The Competition Commission has published the draft terms of reference for the Media and Digital Platforms Market Inquiry based on its opinion that digital media platforms that distribute news media content may have market features that hinder, distort, or limit competition and have adverse implications for the news. the media sector in South Africa.
The commission said this imbalance could have implications for fair payment for content and the sustainability of independent journalism.
The Media and Digital Platforms Market Inquiry (MDPMI) was established under section 43B (1) (a) of the Competition Act and according to the commission is supported by the value of a properly funded press to develop a well-functioning democracy. which includes a variety of views from small media businesses and media owned by historically disadvantaged people.
The study will assess and determine the nature and extent to which digital platforms affect the news media sector in South Africa and will focus on:
- The interaction and dependence of South African news media businesses on relevant digital platforms as intermediaries, distributors and links to online users to distribute news content online.
- The impact is on news media businesses to collect, display, create and monetize news content online.
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Focus on leading digital platform, AI, Chat GPT
The commission said the investigation will focus on major digital platforms which will include search engines, social media sites, video sharing platforms and news aggregation platforms. It also evaluates new technologies, such as generative artificial intelligence (AI) search support, such as ChatGPT and the importance of this in business operations in the local news media sector.
The inquiry follows a series of global inquiries and investigations led by competition authorities into the impact of digital platforms on news media publishers who use these platforms to distribute content online, including generating advertising revenue and the ability of news media to provide quality news. content for the benefit of consumers and democracy.
Global inquiries and 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 can create an imbalance in the trade relationship between news media and digital platforms.
The Commission said that many countries have adopted measures to reduce competition and consumer problems due to the impact of digital platforms on news media, especially in terms of adoption and creating a fairer bargaining relationship between digital platforms and news media businesses.
These measures include access for news media businesses to consumer data collected by digital platforms related to online content and notification of significant changes in digital platform algorithms that affect the distribution of news media business content.
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The shift in consumption of digital news sources
A similar trend is seen in South Africa with the shift in consumption of digital news sources due to the increased adoption and use of smartphones and more affordable access to the Internet.
The commission said that the distribution of news content through digital platforms such as search engines, social media, video sharing platforms and news aggregation sites or applications has become an effective way for news media businesses to reach consumers, but this creates greater dependence on these platforms. over time.
Changes in consumer behavior and distribution affect the costs and profits of the South African news media business, while it causes the loss of traditional advertising and print advertising revenue, as well as additional costs in providing digital news feeds and ensuring visibility on these digital platforms.
Although the digital advertising revenue is increased and there is potential for content revenue aggregator, the features of the digital platform market can affect the size of the revenue streams and the question will consider this.
Members of the public and stakeholders can submit written submissions on the proposed terms of reference and send them to Noluthando Jokazi at mdpmi@compcom.co.za at 4pm on 20 April 2023.
The draft terms of reference are 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 commence 20 working days after the publication of the final terms of reference.