JOHANNESBURG (Reuters) – Google could be required to pay up to 500 million rand ($27.29 million) a year in compensation to South African media outlets after the country’s competition watchdog found the tech giant guilty of anti-competitive practices, while Meta and X also face fines.
In provisional findings from a probe into market activities, released on Monday, South Africa’s Competition Commission said that Google’s algorithm distorts competition between news media organisations insofar as it overrepresents global news media in South Africa for search and top stories and underrepresents local language and community media.
“This inequity has materially contributed to the erosion of the media in South Africa over the past 14 years and will continue to do so unless remedied,” the watchdog’s report said.
To remedy this, it recommended that Google compensate the South African news media by 300 million to 500 million rand annually for a three to five-year period, “whilst putting in place changes to search that will sustainably create shared value with the media through increases in referral traffic.”
The watchdog will publish a final report later this year, with all parties concerned given until April 7 to submit evidence to support their case.
Google said that it will review the report in detail but disagreed with the claim that it has taken disproportionate value from publishers.
“In 2023, our products like Google Search and News generated an estimated 350 million rand in referral traffic value for South African publishers while we earned less than 19 million rand from ads displayed next to news queries,” Google said in a statement.
“Alongside this, we have invested in products, training and partnerships to support publishers and the broader news ecosystem, and will continue to do so.”
On social media companies, the Competition Commission recommended Meta-owned Facebook and X stop “deprioritising South Africa news media posts with links” in the home feed, For You and Lastestfeed algorithm and restore referral traffic to the media.
It wants Meta and Google’s YouTube to improve the ability of news media to monetize their content on these platforms through increases in revenue share.
If all these companies fail to implement these remedies within six months after the final report, a 5-10% digital advertising tariff or levy will be imposed, according to the report.
Meta was not immediately available for comment.
The remedies only apply to the South African operations of these companies, the Commission said.
($1 = 18.3215 rand)
(Reporting by Nqobile Dludla; Editing by Susan Fenton)
