Five key takeaways from the Competition Commission report into Big Tech and the SA media

The South African Competition Commission’s Media and Digital Platforms Market Inquiry (MDPMI) final report was released on Thursday, 13 November, and like the provisional report, it offers some stark findings. It’s hard to do the full report justice, but some key takeaways will reverberate in the sector for years to come.

The inquiry began in October 2023 and deals with some of the thorniest issues facing democracies across the globe.

Specifically, it deals with social media platforms like Meta, TikTok, X, Google and YouTube, and their relationship with South African news media. It includes media from Daily Maverick to News24, the SABC and hundreds of small commercial independent media outfits.

Read more: Competition Commission report on Big Tech and media offers scant hope to beleaguered industry 

The inquiry looked at monopolies and news media sustainability, the impact of AI, the models used by digital platforms, the advertising environment and context, and crucially, the rise and threat of misinformation and disinformation. For each of these issues, the inquiry has made findings and recommendations.

For those keen to understand how South Africa’s information ecosystem works, the simplest answer is to read the MDPMI report. Aside from anything else, the report sets out critical issues, the key players, levers and dynamics clearly and simply.

Below are five key takeaways.

1. Global digital giants undermine sustainability of SA news media 

The MDPMI is framed by the critical role news plays in a democracy, and how it helps protect a range of constitutional rights and is a public good.

It deals with how Big Tech platforms benefit from news but increasingly disproportionately extract value from news, to the point where news media are facing, in many instances, extinction-level events.

On Google, the report finds, “The conduct has an adverse impact on the quality and consumer choice of SA news media, particularly the diversity of media through SME and HDP-owned [Historically Disadvantaged Persons] media that offer community and vernacular media, along with the public broadcaster.

“Harm to the quality and diversity of media, along with the plurality of voices and the ability for citizens to get news in their home language, undermines citizens’ constitutional rights and hence the adverse effect is considered substantial.”

The report sets out key issues with the major social media platforms and concludes: “The conduct identified has an adverse effect on competition through:

• Throttling referral traffic.
• An imbalance in bargaining power over the monetisation options offered to the news media in SA that effectively excludes the majority of small independent and community media from monetisation options.
• Distorting competition for user attention and monetisation between credible and regulated news media content and unregulated, untrusted sources of misinformation through algorithmic promotion of sensationalist content over factful news reporting.”

At the heart of the matter is a profound imbalance of bargaining power that allows dominant platforms to dictate terms, extract value, and erode the revenue base of publishers, particularly vernacular, smaller and “Historically Disadvantaged Person”-owned media.

Doubtless, some people will delight in the idea of big established media enduring the same tactics they exercised some decades ago over other media. The reality now, however, is that all news suffers, and the public’s access to credible, accurate news is undermined and threatened.

Online advertising is dominated by Google. Unsurprisingly, the inquiry goes into depth about the structure of online advertising and finds it is dominated by Google’s AdTech stack.

“Google has established a super-dominant position in the entire AdTech stack value chain in SA. This has been achieved through entrenchment strategies, many of which are ongoing.”

What is perhaps most interesting about this section of the report is that the inquiry doesn’t believe it will be effective to suggest piecemeal remedies for South Africa, but rather believes that structural changes are necessary. It suggests that Google will have to abide by and implement the findings of already existing investigations into its AdTech monopoly taking place in the US and the European Union (EU).

The remedies are fairly broad and include: “Any structural remedy implemented by Google emerging from the EU AdTech investigation and the US AdTech case, Google will extend this to South Africa. Google will extend any behavioural remedies emerging from the EU AdTech investigation in SA.”

In effect, the commission has made similar findings to those in the EU and US and wants to ensure Google applies them in South Africa. This has the potential for significant change in our online advertising system.

2. Generative AI and news

Here, a big issue is how data used to train artificial intelligence systems have drawn on news media as a central source material. In many instances, AI systems have used news media content without agreement or acknowledgement.

Yet again, we have a scenario where technology platforms benefited from the news for their growth and popularity, while their current models offer little in return for news media.

