In February 2025, the Competition Commission published the provisional report in its media and digital platforms market inquiry. This inquiry focused on various aspects of digital media, though one stood out: the sustainability of news media.
The commission worries that digital platforms – like Google and Meta’s Facebook – threaten news media outlets, which suffer from declining revenues from print and traditional advertising.
With Google and Meta’s supposed dominance in online advertising and news distribution, this is said to severely impact publishers’ financial viability, especially for small, local and non-English outlets.
These platforms control news visibility through algorithms, often prioritising engagement over quality journalism, which reduces publishers’ traffic and ad income.
Limited “bargaining power” is also said to force publishers into unfavourable revenue-sharing terms, exacerbating the financial strain. To the commission, this risks reducing media diversity and weakening democratic discourse.
The commission highlighted Google’s near monopoly in search and Meta’s social media influence as key drivers of these imbalances.
Commission’s recommendations
The solution, in the commission’s view, includes Google “compensating” for “at least 3-5 years” South African news media – and the commission specifically mentions the tax-funded SABC – for the value it has “extracted” from them. This compensation must take “media diversity and pluralism” into account.
Google must also change its algorithmic design to ensure South African news media is prioritised – for example by “removing bias against South African media in favour of foreign media”.
Google must additionally up its offering and provide publishers with “enhanced user data and insights”. It has to provide “dedicated search engine optimisation support” – in effect, free consulting services.
Read: Google: South African media plan threatens investment
The “overrepresentation” of YouTube videos ostensibly at the expense of traditional mainstream media on Google are also to be addressed.
Google and Microsoft should begin funding the Press Council and Broadcasting Complaints Commission of South Africa, and they should also “support” a programme to “educate” publishers on how to adapt to new AI technologies.
Let me stop there. The rest is just as absurd.
The Brussels effect
The South African government is well known to be overzealous in regulation, interfering in matters that do not concern it. This is not new. However, the manifestation of the “Brussels effect” in this case – like many others – is of particular interest.
Should the commission’s recommendations be adopted into law and policy – for example, either enforced as binding “recommendations” or drafted into the Copyright Amendment Bill – what will in effect happen is that South Africa will domesticate certain features of the EU’s Copyright Directive of 2019.
The Copyright Directive introduces the phenomenon of a “neighbouring right” into EU law for the benefit of news media publishers. This “right” is meant to address the “imbalance” between publishers with “weaker” bargaining power than digital platforms, entitling them to claim money from the platforms for use of their publications (for example, the display of their links).
Sound familiar?
This is one of the many cases in which South Africa and many developing countries try to mimic EU regulation, usually to the eternal detriment of their economies. The Brussels effect refers to a race to the bottom whereby, first, international firms, and later national regulators, adapt their internal rules and laws to reflect Europe’s.
For firms, this is done to retain access to European markets. But for regulators in countries like South Africa, it is an act of mimicry whereby they look for the most effective means by which to attain control over society.
Asia unleashes its economies to produce at scale, and America’s laissez-faire attitude encourages innovation. Europe prioritises “safety”, control and managed decline, which is also the approach of the South African political elite.
Evident problems
There are evident problems in this approach by the EU and South Africa, but foremost among them is this: digital platforms provide a massive – free! – boost to news media.
Any news publication tends to be automatically listed on Google, and is indexed on Meta, which means that orders of magnitude more people are exposed to that publication’s content. Take away Google, Meta or any other platform, and in all likelihood that publication suffers.
This relationship is entirely voluntary. No digital platform forces any news media company to be hosted on that platform. Any news media institution could instruct the platforms to exclude links to their website entirely if they wanted to, thus eliminating the risk that Google or Meta might benefit from advertising revenue.
Of course, news media houses are arguing that it is necessary for them to be visible on these platforms. They enjoy and welcome the – again, free! – exposure that Google and Meta grant them, but they resent the fact that Google and Meta also benefit from the relationship.
Imagine!
Imagine that you own a house with a yard overlooking an important public square. It is your property, and about this there can be and is no dispute.
One day you decide to build a deck on the premises and, of your own free will, open the deck to public passersby to see the public square. You even offer various – free! – services to anyone you find sitting on your deck.
So gracious are you that you allow people to erect banners that are visible from the busy square below. You do not charge them a cent to do this, but you do ask them for a small share of the money that they make – not from their general business, but only from the use of your deck.
Over time, the people using your deck for their economic activities begin to realise that most of their business now comes from people in the square seeing their banners on your deck. And now, with an arrogance bordering on disgusting, they begin to resent the fact that you are also receiving some of the proceeds.
They could, of course, leave your deck and keep all their money and try something else, but no: they really like your deck and the benefits it grants their business, so they want to stay.
And as a result of these grievances and resentments they are developing against you, they ask the state to force — no, to coerce — you not only to reduce the money you are making, but to give these businesses more prominence on your deck.
As a result of your own initiative to purchase and invest in your property and then to grant – free! – access to anyone who might come across it, all while giving their businesses big advantages, you are being rewarded with a soft form of nationalisation. Your deck is no longer your own, but ultimately public (that is, government-owned) property, for which you must shoulder the liabilities.
Choose freedom
This is, in effect, what the EU’s Copyright Directive and the Competition Commission’s provisional market inquiry recommendations boil down to.
That many are saying this kind of interference discourages innovation, experimentation and openness in the digital world is unsurprising. I know that if I were ever inclined to invest in building my own digital platform, I would avoid granting open public access in the worry that one day my creation might also be snatched from my hands.
Read: Google rejects claims it exploits South African news media
The wonders of digital innovation have truly changed humanity for the better – especially in commerce, but also in human development. This is something to be excited and optimistic about, but some choose to stew in resentment rather than embrace it.
Economic freedom – letting producers, entrepreneurs, innovators and risk-takers engage freely in economic activity – is a phenomenon under siege that we will greatly miss once it is gone.
South Africa should put liberty first and engage in wholesale deregulation to spur growth and development to guarantee prosperity. This includes the Competition Commission ceasing to try to apply the sort of developed-world regulatory burdens that the EU so loves.
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- The author, Martin van Staden, is head of policy at the Free Market Foundation and South African policy fellow at the international Consumer Choice Center
