Google agrees to pay SA media houses R688m

Tech giant Google has agreed to pay SA’s traditional media houses more than R680m as part of a settlement with competition authorities over lost revenues in the industry.

The Competition Commission’s media and digital platforms market inquiry is seen as a step forward in the push to balance the scales and support local media owners relegated to the fringes by the unchecked rise of US tech giants.

The commission said it had agreed to a R688m “media support package” with Google and YouTube, which will fund national, community and vernacular media through a combination of content licensing, innovation grants and capacity-building initiatives.

Earlier in the year, the competition body recommended that Google should compensate media houses with R300m-R500m annually for a three- to five-year period. Media houses’ revenue has dried up over the past decade due to the rise of technology platforms and shifting consumer behaviour.

The inquiry, initiated in October 2023, was designed to examine the effects of digital platforms such as X, Facebook and Google on the distribution and monetisation of media content and whether they used anticompetitive or harmful practices that needed to be addressed.

Veteran SA media practitioner Paula Fray thinks Google’s support package “is a significant step in the right direction and should be seen as part of a broader set of measures rather than a complete solution”.

She told Business Day that “the sustainability of SA’s media requires long-term structural change, not only funding”.

Platform dominance

The inquiry found that major platforms such as Google, Meta, Microsoft, TikTok, X and AI companies such as OpenAI dominate gateways through which South Africans access information, namely search, social media and AI-powered tools.

In search, Google maintains a dominant position, where news represents 5%-10% of queries and drives user engagement that is monetised through commercial advertising.

James Hodge, chief economist at the commission and chair of the inquiry, noted that Google does, however, not compensate SA media for the news content it displays or summarises.

He said referral traffic to media websites has declined sharply as users increasingly consume AI-generated summaries or remain on Google’s own platforms. Furthermore, Google’s algorithmic structure tends to favour large foreign outlets over local or vernacular media, deepening inequality in content visibility and advertising reach.

Hodge said Microsoft exhibits a similar foreign bias through its MSN service, which contracts relatively few SA publishers.

Ongoing challenges

Fray noted that much work still needs to be done to address other issues associated with digital news.

“One of the questions raised consistently throughout the inquiry was whether enough was being done to prevent the spread of misinformation, and certainly there’s a huge challenge, given the flood of misinformation that has even been exacerbated by AI.

“When it comes to content moderation, we looked at various issues and there was actually extensive consultation and engagement around the issue, with some really good input coming from media organisations.

“But a number of media organisations warned against establishing platform liability because this might have the unintended consequence of stifling free speech.”

She said there was a lot of support for an ombud model on this.