South Africa to probe how tech giants profit from news reports

In a landmark move, the Competition Commission of South Africa has initiated an extensive 15-month investigation into the practices of dominant digital platforms like Meta and Google to examine their use of news content to boost advertising revenue. The “Media and Digital Platforms Market Inquiry" (MDPMI) is set to look at market competition, the role of algorithms as gatekeepers and the implications for news media organisations in the light of the rapid transition to digital news consumption.

There is already global unease over the decline of traditional news media’s advertising income. In June the Canadian Parliament passed a law requiring tech companies to pay domestic news outlets for linking to their articles. Facebook subsequently enacted an all-out news link ban in Canada. In the same month, the largest newspaper chain in the US sued Google for monopoly of online ads.

Advertisers have moved online, where aggregator sites, social media and video platforms have users’ attention, and the global ad marketplace for print media has been cut in half in the past six years. In this new age, AI-driven algorithms dictate content visibility, influencing consumer traffic and the subsequent distribution of ad revenue — a matter the MDPMI seeks to address.

The prevalence of online platforms has not only shifted readership; it has also raised questions about the fairness of the way advertising profits are shared.

Joe Hamman, a director at Novus Group Media Monitoring, points out that as the media landscape evolves it is essential, for a healthy press, to ensure that access to ad revenue is equitable. This inquiry, he says, could pave the way for more sustainable media funding models.

What’s also at stake is the quality and diversity of news. There’s a worrying trend towards clickbait as news outlets compete. This can undermine in-depth reporting and investigative journalism. “The revenue system now prioritises user engagement at the expense of facts. This can lead to lower news quality, and sometimes even to the promoting the spread of fake news,” notes Hamman.

The investigation is expected to probe the bargaining power between news creators and digital giants. Platforms that aggregate news have changed how content is obtained and valued, with their algorithms playing a significant role in what news consumers see. These platforms’ influence on referral traffic to news websites is also a serious concern, potentially affecting how newsrooms are funded and operate.

South Africa’s inquiry aligns with a wave of international scrutiny and regulatory measures, mirroring the EU’s recent efforts to regulate digital markets.

“It’s a critical juncture for the media industry,” says Hamman. “The findings and recommendations of the commission could incite necessary changes to protect the integrity and viability of news media for years to come.”

The big take-out: As the media landscape evolves it is essential, for a healthy press, to ensure that access to ad revenue is equitable.