South Africa’s antitrust watchdog wants to impose an “advertising tariff” on the world’s biggest search, social media and AI companies that fail to increase revenue shares for local news organisations after identifying a string of competition concerns in the market.
Unveiling its provisional findings today in its sector probe into media and digital platforms, South Africa’s Competition Commission revealed a slew of potential remedies targeting Meta, Google, Microsoft, OpenAI, X and TikTok, adding that they “do not produce news themselves and cannot replace journalism’s role”.
The agency proposed that Google must “compensate” South African news media with annual payments amounting to 300 to 500 million rand (€15.6 million to €26 million) for at least three years to address an “imbalance in shared value” extracted from its online search business.
As a last resort, the agency said it may impose a 5% to 10% “digital levy” on search, social media and AI companies if they cannot fairly compensate news media organisations for the distribution of content after the provisional report identified a suite of concerns.
In a wide-ranging 134-page report, the agency noted the financial challenges many media organisations face as traditional revenue models have been replaced with the need to find digital ad streams, noting “shrinking newsrooms, closed bureaus, and news deserts outside the metros”.
The large digital platforms have exacerbated these issues by hindering the ability of news media to secure and monetise digital traffic, the agency said.
Setting out a long list of concerns, the agency accused Google’s search result algorithm of favouring foreign media over local South African outlets. It also claimed it ranks YouTube-hosted videos higher than those on media websites.
The agency accused Meta of deliberately deprecating “credible news content”, along with posts containing links to media websites, which it says has effectively eliminated half of the media’s referral traffic. The report also levied similar allegations against X for reducing the exposure of posts with links on its platform.
Google-owned YouTube also came under fire for its rules restricting the ability of news media to monetise their content, noting that the YouTube Partner Programme eligibility criteria, which grants members a 70% revenue share, excludes many news providers.
The agency also targetted Google’s advertising technology model, noting its “superdominant position” across the ad tech chain. Google offers “insufficient transparency” on advertising pricing and deduction for local publishers, the agency said.
News media are placed at a user data disadvantage by Google sharing data across its products, but not with the websites themselves, it added.
Meanwhile, the commission found that AI chatbots such as OpenAI’s ChatGPT unfairly use media content to train their large language models.
“Like search, the manner in which AI Chatbots summarise news queries and provide limited source links is unlikely to result in much shared value through referral traffic to the news websites,” the report said
As part of the agency’s provisional remedies, it said Meta and X must also stop deprioritising news posts with links, while the former must facilitate at least a 100% increase in referral traffic to news media, the agency said.
The report recommends YouTube improve news media’s ability to monetise content by increasing revenue share to 70%, while advocating for organisations to collectively negotiate with AI companies for content deals to train 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,” it said.
In addressing Google’s dominance in the advertising technology market, the agency suggested that any future remedies resulting from cases in the EU and US can be applied to South Africa.
Stakeholders will now have the chance to make submissions on the provisional findings before the agency publishes its final report in approximately five months.
‘A win-win solution’
During a press conference today, James Hodge, inquiry chair and the chief economist at the Competition Commission, said he expects the platforms to cooperate with the agency on remedies despite the “bluster” coming from the US administration.
On Friday, President Donald Trump signed an executive order to defend “American companies and innovators from overseas extortion”, warning that the government will scrutinise regulations such as the EU’s Digital Markert Act and Digital Services Act.
Hodge stressed that the South African agency has the right to regulate the behaviour of the targeted companies in its report and rejected concerns that the tech platforms could halt operations in South Africa. “We still represent a desirable market where they earn good revenue,” he said.
The agency’s provisional remedies allow companies such as Google and Meta to use South Africa as a testing ground to offer alternatives to the news media collective bargaining tools used in other jurisdictions, Hodge said.
“They would be foolish not to engage,” he added, noting that the South African agency’s use of market inquiries instead of regulation to tackle conduct in digital markets allows it to find “win-win solutions”, instead of applying rules that “harden attitudes” and result in litigation.
Meta, Google, Microsoft, OpenAI, X and TikTok were contacted for comment.
Counsel to Google
MGI Competition Law
