South Africa: Competition Commission publishes final terms of reference on market inquiry into digital platforms
The Competition Commission (the Commission) has published the final Terms of Reference for a market inquiry into the distribution of media content on digital platforms. The “Media and Digital Platforms Market Inquiry” (MDPMI), which will be initiated in accordance with section 43B(1)(a) of the Competition Act 89 of 1998 (as amended), will assess whether and the extent to which certain market features in digital platforms distributing news media content hinder, distort, or limit competition and undermine the objectives of the Act.
The MDPMI will primarily focus on analysing the ways in which the dependency of news publishers on digital platforms may stifle the public interest and business activities of news media organisations. This includes evaluating the interdependency of South African news media organisations on digital platforms as intermediaries for news content dissemination and advertising inventory sales; assessing whether market features distort competition in areas such as advertising revenue and consumer data; determining whether competition for the distribution, display, and monetisation of news content online is influenced by market features; and assessing the impact of the integration of generative AI systems into relevant digital platforms.
The digital platforms under scrutiny include:
- search engines,
- social media sites,
- news aggregator sites,
- video-sharing platforms,
- generative AI services such as ChatGPT, Bing Chat, and Bard,
- Ad Tech stack companies on the Supply Side, Demand Side, and Ad Exchanges, and
- other platforms identified in the inquiry process.
The initiation of the MDPMI follows the Online Intermediation Platforms Market Inquiry (OIPMI), which was launched in February 2021 and published its Final Report in July 2023. The Final Report of the OIPMI indicated that news publishers’ concerns over the use of copyrighted material by search and social media companies as well as concentration within the adtech stack would be the subject of another, future inquiry.
The MDPMI also follows significant attention in several countries around the world placed on the issue of the sustainability of public interest news and the use of competition and regulatory mechanisms to regulate the relationship between major technology platforms and news media, particularly with regard to compensation. This includes, for example, the passage of the News Media Bargaining Code in Australia in 2021 and the Canadian Online News Act in 2023.
The MDPMI’s draft Terms of Reference were originally made public on 17 March 2023 and attracted comments from several parties. The final Terms of Reference will guide the scope of the inquiry, which will take place between September 2023 and January 2025, the predicted publication date of the inquiry’s final report. The administrative table sets out further details on the timeframes according to which the MDMPI will take place. It provides that the MDPMI is set to commence within 20 business days after the publication of the final Terms of Reference and that the final report will be completed within 18 months, in compliance with statutory requirements as outlined in sections 43B(2) and 43B(4)(a) of the Act, respectively. The Commission has also provided guidelines for participation.
- The final terms of reference are accessible here.