“The AI developers have already benefited from SA news media content in the training and development of their AI foundational models and chatbots, but this is likely to be a very small fraction of the total training dataset based on information currently available to the inquiry.”

The consequences are spelt out:

“There is currently little interest from AI companies in doing content deals with SA news publishers, as the AI companies pursue a handful of deals with large global media groups which will be compensated for use of their content.

“There is a strong likelihood of favouring content, and hence sources, from those global media companies for which content deals have been struck, which further reduces the potential for referral traffic from AI chatbots even if SA media wished to opt into being used in those summaries. This means that SA news publishers are likely to be left out of AI monetisation options. One of the barriers to licensing deals may be the smaller size of the SA media, where collective selling may solve this issue.”

The remedies proposed focus mostly on media opting out of their content being used for training and how to more effectively benefit from AI systems.

3. Pay the money, combat the harms

Perhaps most controversial are the sections on remedies for the anti-competitive and harmful behaviours highlighted above.

The provisional report put forward the notion of a possible digital tax. That idea seems to have fallen by the wayside (forgive me if I missed it in the report) and is instead addressed by a range of remedies where the various platforms need to make contributions.

Google needs to contribute about R114-million to its Digital News Transformation Fund for three years, with additional funding of around R38-million for two years after that. In addition, Google is being asked to contribute R71-million a year for five years to mainstream national media, including the SABC, through so-called showcase deals.

This may sound like a lot of money, but when we look at the scale of our news media and the cost of providing credible, accurate information, many will feel the amounts are insufficient.

Remedies for social media platforms, while not matching in financial terms, are also significant and range from providing similar support programmes and systems in SA to those that are available in other countries, to ensuring more people are employed to engage and train in systems and respond to issues.

Significantly, for us at Moxii Africa (we are rebranding from Media Monitoring Africa — MMA) are the recommendations on addressing and mitigating online harms and misinformation and disinformation. We are excited to see support for our ideas about the establishment of an independent mechanism, possibly in the form of an ombud, to help address misinformation and disinformation.

“Looking to establish a regulatory framework for the establishment of a social media ombud to represent consumers in their disputes with social media platforms and to refer certain matters to the appropriate regulatory body for investigation and/or prosecution,” says the report.

4. Collective bargaining and digital literacy

The report has highlighted the critical importance of news to democracy as a whole. Not only has it highlighted news as a public good, it has also served to show in concrete terms its value, how it has been undermined and how it can and must be remedied.

It is a pity that the final report has less focus on the news and information ecosystem as a whole. This omission makes the inquiry appear to be largely that of news entities versus digital platforms. That is, to a large degree, correct, but it is critical to acknowledge bodies and entities that help sustain the information ecosystem, from self and co-regulatory bodies such as the Press Council and Broadcast Complaints Commission to media rights NGOs and, critically, the public and audiences.

While not explicit, in terms of the ecosystem in which news and social media operate, a critical finding was also the remedy that the major platforms, including Meta, X (Twitter) and TikTok, all support the development of a digital literacy programme for adults and children. It’s an important step in equipping people with the necessary skills to navigate their online worlds and help surface credible news.

5. Conclusion

The MDPMI final report concludes that SA’s news media provide a fundamental public good — holding power to account and informing democratic society — for which the current market structure cannot compensate publishers. This market failure results in suboptimal news coverage.

To counteract the overwhelming market power of the dominant platforms and address the crisis of local journalism, the overarching solution is to enable and require Big Tech to enter into collective negotiations with news media on critical issues, including fair content monetisation, AdTech and generative AI compensation.

The final report may not satisfy all, but it has set some critical boundaries and served to highlight just how much the odds are stacked against the news sector. It’s now up to us, up to civil society, industry, platforms and news media to ensure that the issues raised are not only addressed, but that the recommendations are implemented. Where they are not, those in power need to be held accountable. DM

William Bird is the director of Media Monitoring Africa, Ashoka and a Linc Fellow.