Google should pay South African media houses between R300 to 500 million annually over 3-5 years to address lost revenue and the imbalance in shared value.

These were the findings of the Competition Commission's Media and Digital Platforms Market Inquiry (MDPMI) provisional report, which was released on Monday.

The report called for action against search engines like Google and social media sites like Meta.

The MDPMI was created and empowered by the Commission to establish an inquiry to investigate if there are features that may prevent and impede competition in the South African media landscape.

Google needs to pay!

Paula Fray, a panel member at the commission explained search engines like Google play a major role in helping and hurting South African media organisations.

She explained that Google receives between R800 to R900 million from South African news content.

The search engine, however, destroys around R160 to R200 million in potential value for South African media.

“Our assessment is that the imbalance in the share of total value is around R300 to R500 million annually,” Fray said.

The inquiry also found that there is a definite bias in Google’s algorithm, and this disadvantages South African media organisations in favour of international news outlets.

The role of social media

The MDPMI found that a majority of South Africans use social media as their primary news source.

The report found that platforms like X, TikTok, Meta, and YouTube drive news consumption in the country.

Fray said that Meta and X have deprioritised South African posts with links and this reduces referral traffic.

The report also found that South African news outlets are struggling to monetise views on YouTube in particular.

R300-500 million in compensation

James Hodge, the MDPMI chairperson said that South Africa needs to impose a 5-10% digital levy or tariff on social media and AI companies to compensate SA media for their loss in revenue.

He said that search engines need to also restore referral traffic.

Google needs to adjust search algorithms to support SA news media and reduce bias toward foreign platforms, Hodge explained.

These search engines also need to help support monetisation.

He said that Google for example needs to share anonymised user data and provide SEO assistance.

In terms of direct compensation, Hodge said that Google should pay SA media houses between R300 to 500 million annually over 3-5 years to address lost revenue and the imbalance in shared value.

He also added that Meta needs to stop deprioritising news on the Facebook feed to restore referral traffic to the media from its peak with at least a 100% increase in referral traffic.

It is important that Meta and X also stop deprioritising news posts with links in the user feed.

Lastly, Hodge said that YouTube needs to improve the ability of the media and broadcasters, including the SABC, to monetise their content on its platform through increases in the revenue share to 70% and active promotion of higher value direct sales by the media.

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