The Competition Commission is mulling the creation of a fund that big global technology firms such as Meta Platforms and Google would contribute towards to provide financial support to under-pressure South African media houses.

This is one of the remedial actions the regulatory body is investigating as it heads into the next phase of its media and digital platforms market inquiry (MDPMI), the public hearings for which were held in March.

At the public hearings, presentations by the South African National Editor’s Forum (Sanef), Media24, Moneyweb and others painted a grim picture of the impact that Big Tech platforms are having on the local media landscape. The issue of fair remuneration for journalistic content was a recurring theme at the hearings.

“We are looking at how media businesses might be able to change their business models, if they can, and find new ways of generating revenue from their content. We are also trying to see how the likes of Google, Meta and the other platform operators could remunerate publications for their content,” said Noluthando Jokazi, senior analyst at the Competition Commission and case manager for the MDPMI, in an exclusive interview with TechCentral this week.

According to Jokazi, the commission is keeping the effects of remedial actions by regulators in other countries in mind as it considers what to implement in the local market.

In 2020, the Australian Competition and Consumer Commission drafted the News Media and Digital Platforms Bargaining Code (NMBC), which was subsequently written into legislation that same year. Under the NMBC, large tech platforms are required to pay local news publishers for the news content available on their platforms. Similar legislation, called the Online News Act, was passed in Canada in 2023.

Pooled fund

Jokazi said such legislation has proven to be beneficial in some ways, while also having unintended consequences. This perspective is supported by a report by the Media Freedom Coalition, which found that Australia’s NMBC was skewed in favour of larger media houses. In Australia, Google and Meta struck private remuneration deals with large publications. Smaller and newer publications, however, have found it difficult to make the legislation work in their favour.

To protect smaller publications from being sidelined, the Competition Commission is considering a pooled fund where media houses are paid based on website traffic as a possible solution. Jokazi said the commission is aware that such a solution might be open to abuse, but it will investigate this and how it might be better structured in the next phase of the inquiry.

Read: Media24 blasts Google – the Fourth Estate is ‘on its knees’

“Community newspapers and broadcasters are so important in South Africa, so we are trying to strike a balance where historically disadvantaged persons, community newspapers and smaller businesses can also benefit,” said Jokazi.

But it is not only smaller publications that are facing difficulties in South Africa. Moneyweb recently reported that Media24, South Africa’s largest media house, will shut down five of its print publications, possibly cutting around 400 jobs in the process. In his presentation to the Competition Commission’s public hearings in March, Media24 CEO Ishmet Davidson alleged that Google is sucking advertising revenue out of South Africa, making it increasingly difficult for local publications to survive.

The Competition Commission’s Noluthando Jokazi

“To survive, we have been forced to manage our costs as tightly as possible, with zero cost growth over the past seven years… Despite the cost interventions, 100 000 subscribers and 20 million monthly users, News24 is unprofitable,” he said of Media24’s largest publication.

“This is a clear indication that the business model is unsustainable and, coupled with our dying print business, is an extinction crisis for media in South Africa. The Fourth Estate is on its knees. Yes, one or two media companies may survive, but a democracy thrives on a plurality of voices,” said Davidson.

“After the public hearings, we realised that the situation is much more dire than we realised, and there were many more issues coming across as we probed the market,” said Jokazi.

Read: Big Tech must be held accountable for news content: Sanef

The next phase of the inquiry involves confidential in-camera sessions where the commission aims to use the private nature of the sessions to probe further into sensitive information such revenues generated and traffic volumes, for example.

“There are key takeaways from the public hearings that we would like to probe even further, especially regarding the feasibility of the remedial actions we are considering for community newspapers,” said Jokazi. – © 2024 NewsCentral Media