South Africa Proposes Digital Tariff on Tech Giants to Support Local Media

The preliminary report, released this week, has sparked significant discussion, particularly its recommendation that Google should pay up to R500 million annually to support the country’s news industry.

The South African government has acknowledged and welcomed the provisional findings of the Media and Digital Platforms Market Inquiry (MDPMI), spearheaded by the Competition Commission of South Africa. The preliminary report, released this week, has sparked significant discussion, particularly its recommendation that Google should pay up to R500 million annually to support the country’s news industry.

Key Findings and Recommendations

The MDPMI has proposed a digital tariff ranging between 5% and 10% on major technology corporations, including Google, Meta, and Microsoft, should they fail to fairly compensate local media organizations for the content distributed on their platforms. This initiative seeks to address concerns surrounding the dominance of digital platforms in content distribution and their impact on the revenue streams of local media outlets.

The inquiry, which commenced on October 17, 2023, aims to scrutinize digital platforms that disseminate news media content. Its objective is to identify factors that could hinder competition, distort market dynamics, or conflict with the Competition Act. By doing so, the inquiry hopes to establish a more equitable digital media environment that ensures media sustainability and diversity in South Africa.

Government’s Perspective and Commitment

The Government Communication and Information System (GCIS) has described the inquiry as a pivotal step toward fostering a balanced and competitive digital media landscape. It emphasized that digital platforms are increasingly shaping content distribution and advertising revenues, which necessitates regulatory intervention to ensure fairness and sustainability.

Michael Markovitz, Adjunct Faculty Member and Head of the GIBS Media Leadership Think Tank, noted that the report targets the core issues contributing to anti-competitive behavior among large technology firms. He stated that the proposed reforms aim to reshape the digital ecosystem and enhance competitive fairness.

Through the GCIS and its collaboration with the Print and Digital Media Transformation Steering Committee, the South African government remains dedicated to bolstering an independent and diverse media sector. This commitment underscores the vital role of journalism in strengthening democracy and ensuring access to a broad spectrum of information.

Implementing the Recommendations

Deputy Minister in the Presidency, Kenny Morolong, has affirmed that the GCIS will engage with media houses, digital platforms, advertisers, and the public to implement the final recommendations of the MDPMI. He stressed that these efforts will not only address existing challenges within the media industry but also unlock new opportunities for innovation and growth.

The GCIS further asserted that the inquiry’s findings align with the country’s broader objectives of media transformation and sustainability. The anticipated measures will promote economic participation, fortify public interest journalism, and contribute to a more equitable media landscape in South Africa.

Push for Legislative Action

Khusela Diko, Chairperson of the Portfolio Committee on Communication and Digital Technologies, has also endorsed the inquiry’s findings. She highlighted that the recommendations bolster the committee’s call for an expedited publication of a White Paper on Audio and Audiovisual Media Services and Online Content Safety, spearheaded by the Department of Communication and Digital Technologies (DCDT).

Diko emphasized that over-the-top (OTT) digital platforms have long exploited regulatory loopholes at the expense of the South African Broadcasting Corporation (SABC), which operates under stringent regulations. She welcomed the proposal that media organizations be compensated for their content, which is frequently utilized by OTT and digital platforms without adequate remuneration.

Additionally, she noted that the recommendations regarding Google and YouTube could serve as a precedent, reinforcing the necessity of direct regulatory oversight in the digital sector and discouraging unethical business practices.

 

The provisional outcomes of the MDPMI mark a significant step toward achieving a more balanced digital media environment in South Africa. By holding tech giants accountable and ensuring that local media organizations receive fair compensation, the government aims to create a sustainable and equitable digital landscape that supports media diversity, public interest journalism, and fair competition.