South Africa’s Competition Commission Accuses Google of Unfair Practices in Media Revenue

The South African Competition Commission has accused Google of unfairly profiting from local news publishers, emphasizing its dominance in search and ‘zero-click’ searches. Google disputes these claims, maintaining its supportive role for publishers, yet the commission estimates significantly higher earnings for Google than reported. Recommendations for Google to pay local publishers and modify search features have emerged amid ongoing scrutiny of tech companies.

The South African Competition Commission has increased its scrutiny of major technology companies, particularly focusing on Google. After a 16-month investigation, the commission has accused Google of unfairly taking a substantial portion of revenue from local news publishers, further intensifying challenges for an already vulnerable media sector. This scrutiny is aimed at holding tech companies accountable for their influence on local industries.

A significant issue at hand is Google’s dominance in search functionality, particularly characterized by “zero-click” searches. These searches allow users to obtain necessary information directly from Google’s search results page without visiting the actual news websites. The commission argues that this practice has detrimentally reduced web traffic and advertising revenue for media houses, while Google continues to benefit.

In response to these allegations, Google firmly disputes the claims made by the commission. The company asserts that it contributes positively to publishers by directing traffic to their websites and investing in various tools and training initiatives. Google claims that its platforms generated approximately R350 million (around $18 million) in referral traffic for South African publishers in 2023, while its profit from ads related to news searches was reported at less than R19 million ($1 million).

The commission, however, remains skeptical of Google’s assessment. It estimates that Google’s revenue from news-related searches could be significantly higher, ranging from R800 million to R900 million ($42 million–$47 million). As a corrective action, the commission recommends that Google annually pay R500 million ($26 million) to local publishers and adjust its search features to enhance traffic to news websites.

In support of the commission’s recommendations, Khusela Sangoni Diko, Chairperson of the Portfolio Committee on Communication and Digital Technologies, emphasizes the necessity of these proposals. She believes that they could catalyze vital reforms, including a new media policy mandating digital platforms like Google and YouTube to compensate news publishers for benefiting from their content.

At present, Google has stated that it is in the process of reviewing the commission’s findings prior to issuing a comprehensive response. Nevertheless, one clear aspect is that the ongoing dispute is far from resolution, as discussions and actions regarding the matter continue to evolve.

The South African Competition Commission has raised significant concerns regarding Google’s practices affecting local news publishers. Despite Google’s assertions of support and involvement, the commission estimates a much higher income from news searches than reported. Recommended corrective measures and increased compensation for publishers highlight the ongoing tension between major tech companies and the local media industry. The engagement of government officials further underscores the potential for reforms in the digital media landscape.

Original Source: www.techinafrica.com