Google May Face $27M Annual Payout to South African Media for Anti-Competitive Practices

Google could be required to pay South African media outlets up to 500 million rand ($27.29 million) per year after the country’s Competition Commission found the tech giant guilty of anti-competitive practices. Social media giants Meta (Facebook) and X (formerly Twitter) also face potential fines.

Google Accused of Distorting Search Results

In its provisional findings released Monday, the South African Competition Commission revealed that Google’s search algorithm favors global media over local news sources, underrepresenting community and indigenous language media.

The watchdog stated that this imbalance has weakened South Africa’s media industry over the past 14 years and will continue unless corrective measures are taken.

Proposed Solution: Google to Compensate South African Media

To address this issue, the Commission recommends that Google pay South African news outlets between 300 million and 500 million rand annually for three to five years. Additionally, Google must modify its search algorithm to drive sustainable referral traffic to local media.

A final report is expected later this year, with stakeholders having until April 7 to submit supporting evidence.

Google’s Response: Disputes Findings, Highlights Support for Publishers

Google has stated that it disagrees with the claims that it has taken disproportionate value from publishers.

In a statement, Google noted:

• In 2023, South African publishers received an estimated 350 million rand in referral traffic value from Google Search and News.
• Google’s ad revenue from news-related searches in South Africa was less than 19 million rand.
• The company has invested in products, training, and partnerships to support publishers.

Meta & X Also Under Scrutiny

The Commission also targeted Meta (Facebook) and X, urging them to stop deprioritizing South African news content in algorithms for the Home Feed, “For You,” and “Latest” sections.

Additionally, it called for Meta and YouTube (Google-owned) to increase revenue-sharing for news media to enhance monetization opportunities.

Potential Penalties for Non-Compliance

If these companies fail to implement changes within six months of the final report’s release, a 5-10% digital advertising levy could be imposed on their South African operations.

Meta has not yet responded to the report.

The Commission clarified that the remedies apply exclusively to South African operations of these tech companies.

($1 = 18.3215 rand)