The regulator launches major investigation into Google, Facebook (banned and designated as extremist in Russia), TikTok and ChatGPT.
The Competition Commission has published the final terms of reference for its Media and Digital Platforms Market Inquiry, which aims to sniff out imbalances and competition issues related to dominant news aggregators and local South African media publications.
According to the commission, the inquiry is specifically looking at the growing imbalance between news publishers in South Africa and large platforms like Google, Facebook and Apple, which take extracts of copyrighted work and place them on aggregated news feeds.
The commission noted that these search and social media platforms fund themselves through advertising revenue and drive consumer traffic, engagement and data collection to support that revenue stream.
However, news media content produced by news publications is used to drive this traffic and engagement. While they also push referral traffic to these news sources, opaque algorithms and curation tactics create an imbalance that heavily influences publications’ ability to compete effectively in the digital space.
“The Commission has reason to believe that there exist market features in digital platforms that distribute news media content which impede, distort or restrict competition,”
In its terms of reference, the commission laid out the imbalance between digital platforms and the media:
- Digital platforms have grown significantly over the years, and the transition to digital news has seen advertising revenues in the media space decline significantly.
- Media organisations face prohibitively high costs to compete in the digital space and now compete with digital platforms while also being heavily dependent on them to drive traffic.
- Google News, Apple News, Meta (Facebook), and others have become gateways to reaching audiences. These platforms also generate revenue through user engagement.
- These digital platforms use copyrighted content from media houses to drive user engagement. Users have increasingly shifted to consuming news through these snippets rather than engaging with news sources.
- As a result, media organisations are restricted from revenue through the content they produce through aggregating said content. Digital platforms, meanwhile, get the full benefit of monetising data or advertising using that content.
Broadly, the commission wants to investigate digital platforms as gatekeepers to consumer data in South Africa, with local publishers not having full access to information which would allow them to have a better understanding to serve local consumers.
This is exemplified through opaque changes to algorithms or curation measures, which could – at a whim – completely change visibility and referral traffic for media houses, with no clear indication as to why. “This situation is worsened by the lack of engagement by these companies,” the commission said.
Adding further concerns to the imbalance, the commission also noted more recent trends with artificial intelligence and language models like ChatGPT, which source news content – without permission – to train on and provide “news” to users.
Again, media organisations have copyrighted content used without revenue; at the same time, the output from these models may be mixed up, inaccurate or outright false, and may cause reputational damage to the various sources used.
The commission said that all these factors warrant investigating the media platforms and their relationship with local media.
The platforms being investigated include:
- Search engines (Google, Microsoft Bing, etc)
- Social media sites (Facebook, X, etc)
- News aggregators (Google News, Apple News, etc)
- Video sharing platforms (YouTube, TikTok, etc)
- Generative AI services integrated into any of these platforms (ChatGPT, etc)
- Any other platforms identified during the course of the inquiry.
The inquiry will focus only on businesses in the South African news media sector.
Source: Business Tech