South Africa’s competition watchdog goes after Big Tech

South Africa has started a probe to gauge if artificial intelligence models in digital and social media platforms managed by companies, including Google and Facebook, are limiting the nation’s news and media companies’ ability to generate revenue. 

Big tech firms dominate the digital advertisement markets, limiting local news companies’ ability to generate revenue from online content, forming the basis of the inquiry by South Africa’s Competition Commission over the next 15 months.

Africa’s most-developed economy joins Canada, Europe and Australia, looking to the feasibility of diverting some advertising revenue to the local media industry.

The probe will be led by James Hodge, chief economist and acting deputy commissioner of the regulator.

“The inquiry comes at a critical moment for the media industry as news consumption rapidly shifts online and traditional sources of funding to print and broadcasting advertising decline,” Commissioner Doris Tshepe said in a statement.

The probe will also involve understanding the digital markets in-depth, and whether there are remuneration models that are appropriate, Hodge said in response to Bloomberg’s questions.

“There may be more of a question of whether any compensation is worth it or not,” Hodge said.

South Africa’s antitrust body has been clamping down on big tech and online platforms in recent investigations, including looking at Google’s dominance in the market. 

Google is participating in this market inquiry, the company said in an emailed response. “We are having constructive engagements with the South African news industry and will continue to support the news ecosystem with access to technology, tools and training.”

Policymakers around the world have been introducing laws to govern the relationship between big tech and the news industry.

The European Union’s digital copyright directive and Australia’s news media bargaining code – both recently established – force digital platforms to pay for the news they use. 

In Canada, tech firms have said they will retaliate against the legislative enforcement – asking them to pay news organizations – by threatening to block Canadian news from their platforms.


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