This blog was co-authored by Adriaan Lourens, candidate attorney.
In February 2025, the Competition Commission released the Media and Digital Platforms Market Inquiry Provisional Report. The Report examines the impact of global digital platforms, such as Google, Meta, and Microsoft, on South Africa’s local media industry. It addresses key concerns regarding advertising revenue distribution, algorithmic fairness, and the influence of artificial intelligence (AI) technology on local news publishers.
The Commission initiated the Inquiry under section 43B(1)(a) of the Competition Act, 1998, in response to the rapid transformation of the media industry. The shift to online news consumption has disrupted traditional revenue models, which the Commission considers increasingly unsustainable. The inquiry aims to develop recommendations that will help safeguard South Africa’s local media industry.
Key findings
The Report outlines several challenges facing the local media industry, including the influence of search engines, social media, generative AI, digital advertising technology (AdTech), and regulatory constraints. This article examines the Commission’s findings on the impact of search engines and social media, particularly the Commission’s perspective on how their algorithms and AdTech affect revenue streams.
The Commission’s provisional findings suggest that Google’s dominance in the search engine market may result in an unfair distribution of value, potentially disadvantaging local news publishers. The Report raises concerns that Google’s algorithms may prioritise international and subscription-based content while underrepresenting local and community media. Similarly, the Report claims that social media platforms such as Meta, YouTube, and X restrict referral traffic to legitimate local news content, limiting monetisation opportunities for local media while amplifying sensationalist content. The Commission suggests that algorithm-driven advertising may disadvantage non-English media. Further, restrictive data-sharing policies by search engines and social media platforms hinder targeted advertising by local publishers.
Proposed remedies
To address these concerns, the Report recommends wide-ranging remedies.
The Commission proposes that Google should compensate South African news media for the estimated R300-R500 million it allegedly extracts annually through unfair revenue sharing. To facilitate this, the Report recommends the establishment of a dedicated fund to distribute the compensation. This fund should support local news media and broadcasters by financing initiatives aimed at enhancing digital news capabilities and strengthening local journalism. Funding should be allocated not only in proportion to content contributions but also based on the relative needs of news media and their contribution to media diversity and pluralism. It is recommended that this funding be made available for a period of at least three to five years.
Additionally, to boost referral traffic, Google should adjust its algorithms to reduce biases favouring foreign media, introduce a South African news filter, and improve search visibility for local media. It should provide detailed user data and search engine optimisation support to local publishers. Should these measures not be implemented, the Report recommends imposing a 5-10% digital advertising levy on Google’s revenue. The income from this levy would be directed into a media industry fund, to be distributed to the news media based not only on relative content levels, but also relative needs and contribution to media diversity and pluralism.
For social media, the Commission suggests that YouTube increases its revenue-sharing rate with local media publishers to 70% and provide a transparent breakdown of revenue calculations. Meta and X are urged to stop deprioritizing news links and to restore referral traffic to local news media. Similar to Google, should these remedies not be adopted, the Commission proposes a 5-10% digital advertising levy on social media platforms’ revenues, which would be allocated to a media industry fund.
Implications and challenges
The provisional Report raises important questions about the influence of global digital platforms on local media revenue streams. As one of the most far-reaching market inquiry reports to date, the Report has raised questions about whether it falls within the Commission’s purview to recommend such wide-ranging findings and remedies. The underlying assumptions in the Report require scrutiny, as some issues may stem from changes in consumer behaviour rather than solely from the dominance of digital platforms.
While the Commission’s recommendations may lead to an increase in the revenue share for local news publishers by pressuring digital platforms to adjust their algorithms and business models, enforcing these changes could be challenging given the global nature of digital platforms. There is also a risk that stringent regulations could discourage investment and have consequences for digital innovation in South Africa.
The period for public comment closed on 7 April 2025. Stakeholders will need to closely watch how the Commission’s final report takes shape and what impact it will have on media publishers, advertisers, and digital platforms operating in South Africa.