How much do Google, Facebook, and advertising technology (adtech) affect media organisations and publishers? Ask anyone in the media, and the answer is a lot.
You can see it in the falling revenues and advertising agencies always preferring programmatic advertising under the delusion such accuracy of targeting is real. You see it in the decline in the number of publications and media houses. You certainly see it in the loss of jobs in the media industry.
Now, the Competition Commission will investigate the impact of adtech having gazetted the final terms of reference for its Media and Digital Platforms Market Inquiry (MDPMI).
The inquiry is based on the “commission’s view that there may exist market features in digital platforms that distribute news media content, and associated Adtech markets, that impede, distort, or restrict competition and which may have adverse implications for the news media sector of South Africa,” it said in a statement last week.
This comes as the world over Big Tech’s power is being scrutinised. The European Union has fined US firms record amounts for how they have mishandled personal data and is aggressively updating legislation for a new digital era.
Read more: The EU’s Digital Services Act will make the internet a safer place
Google is currently being sued by the US Department of Justice for its 91% monopoly of online search.
The Competition Commission says the “distribution of news content over digital platforms (such as search engines, social media, video-sharing platforms, and news aggregation sites/apps) has become an effective way in which news media businesses can reach consumers, which has created greater reliance on these platforms over time”.
But this change in consumer behaviour and distribution model has “impacted the cost and revenue of South African news media businesses. There has been a loss of traditional classifieds and print advertising revenue, as well as additional costs in providing digital news feeds and ensuring visibility on these digital platforms.”
The commission will investigate “aggregator content revenues” and the impact on “digital visibility and competitiveness of smaller news organisations, including community and African language news media, and the diversity of news available to consumers”.
The inquiry’s primary focus will be on “search engines, social media sites, video-sharing platforms, and news aggregation platforms, along with adtech market participants”.
Read more: Google scored “billions” for video ads nobody watched
It will also consider the impact of new technologies, such as generative artificial intelligence (AI) like ChatGPT, may have on the South African news media sector, including broadcasters.
Read more: Unicorn OpenAI will make another $1 billion in revenue
Google has already been found to “distort platform competition” by the Competition Commission’s Online Intermediation Platforms Market Inquiry. “Google has an influence on platform competition because it is where most online journeys start,” says commission chair James Hodge.
He says Google gives “prominence to paid results, which means that the largest platforms with the biggest marketing budgets can dominate [its] search page” while it “self-preferences” its own shopping and travel units on its search results page.
“The inquiry finds that Google search’s dominance and business model distort platform competition, as small and new platforms struggle for visibility and customer acquisition.
“Google search is a critical gateway to consumers for all platform categories, and its business model of paid search alongside free results favours large established platforms.”