CompCom to probe adtech markets in digital media inquiry

The Competition Commission has gazetted the final terms of reference for an inquiry into media and digital platforms and the advertising technology (adtech) markets that connect buyers and sellers of digital ads.

The commission believes features on digital platforms that distribute news media content, and associated adtech markets, may “impede, distort or restrict competition and may have adverse implications for the news media sector of South Africa”.

Global investigations have found that large digital platforms such as search engines and social media sites are important gateways for news content to reach consumers. But this could create an imbalance in the trading relationship between the news media and digital platforms that has implications for the level of referral traffic and fair payment for content.

Collectively, this may affect the sustainability of independent journalism, according to the commission.

In the same vein, the Competition Commission’s principles are intended to help design public policy that obliges digital platforms and news publishers to engage with each other and develop fair economic terms.

It said the principles “recognise freedom of expression as a foundational human right underpinning democracy and support public interest journalism as a public good that should be available to all. Any mechanisms pertaining to the principles must therefore be founded on the same commitment.”

There have been probes into adtech platforms in a number of other countries.

CompCom not the first

In Canada, for instance, to comply with the Online News Act, Meta Platforms has stopped news availability on Facebook in Canada. Since August, news links and content posted by news publishers and broadcasters in Canada can no longer be viewed by Canadians.

Meta has said the “legislation is based on the incorrect premise that Meta benefits unfairly from news content shared on our platforms, when the reverse is true. News outlets voluntarily share content on Facebook and Instagram to expand their audiences and help their bottom line. In contrast, we know the people using our platforms don’t come to us for news.”

In 2020, the Australian government directed its competition regulator to conduct a five-year inquiry into markets for the supply of digital platform services, with reports to be provided to the treasurer every six months.

The Australian Competition and Consumer Commission has published regular interim reports with an in-depth focus on online private messaging services, app stores, the use of web browsers and search services, and general online retail marketplaces. It found in its inquiry that many digital platform markets are prone to the accumulation of substantial market power, which, once attained, can readily become entrenched.

South Africa may be seeing a similar trend because of the growing shift to digital news due to the increasing adoption and use of smartphones and more affordable access to the internet.

The distribution of news content over digital platforms has become an effective way for news media businesses to reach consumers, which has created a reliance on these platforms.

Commission to probe South Africa’s digital media sector

The commission said the change in consumer behaviour has impacted revenues for South African news media businesses. There has been a loss in traditional classifieds and print advertising revenue, while digital advertising revenue has increased.

The inquiry intends to consider the revenue share on video-sharing sites for broadcasters, including the SABC, and how these markets impact the digital visibility and competitiveness of smaller news organisations.

The main digital platforms that the inquiry will focus on are search engines, social media sites, video-sharing platforms, news aggregation platforms, and adtech companies and exchanges. The inquiry will also evaluate new technologies adopted by digital platforms, including generative artificial intelligence (ChatGPT, for example), and the impact these may have on the South African news media.  – © 2023 NewsCentral Media

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