Competition Commission guns for ChatGPT, other digital media platforms

The Competition Commission has published the draft terms of reference for its Media and Digital Platforms Market Inquiry based on its view that digital media platforms that distribute news media content could have market features that impede, distort, or restrict competition and have adverse implications for the news media sector in South Africa.

The commission says this imbalance can have implications for fair payment for content and the sustainability of independent journalism.

The Media and Digital Platforms Market Inquiry (MDPMI) was established in terms of Section 43B(1)(a) of the Competition Act and according to the commission it is underpinned by the value of a properly funded press to advance a well-functioning democracy that includes the diversity of views from smaller media businesses and media owned by historically disadvantaged people.

The inquiry will evaluate and determine the nature and extent that digital platforms affect the news media sector in South Africa and will broadly focus on:

• The interaction and dependency of South African news media businesses on relevant digital platforms as an intermediary, distributor and link to online users for the dissemination of news content online.
• The impact of it on news media businesses to aggregate, display, create and monetise their news content online.   

ALSO READ: Facebook rejects call to share revenue with Australian media

Focus on main digital platforms, AI, Chat GPT

The commission says the inquiry will focus on the main digital platforms that will include search engines, social media sites, video-sharing platforms and news aggregation platforms. As well as evaluate new technologies, such as generative artificial intelligence (AI) search support, such as ChatGPT and the significance these may have on the operations of businesses in the local news media sector.

The inquiry comes after several global inquiries and investigations led by competition authorities on the impact of digital platforms on news media publishers that use these platforms to distribute their content online, including the generation of advertising revenue and the ability of news media to sustainably provide quality news content to the benefit of consumers and democracy.

The global inquiries and investigations found that large digital platforms, such as search engines and social media sites, are important gateways for news content to reach consumers, but that this can create an imbalance in the trading relationship between the news media and digital platforms.

The commission says many countries adopted measures to alleviate the competition and consumer concerns due to the impact of digital platforms on the news media, mainly about the adoption and creation of a more equitable bargaining relationship between digital platforms and news media businesses.

These measures included access for news media businesses to consumer data collected by digital platforms where it concerns their online content and notification of significant changes to digital platform algorithms which impact news media businesses’ distribution of content.

ALSO READ: Google rejects call for huge Australian media payout

Growing shift in consumption of digital news sources

A similar trend is evident in South Africa with a growing shift in the consumption of digital news sources due to the increasing adoption and use of smartphones and more affordable access to the Internet.

The commission says the distribution of news content over digital platforms such as search engines, social media, video-sharing platforms and news aggregation sites or apps has become an effective way for news media businesses to reach consumers, but this created greater reliance on these platforms over time.

This change in consumer behaviour and distribution affected the cost and revenues of South African news media businesses, while it caused a loss of traditional classifieds and print advertising revenue, as well as additional costs in providing digital news feeds and ensuring visibility on these digital platforms.

Although digital advertising revenue increased and there is potential for aggregator content revenue, the features of digital platform markets can influence the magnitude of these revenue streams and the inquiry will consider this.

Members of the public and interested stakeholders can make written submissions on the proposed terms of reference and send them to Noluthando Jokazi at mdpmi@compcom.co.za by 4pm on 20 April 2023.

The draft terms of reference is available on the commission’s website.

The inquiry will review all submissions before publishing the final terms of reference on the commission’s website and the inquiry will start 20 business days after the publication of the final terms of reference.