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A provisional report from South Africa’s Competition Commission warns that major tech platforms are undermining the sustainability of local news media.

The Media and Digital Platforms Market Inquiry (MDPMI) investigation highlights significant bargaining power imbalances between news organizations and tech giants like Google and Meta, resulting in declining revenues across traditional media.

Key Findings

The report identifies several concerning trends:

• Unequal Bargaining Power: Publishers have little leverage when negotiating with platforms that control audience access
• Revenue Decline: Digital advertising shifts have dramatically reduced funding for quality journalism
• Platform Dominance: The inquiry examined how search engines, social media, advertising technology, and artificial intelligence may undermine media competition

Proposed Solutions

The Commission suggests several potential remedies:

• Mandatory negotiation frameworks with binding arbitration
• Revenue sharing requirements for news content
• Transparency obligations for content ranking and monetization
• Data sharing provisions to help publishers optimize distribution

The Competition Commission is seeking stakeholder feedback before issuing final recommendations aimed at ensuring a fairer value exchange and promoting a diverse media ecosystem that supports journalism.

South Africa’s news media landscape faces significant challenges from the growing dominance of major tech companies, according to a provisional report released by the country’s Competition Commission.

The Media and Digital Platforms Market Inquiry (MDPMI), established to investigate the complex relationship between digital platforms and local news organizations, has unveiled findings that point to concerning power imbalances that threaten the sustainability of journalism in the nation.

Bargaining Power Imbalance

At the heart of the Commission’s investigation is the stark disparity in negotiating power between news publishers and tech giants like Google and Meta. These platforms have become essential distribution channels for news content, yet publishers have little leverage when it comes to negotiating fair compensation for their work.

“News publishers find themselves in an impossible position,” the report states. “They cannot afford to withdraw from these platforms due to their enormous audience reach, yet they cannot secure equitable terms for the value their content creates.”

This power imbalance has contributed to a steady decline in advertising revenues for traditional news organizations, as digital platforms capture an increasingly large share of the advertising market.

Key Findings Across Digital Ecosystems

The Commission’s provisional report examines four key digital ecosystems and their impact on news media:

Search Engines

The inquiry found that search engines, particularly market leader Google, serve as critical gateways to news content but often display substantial portions of articles in search results, potentially reducing the need for users to visit publisher websites. This practice, while convenient for users, may deprive publishers of vital page views and associated advertising revenue.

Social Media

Social platforms like Facebook and Instagram were found to benefit significantly from news content, which drives user engagement and time spent on these services. However, the algorithms controlling content distribution can change without warning, causing dramatic fluctuations in publisher traffic and revenue.

Advertising Technology

The report highlights concerns about the digital advertising ecosystem, where platforms often act as both marketplace operators and participants. This dual role raises questions about potential conflicts of interest and whether publishers receive fair value for the advertising space on their websites.

Artificial Intelligence

The emergence of AI technologies poses new challenges, with the report noting concerns about large language models being trained on published content without proper compensation or permission. This raises fundamental questions about intellectual property rights in the digital age.

Declining Revenues Threaten Quality Journalism

The Commission’s findings suggest that these combined factors have led to a significant weakening of South Africa’s news industry, with many organizations forced to cut staff, reduce coverage, or shut down entirely.

“The erosion of the economic foundation of journalism has far-reaching implications beyond the media industry itself,” notes the report. “A robust press is essential for democratic governance, public accountability, and informed citizenship.”

Proposed Remedies

While the report is provisional, it outlines several potential interventions aimed at addressing the identified concerns:

1. Mandatory Negotiation Frameworks: Establishing structured negotiation processes between platforms and publishers with binding arbitration mechanisms.
2. Revenue Sharing Requirements: Setting minimum standards for how platforms compensate news organizations for content.
3. Transparency Obligations: Requiring platforms to provide clear information about how news content is ranked, displayed, and monetized.
4. Data Sharing Provisions: Ensuring publishers have access to relevant data about how their content performs on platforms.
5. AI Content Usage Guidelines: Developing frameworks for fair compensation when news content is used to train AI systems.

Next Steps

The Competition Commission has invited stakeholders to provide feedback on its provisional findings before issuing final recommendations. The report emphasizes that interventions must be carefully calibrated to promote media plurality and sustainability while acknowledging the legitimate role that digital platforms play in the modern information ecosystem.

