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Competition Commission media and digital inquiry public hearings to start in March

9th February 2024

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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The Competition Commission is preparing to hold the first round of public hearings of its Media and Digital Platforms Market Inquiry (MDPMI).

The inquiry was officially launched in October after publishing the final terms of reference (ToRs) in September.

The MDPMI was initiated in terms of section 43B(1)(a) of the Competition Act No 89 of 1998, as amended, to investigate the distribution of media content on South Africa’s digital platforms, including search, social media and news aggregation platforms, and the advertising technology (Adtech) markets that connect buyers and sellers of digital advertising inventory.

From March 4 to 22, the commission will host the public hearings, led by MDPMI chairperson James Hodge and assisted by panel member veteran South African media practitioner Paula Fray and the technical team, and provide a platform for direct engagement between the inquiry panel, the technical team and stakeholders, in Pretoria.

The main digital platforms that the inquiry will focus on include search engines, such as Google Search and Microsoft Bing; social media sites, such as Meta; news aggregator sites and applications, such as Google News and Apple News; and video sharing platforms, such as YouTube and TikTok.

The inquiry will also examine Adtech market participants on the supply-side, demand-side, and Ad exchanges, as well as new technologies integrated into digital platforms, including generative artificial intelligence (AI) search support such as ChatGPT, and the impact these may have on the operations of businesses in the South African news media sector.

According to a statement issued by the Competition Commission, the MDPMI has gathered extensive information from a wide range of industry stakeholders from submissions made to the Statement of Issues (SOI), Further Statement of Issues (FSOI) and Requests for Information (RFI).

“The public hearings will present another opportunity for stakeholders to not only provide their perspective on some of the issues raised in the SOI, FSOI and aspects of the RFIs, but to also provide their views on submissions made by other stakeholders in response to the inquiry,” it said.

Stakeholders will also be able to highlight any issues, within the defined scope, not currently known to the inquiry.

“The hearings will enable the inquiry panel and technical team to engage directly with stakeholders in respect of their submissions around how these platform markets operate, the issues identified by the inquiry to date and any remedial actions stakeholders consider are necessary to address any issues identified in the SOI and FSOI.”

Hodge previously outlined that the inquiry has seven broad areas of focus, as set out in the ToRs and the SOI.

The first scope will evaluate the trends, adoption and use of the relevant digital platforms to aggregate and display news content online and the importance of digital revenue sources for news media organisations, while the second scope evaluates whether market features distort competition for advertising revenue, consumer data and subscription fees between news media organisations and the relevant digital platforms that display and distribute news media content as intermediaries to consumers, including news aggregators.

The panel further aims to probe whether there are any imbalances in the bargaining power in the commercial relationship between news media and relevant digital platforms and the impact of such imbalances on competitive outcomes affecting the news media industry, including pricing and non-price outcomes.

The fourth scope outlines an evaluation of whether competition for the distribution, display and monetisation of news content online between news media organisations through relevant digital platforms is distorted by market features, including ranking algorithms, paid results, search engine optimisation, consumer and social network preferences, besides others, and commercial relationships with news media organisations; and the effects of this on public access to credible news content as a public good.

In addition, the Competition Commission is investigating whether Adtech supply and demand side platforms and intermediary Ad exchanges used to surface digital advertising on websites or apps of the South African news media sector will impact on adoption and competition.

Scopes six and seven include probing whether the current and future integration of generative AI systems in relevant digital platforms, including the AI review and assimilation of news media content, will have an impact on adoption and competition, and evaluating the impact of the quality and consumer choice of South African news media, as well as the impact on small and medium- sized enterprises and historically disadvantaged persons-owned news media organisations.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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