By Tyla Lee Coertzen
As we reported in a previous update (see here), the South African Competition Commission (“SACC”) announced and published its draft Terms of Reference (“ToR”) underlying the Media and Digital Platforms Market Inquiry (“MDPMI”), initiated in terms of section 43B(1)(a) of the South African Competition Act 89 of 1998 (as amended) (the “Act”). Following public comments and written submissions from relevant stakeholders, the SACC finalised its ToR on 15 September 2023 and, on 17 October 2023, released its Statement of Issues (“SoI”).
The MDPMI is set to focus on any market features which impede, restrict or distort competition and/or undermine the Act. Specifically, the SoI notes that the MDPMI will investigate the following areas of competition and public interest in the market:
- “Market features that may distort competition for advertising revenue between news media organisations and digital platforms, and whether these are affected by imbalances in bargaining power.”
- “Market features of those digital platforms that may distort competition amongst news media organisations for online distribution and advertising revenue.”
- “The impact of generative AI tools of digital platforms on the above.”
- “Market features of ad tech that may distort competition, affecting the level, price and share of advertising revenue to news media organisations.”
- “The impact of the above on the quality and choice of news content to consumers, and on SME and HDP owned news organisations.”
Market players and stakeholders have further been invited to provide comments and information in relation to the SoI itself as well as the operation of the market in general. In this regard, the SACC is open to receiving comments from media publishers, digital platforms, academic think tanks, regulators, government departments, affected parties and any other relevant stakeholder. Such comments should be provided by 14 November 2023. The SoI further details the platforms to be covered by the market inquiry as follows:
- Search engines;
- Social media sites;
- News aggregator sites and/or applications;
- Video sharing platforms;
- Generative AI services;
- Ad Tech stack companies on the supply side, demand side and ad exchanges; and
- Any other relevant platforms identified throughout the inquiry.
A brief summary of the pertinent issues identified by the SACC thus far are canvassed below:
- Competition amongst news media platforms
The MDPMI will look to investigate how news media is distributed and consumed by end-users through online channels and the evolution thereof (with a common trend of media being consumed via audio and video on online platforms).
- Revenue services for news media platforms
The SACC will look to understand how news media platforms are funded and how such funding is set to evolve within the digital era.
- Ad tech stack trends
There is an increased reliance on digital services and the internet which has affected the traditional advertising methods, where advertisers compete for user attention. Digital advertising has become a crucial tool for target audiences. The SACC will look to understand tech companies’ position in this regard, with many such as Google and Meta consolidating their positions. Undoubtedly, the SACC will look to understand the position of smaller players in this regard.
The SoI also provides the dates over which the public hearings in respect of the MDPMI are set to take place, namely 2-24 March 2024. With the public hearings for the Fresh Produce Market Inquiry currently underway, stakeholders might find a good example from these public hearings as to how the SACC operates its market inquiries as well as the kind of issues it intends to address, specifically those related to public interest issues.
The SACC is mandated to conclude the MDPMI 18 months from the release date of the SoI and is set to release its final findings and recommendations in January 2025.
Primerio Director, Michael-James Currie, notes: “While several jurisdictions have similarly considered market studies into this sector, South Africa’s differing standards and express focus on public interest initiatives means the South African Competition Commission will look at the media and digital platforms market through a different lens. As we saw from the recommendations in the Online Intermediation Platform market inquiry, the remedies imposed had very little to do with addressing competition issues but primarily focused on assisting smaller firms participate in the market.”