Industry observers note that South Africa’s approach mirrors similar initiatives in Australia, Canada, and the European Union, where regulators have increasingly sought to rebalance the relationship between tech platforms and news organizations.

As digital transformation continues to reshape the media landscape, the Commission’s final recommendations could play a crucial role in determining the future viability of independent journalism in South Africa.

In an era where digital platforms dominate information dissemination, South African publishers face unprecedented challenges that threaten their sustainability. A recent analysis highlights the critical issues confronting the industry while proposing potential pathways toward viability in this rapidly evolving landscape. – LISTEN

Fragmentation and Inefficiency in the Advertising Market

One of the core issues identified is the fragmented approach South African publishers take to the advertising market. Publishers have failed to present a unified value proposition to advertisers, which disproportionately harms smaller players. Advertisers struggle to engage efficiently with diverse local content providers, instead defaulting to international platforms that offer streamlined buying processes and scale.

This lack of aggregation imposes high transaction and operational costs, leaving smaller publishers at a competitive disadvantage. Without the ability for advertisers to easily purchase across multiple smaller publishers, many local outlets remain economically unviable.

Over-reliance on International Platforms

The analysis reveals an alarming over-dependence on Google for traffic acquisition, coupled with underinvestment in alternative audience development strategies. Publishers have neglected opportunities such as:

• Building direct subscriber databases
• Leveraging messaging platforms like WhatsApp
• Forming syndication partnerships
• Creating niche content networks
• Developing in-language SEO strategies beyond Google

The Value of Original Journalism

The strategic importance of original journalism cannot be overstated. Google’s search framework prioritizes original, authoritative content while penalizing repetitive or duplicated material. This creates a self-reinforcing cycle where smaller publishers relying on wire copy see declining traffic and revenue, making investment in original journalism increasingly difficult.

With the emergence of AI-powered search summaries, this challenge intensifies. AI systems prioritize uniqueness, depth, and relevance, potentially further marginalizing smaller sites with duplicated content in both attribution and traffic flow.

Regulatory Support vs. Market Reform

While regulatory interventions such as compensation mechanisms, levies, and a Media Industry Fund are deemed necessary in the short term to address platform-driven market failures, they alone cannot ensure long-term sustainability. The analysis cautions that without addressing critical structural issues, the effectiveness of regulatory support will diminish over time.

These structural issues include:

• Lack of advertising aggregation
• Insufficient differentiation in articulating unique value to advertisers
• Absence of a collective market strategy aligned with national objectives

Gaps in Implementation

The proposed support mechanisms, particularly the Media Industry Fund, lack crucial implementation and governance details. There is insufficient clarity regarding:

• Governance structures
• Eligibility criteria
• Equity considerations for local language and grassroots media
• Mechanisms for measurement and accountability

This lack of operational detail undermines the feasibility of the proposals.

Evolving Audience Behavior

A significant oversight in many analyses is the rapid evolution of audience behavior and content consumption patterns, particularly among younger South Africans. Traditional reading of news on dedicated sites is becoming generationally outdated, with Generation Z increasingly consuming news on platforms like TikTok, Instagram, WhatsApp, and YouTube in short, shareable, multimedia formats.

Media entities must invest in format innovation and tailor content to these emerging platforms. Interventions focusing solely on websites and traditional formats risk missing the generational shift in media consumption.

The Path Forward: Balancing Rights and Responsibilities

The South African Press Code provides a framework for ethical journalism that serves society while maintaining independence. It emphasizes that media freedom enables “independent scrutiny of the forces that shape society, and is essential to realizing the promise of democracy.”

The Code establishes clear guidelines for gathering and reporting news truthfully, maintaining independence, respecting privacy and dignity, protecting personal data, avoiding discrimination, and handling user-generated content responsibly.

Conclusion: A Multi-faceted Approach

The challenges facing South African publishers require a comprehensive response. While regulatory support may provide temporary relief, long-term sustainability depends on:

1. Market-led reforms and strategic collaboration among publishers
2. Focus on generating original, high-quality journalism
3. Adaptation to evolving audience consumption habits
4. Clear implementation plans for support mechanisms
5. Adherence to ethical standards as outlined in the Press Code

By addressing these interconnected challenges, South African media can work toward ensuring a vibrant, independent, and sustainable landscape that continues to serve the democratic needs of society.