure of magazines and small publications. 

Up to 400 jobs were lost in the early stages of the pandemic, Fray said, as many media workers were forced to take pay cuts. Not all received full salaries or were rehired full-time after the lockdown was lifted. 

“A drop in print advertising and readership has largely fuelled cuts of staff, resources and editorial offerings. The pressure to produce more, with ever-shrinking resources, impacts the quality of journalism we receive, restricting the editorial team’s ability to do thoughtful, in-depth reporting and storytelling.”

The rise in digital platforms presents opportunities and challenges for the media, including the need for more sustainable business models, Fray said. 

“These [challenges] are driven by technological disruptions such as artificial intelligence, social media-fuelled pressures to tell stories faster amid a tsunami of misinformation and disinformation, online harassment, global challenges such as the war in Ukraine, economic pressures, reduced newsroom resources, post-Covid challenges to press freedom and press and freedom of information.”

The inquiry would focus on print and broadcast media too, Hodge explained. 

“The reason for this is that, increasingly, the news broadcasters and even the public broadcasters are aligned on video-sharing platforms and other news aggregation and search and social media platforms to distribute its news and to generate income as consumers move away from the sort of time-based approach of looking for the 7 o’clock news.”

The inquiry is in line with other investigations led by international competition authorities probing the effect of digital platforms on news media publishers, particularly in terms of ad revenue and the sustainability of quality news content. DM

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Comments - Please in order to comment.

  • Jacci Babich says:

    There is so much rubbish and disinformation put into the ether that you have to question everything you see. Look at how Russian intervention attacked the US elections. Give me a newspaper any day. It is there- not a fleeting glimpse. You choose to buy it, read it and respond to it. It’s face to face stuff not just horrible and hateful things people hurl at each other hiding behind the safe and faceless barricades of WhatsApps and social media.

  • Cornay Bester says:

    What about Bad reading skills?

  • Rob Wilson says:

    This is a generational issue. Most of DM subsribers would, I imagine, come from the newspaper generation. I know I do. I value trusted journalism and editing from established sources. That does not exist on social media platforms. Its a dog fight, and hugely misinformed most of the time simply because anyone can post virtually anything without much though as to the consequences. But what’s to do about it? I think that we should be teaching ‘communication technology’, including the pitfalls at school level very early.

  • Dominic Rooney says:

    What a colossal waste to time. Newspapers are dying because 1) the local press is largely useless and 2) people, the young particularly, have no interest in reading them. There is no conspiracy of “…AI, search engines, news aggregators and social media…”; they (“AI” ?) are simply responding to changes in the market. We used to take both the Cape Times and the Argus in this house. The former was a pretty good paper in the ’80s (showing my age !) but we cancelled both, the Times first and then the Argus after idiot Surve got his grubby hands on IoL. Now down to the weekly Maverick and the ST. Tried Business Day for a while but it was too expensive. The real culprits in the collapse of newspapers are the advertisers (commercial and classified) who moved to other media, followed rapidly by the news providers themselves. One may wish to grumble about the umbilical attachment of the young to social media but remember 1) we educated them (badly, obvs) and 2) gave them the ‘phones so who’s really to blame ?

    • Mike Walwyn says:

      This process is inexorable. I don’t believe there will be much, if any, print media available within a couple of generations. So the only way to produce high-class journalism will be electronically, and I believe this is exactly what DM is doing, which is why I joined up as a paying supporter. I get the full weekly edition plus regular snippets during the week, and I can carry it with me anywhere.

  • David Mitchley says:

    Once again the Competition Commission wasting taxpayers money.
    If the dinosaur print media can’t compete with online news, and I am not talking about social media which in my opinion is just a different gossip column, then they need to adapt.

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