Competition Commission warns: AI and Big Tech's grip on media threatens South Africa's democratic foundations

The Competition Commission on Monday released its long-awaited Media and Digital Platforms Market Inquiry preliminary report, which revealed systemic threats to South Africa’s news media, driven by global Big Tech such as Google, Meta and AI developers.

The commission believes that the resultant decline in SA journalism risks undermining the institution of democracy and the constitutional right to information in the country, as well as reducing media diversity.

“The rapid decline of the media has severe consequences for our democracy and the constitutional rights of citizens. This decline will not be addressed by the platforms that currently benefit from news content, as they do not produce the content themselves,” said consultant and media expert Paula Fray during the inquiry presentation.

Generative AI: a new frontier of exploitation

Since 2019 the use of artificial intelligence (AI) in the commercial and public sector has exploded, with offerings from every large tech company and permeation into almost all aspects of digital life; from the better-known implementations such as ChatGPT, Gemini and Copilot to the tweaking of algorithms that govern how search engines present and summarise information.

The training of the models that provide the logic behind AI models is broadly similar: they have all been broadly fed incredibly large sets of data with which to formulate their responses. Crucially, much of this data is copyrighted or proprietary.

One example is the scraping (downloading and ingestion) of data by Meta, which trains its models in part by using the largest repository of pirated literature and journals to ever exist, LibGen.

While Meta might escape legal liability in torrenting 80.8TB of copyrighted material, Aaron Swartz, a prolific programmer and open-internet activist was not so lucky. He faced up to 50 years in prison and $1-million in fines after he made public about four million academic journals from JSTOR. After his prosecution, he died by suicide in January 2013.

As models have developed in sophistication, they’ve begun to interact and scrape data from publicly available websites; including South African news publications such as the one you’re reading now. A simple Google search will demonstrate this — ask a question about a South African news issue and Google will provide an AI summary, with data primarily generated from news outlets.

While this might seem innocuous, South African digital news outlets rely heavily on two primary modes of income: subscription revenue and advertising. Content scraping, and thus the use of proprietary information and reporting in an AI output, means less need to subscribe or visit a news publication’s website, leading to a decline in revenue from subscriptions and advertising.

“There is no means to opt out of AI summaries because it is tied to search indexing, which the news media cannot opt out of, as it would eliminate all search traffic,” said Fray.

How Google starves SA media of revenue

For more than a decade, Google — under its parent company, Alphabet — has dominated the digital advertising market, holding a near monopoly. Google’s Ad Exchange is entrenched as the primary platform on which to target and deliver advertising, with the largest data points to refine targeting in the form of its platforms such as YouTube and Google Search.

“Google benefits from content to respond to news queries, with news queries constituting a significant portion of total searches, generating an estimated R800- to R900-million in value, while the news media benefit from referral traffic was estimated at circa R200-million in 2023,” said Fray.

Read more: Big Tech monopoly blamed for media downturn, Google urged to pay up to R500m annually to a fund

The platform also punitively engages with competitors, charging exorbitant fees to rivals and driving viewers to the most profitable language results, excluding or limiting advertising in local languages, meaning that local media is unable to generate revenue outside of the languages that Google prescribes.

James Hodge, the acting deputy commissioner of the commission said: “The search design and algorithm choices of Google and, in the future, Microsoft, that reduce referral traffic to the SA media have to be addressed in order to ensure that they can monetise their content.”

Potential solutions on the table

AI scraping is probably the largest threat facing news media organisations on digital platforms today. However, the commission is not naive in thinking that it will be easy to enforce — or even encourage — change or compliance from Big Tech, particularly since these companies are based overseas, many in the US, and operate under a US administration unlikely to lend a sympathetic ear to South African media concerns.

The first option proposed by the commission is for AI companies to offer news media an option to opt out of AI training and scraping, meaning that their data are not ingested by popular AI tools. While there is no direct option with current AI web models, there are methods to enact this already. Some hosting providers such as CloudFlare offer this service, while particularly tech-savvy media houses can script this themselves, though in some cases it could put at risk Google search crawling — and thus SEO ranking.

Read more: Competition Commission inquiry — SA media companies welcome smackdown for Big Tech

“AI tools are also offering daily news summaries, and the refusal to provide data indicates AI summaries reduce referral traffic, harming the media excluded from content deals,” said Fray.

Should there be no compliance from these companies, Hodge suggested collective bargaining by the media, and failing that, the implementation of a levy of 5-10% on AI firms if they fail to boost referral traffic or compensate media fairly.

Regarding the monopoly that Google has on digital advertising, the commission proposed a regulatory solution: the provision of regulations similar to that of the EU or US antitrust hearings, which created greater transparency and broke up the sheer dominance of Google in the market.

The commission also suggested that these reforms compel Google to support advertising in local languages for digital campaigns.

While these suggestions are in the preliminary report, it is yet to be seen how they would be enforced in a manner that would ensure success, with a small country such as South Africa having to go toe-to-toe against some of the largest tech companies in the US.

Why we care — and why you should too

No matter one’s political disposition, a free and prosperous news media is a fundamental pillar of a successful democracy.

Read more: The state of the media

Should you decry the state of the news media — globally or in South Africa — it’s important to note that part of the decline in quality, or perceived bias is because a huge drop in revenue has meant increased juniorisation of newsrooms, with far less staff to cover many more stories at a faster pace, and a combination of pressures that might mean that those who decide on funding make less neutral decisions than would be preferred.

Hodge was clear, concluding: “Media is a public good, promoting democracy by keeping the population informed and holding institutions to account. The rapid decline of the media has severe consequences for our democracy and the constitutional rights of citizens.”

Either way, the increased cannibalisation of revenue for South African news media means a deterioration of the quality of news produced, and the less reliable information provided by citizens to participate in democracy — an existential threat not only to media but the institution of democracy itself. DM