The Competition Commission wants Google to pay a digital revenue tax.
Image: Lionel Bonaventure/ AFP
A regional executive at Google has accused South Africa's Competition Commission of seeking to resurrect outdated business models with the recommendations tabled in its Provisional Report on Media and Digital Platforms.
The report, released in February, blames Google and other social media tech giants such as Meta, for the erosion of the South African media over the past 14 years.
It claims that Google’s algorithm favours international news media while under-representing local media, particularly community and vernacular channels.
It also accuses the tech giant of creating an imbalance in the bargaining power that media have in terms of monetising their content. This allegedly resulted in annual losses of between R300 million and R500 million, according to the Commission's calculations.
As a solution, the report has recommended remedies such as compensating the media for lost revenue through a "digital service tax" as well as algorithm adjustments.
It also expressed concern that Google's AI summaries at the top of search feeds could result in even fewer clicks for online media pages.
However, Google's director for public policy in sub-Saharan Africa, Charles Murito, argues that the Commission's recommendations would force one platform to subsidise another artificially, based on inaccurate calculations about the perceived value of news to Google's business.
In an op-ed published on Tech Central, Murito argued that such a move would restrict access to information, stifle innovation and potentially discourage future investment in the country.
Furthermore, he said that forcing algorithm changes to favour local news would limit the diversity of sources and perspectives.
"The commission’s demands to modify specific AI products would break innovative features like AI Overviews and Gemini, both of which have been helping people in South Africa more easily learn about complex topics," Murito said.
"Not only would this limit South Africans’ access to knowledge openly available elsewhere in the world, it could create conditions detrimental to future investment and innovation in the market."
He also argued that the proposed interventions would result in publishers earning less revenue.
"Our advertising technology helps publishers make money on their websites, videos and apps. The proposed changes would make it harder and more expensive for many publishers to earn money for their content."
Murito said that Google Search, News and Discover sent 545 million clicks to South African news publishers in 2023, creating an estimated R350 million in referral traffic value for them. He said Google, by contrast, earned less than R19-million from ads displayed next to news queries in that year.
While Google has provided monetisation technology to local media through tools such as Adtech, one cannot ignore the problem that local media are faced with declining revenues, creating an existential threat for what is an essential service to the public.
While Google has stated it will collaborate with the Competition Commission to seek solutions, it would be at the world’s peril that the tech giants continue to ignore the steady decline of journalism as an essential service to the public.
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