South Africa Fines Google R500 Million and Investigates Tech Giants Over Advertising Imbalance

South Africa’s Competition Commission has launched an investigation into major tech companies, including Google, X, and Meta, for their role in the imbalance of advertising revenue within the country’s digital media market. As part of the investigation, Google has been fined between R300 million and R500 million annually for five years, a provisional measure to compensate local media outlets across television, radio, and online platforms. The commission’s inquiry, which has been ongoing for 16 months, aims to address the issues stemming from unfair competition in the media and digital advertising sectors.

The investigation found that Google, Meta, and X have created an environment where local news media struggles to compete for advertising revenue. The Commission has warned these companies that if they do not cooperate with the proposed remedies, it will seek a 5-10 percent levy on these tech giants to compensate the local media industry. Additionally, the Commission is demanding that Meta halt its practice of de-prioritizing news on Facebook, which it claims has significantly reduced referral traffic to media outlets.

In its recommendations, the Competition Commission also called for significant changes in how Google operates, specifically asking the company to remove search bias that favors foreign media and YouTube. It urged Google to redirect some of the value generated from news content back into the local media sector, recommending a payment of up to R500 million annually. The inquiry revealed that Google benefits from South African news content to the tune of R800 million to R900 million a year, while local media loses between R300 million and R500 million annually due to the imbalance.

The Commission’s inquiry was initiated to assess whether digital platforms distributing news content are impeding competition or violating the constitutional rights associated with freedom of expression. The Commission emphasized the importance of a robust media sector in promoting democratic rights and freedoms. In addition to recommendations for tech companies, the report also suggested amendments to South Africa’s Electronic Communications and Transactions Act, calling for platform liability for the amplification of misinformation and recommending partnerships between social media companies and media organizations to tackle fact-checking efforts.

SOURCE: THIS DAY