Image: iStock
The Competition Commission today gazetted the final terms of reference for its Media and Digital Platforms Market Inquiry, which will investigate the distribution of media content on South Africa’s digital platforms and the advertising technology markets that connect buyers and sellers of digital advertising.
The inquiry was established in terms of the Competition Act, based on the commission’s view that there could be market features in digital platforms that distribute news media content and associated advertising technology markets that impede, distort or restrict competition and can have adverse implications for the news media sector in the country.
The inquiry comes after several global inquiries and investigations by competition authorities into 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 for the benefit of consumers and democracy.
ALSO READ: Competition Commission guns for ChatGPT, other digital media platforms
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 and can create an imbalance in the trading relationship between the news media and digital platforms that can have implications for the level of referral traffic and fair payment for content. This could collectively affect the sustainability of independent journalism.
Investigations across numerous jurisdictions into the advertising technology markets that sell the publisher’s display advertising inventory and purchase inventory on behalf of advertisers.
The advertising exchanges that connect these two groups wanted to determine whether concentration and conflicts of interest result in competition concerns, which may affect the volume of advertising, the size of bids for a publisher’s inventory and their share of the advertising spend.
There has been a similar trend 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 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, creating greater reliance on these platforms over time.
The commission says this change in consumer behaviour and distribution model has affected the cost and revenue of South African news media companies. There was a loss of traditional classifieds and print advertising revenue and additional costs to provide digital news feeds and ensure visibility on these digital platforms.
While digital advertising revenue increased and there is potential for aggregator content revenue, the features of digital platforms and advertising technology markets can influence competition for these revenue streams, and this is what the inquiry intends to consider.
This includes the revenue share on video-sharing sites for broadcasters, including the public broadcaster. The inquiry will specifically consider how these markets affect the digital visibility and competitiveness of smaller news organisations, including community and African language news media, and the diversity of news available to consumers.
The inquiry will focus on digital platforms, including search engines, social media sites, video-sharing platforms and, news aggregation platforms, and advertising technology market participants on the supply side, demand-side and exchanges.
In addition, the inquiry will also take a forward-looking approach and evaluate new technologies adopted by digital platforms, such as generative AI search support, such as ChatGPT and the impact these may have on the operations of businesses in the South African news media sector.
The inquiry will focus only on businesses in the South African news media sector, including news publishers and broadcasters.
Download our app and read this and other great stories on the move. Available for Android and iOS.