Algorithm Repair Required: $27 Million Fine Looming
The South African Competition Commission has fined Google for harming local media companies through practices that go against fair competition. The Media and Digital Platforms Market Investigation (MDPMI) report, prepared over 16 months, advised Google to pay between 300 to 500 million Rand (approximately $16 million to $27 million) to local news organizations, with payments to continue for 3 to 5 years. The Commission found that Google’s dominance in representing global news media in South Africa has disrupted competition among local news organizations, leading to inadequate representation of local language and community media.
The Commission estimated that Google’s algorithm changes caused a revenue loss of 8 to 11 million dollars for local news content in South Africa. The majority of South Africans rely on social media as their primary news source, emphasizing the need to restore the priority of local media content to support their revenues.
In addition to Google, the Commission instructed other tech giants such as X, Youtube, Tiktok, and Meta to halt practices detrimental to local news. Suggestions were made for these companies to support local media by allocating 5-10 percent of their earnings or adjusting algorithms to boost support for South African news media.
The issue of copyright for news content is also under discussion, with efforts to ensure fair compensation for news producers. Members of the Parliamentary Digital Casuals Commission in Turkey are working towards digital taxation and fair competition to address similar challenges faced by global platforms and local media ecosystems.
Google has faced fines in several countries for causing advertising revenue losses for local media, showcasing a trend of increasing scrutiny on tech giants’ impact on media industries. Cases in countries such as Spain, France, and Canada have led to significant penalties and agreements for fair compensation to media organizations.
As discussions continue on regulating tech giants’ influence on local media, stakeholders have a window of 6 weeks to provide input before the final report is released in the coming months. The ongoing efforts aim to rebalance the digital landscape and ensure fair competition and compensation for news producers.
