South Africa ready to launch major investigation into Google, Facebook, and ChatGPT
The Competition Commission published final terms of reference for its inquiry into imbalances and competition issues in the media and digital platforms market.
Its enquiry will look into disparities between South African media publishers and large platforms like Apple, Facebook, and Google.
According to the commission, the issue is that large search and social media platforms are funded through advertising revenue driven by traffic, engagement, and data collection.
However, a significant portion of the traffic and engagement comes from content produced by news publications, it said.
It should be noted that they also push traffic to the publications. Still, the commission said hidden algorithms create imbalances, making it difficult for publications to compete in the space.
“The growth of digital platforms in recent years has significantly impacted traditional news media organisations and their traditional revenue streams,” the Competition Commission said.
“The transition to digital news consumption and advertising has resulted in publishers seeing a massive decline in advertising revenue and an increase in costs, as newsrooms need to devote resources to their digital presence.
“The commission has reason to believe that there exist market features in digital platforms that distribute news media content which impede, distort or restrict competition,” it added.
The Competition Commission highlighted several of the imbalances between these large platforms and news publications:
- News publications face a barrier in the form of high costs to compete in the digital space and compete with players like Apple News, Facebook, and Google News, which they rely on to drive traffic.
- Apple News, Facebook, Google News, and others have become barriers to reaching readers while generating revenue through their user engagement.
- The platforms also use copyrighted content from publications to drive engagement.
- Readers have transitioned to reading news through the summaries posted on these platforms rather than navigating to the source. This restricts revenue for media publications while the platforms benefit.
It also noted that the lack of transparency regarding how the algorithms used by digital platforms work presents a challenge for publications to monitor the quality and effectiveness of their content and marketing endeavours.
“In addition, the lack of transparency on algorithms and any changes to the algorithms relating to display and referral links of news content may significantly impact on news business’ ability to operate,” the Competition Commission added.
“This situation is worsened by the lack of engagement by these companies.”
The terms of reference also note another concern regarding the imbalances resulting from the rise of artificial intelligence and large language models like ChatGPT.
Without permission, these large language models pull information from various sources, including news publishers.
Moreover, several search platforms have incorporated large language models, including Microsoft’s Bing and Google Search.
For reference, Google uses its own AI chatbot — Google Bard.
Publications’ copyrighted content is used without revenue as training data for these models.
The Competition Commission also noted that the information these models provide is often mixed up and inaccurate.
The scope of the inquiry will focus on the following:
- Interaction between publications and these digital platforms, as well as publications’ dependency on them;
- How this impacts the ability to monetise content;
- The implications for consumers;
- The sustainability of the news media sector; and,
- The ability to provide credible news content as a public good to consumers.
The inquiry will look into several platforms, including search engines like Google and Bing, social media sites like Facebook and X (formerly Twitter), news aggregators, video-sharing platforms, and generative artificial intelligence services.
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