Digital platforms vs news media: Competition Commission launches probe into ‘unfair advantage’

Search engines, social media sites, video sharing, news aggregators, generative AI and ad tech will be coming under heightened focus over the next year, as the Competition Commission begins an investigation into digital content in South Africa and the advertising technology markets that link buyers and sellers of digital advertising inventory.

It’s all to do with concerns that social media platforms and search engines are eroding local media.

The commission announced the Media and Digital Platforms Market Inquiry on 17 October, over concerns that platforms such as Google, TikTok, YouTube, Facebook, Twitter/X and others have unfair advantages and market practices, which are damaging SA’s news media sector. 

The 15-month inquiry – expedited from the legislated 18-month timeframe due to urgency, explained commissioner Doris Tshepe – will be led by James Hodge, chief economist and acting deputy commissioner of the commission, with seasoned journalist and entrepreneur Paula Fray serving as a panel member. Fray is a founding board member of the Accountability Lab and has served as a deputy Press Ombud and a public representative on the SA Press Council.

Tshepe told journalists on Tuesday that the inquiry comes at a critical moment for the media industry, as consumption patterns have shifted rapidly online and traditional sources of funding for print and broadcasting advertising have declined.

“Whilst digital offers the potential for (finding) new services, the media must compete with… social media platforms used by consumers to discover media stories.”

These platforms, acting as gateways for consumers, shape who wins and loses, she said, in the battle for consumer attention. 

“The media… is not just any market, but rather one that is critical for an informed public and, most importantly, for a well-functioning democracy.”

Covid pushed many organisations over the edge as the media was already struggling when the pandemic struck, which resulted in the widespread closure of magazines and small publications. 

Up to 400 jobs were lost in the early stages of the pandemic, Fray said, as many media workers were forced to take pay cuts. Not all received full salaries or were rehired full-time after the lockdown was lifted. 

“A drop in print advertising and readership has largely fuelled cuts of staff, resources and editorial offerings. The pressure to produce more, with ever-shrinking resources, impacts the quality of journalism we receive, restricting the editorial team’s ability to do thoughtful, in-depth reporting and storytelling.”

The rise in digital platforms presents opportunities and challenges for the media, including the need for more sustainable business models, Fray said. 

“These [challenges] are driven by technological disruptions such as artificial intelligence, social media-fuelled pressures to tell stories faster amid a tsunami of misinformation and disinformation, online harassment, global challenges such as the war in Ukraine, economic pressures, reduced newsroom resources, post-Covid challenges to press freedom and press and freedom of information.”

The inquiry would focus on print and broadcast media too, Hodge explained. 

“The reason for this is that, increasingly, the news broadcasters and even the public broadcasters are aligned on video-sharing platforms and other news aggregation and search and social media platforms to distribute its news and to generate income as consumers move away from the sort of time-based approach of looking for the 7 o’clock news.”

The inquiry is in line with other investigations led by international competition authorities probing the effect of digital platforms on news media publishers, particularly in terms of ad revenue and the sustainability of quality news content. DM