Google rejects claims it was exploiting local South African news publishers

Google, the US-based tech giant, has denied allegations from South Africa’s Competition Commission (CompCom) that it has disproportionately extracted value from local news publishers. The act, according to the watchdog, is contributing to the decline of the country’s media industry. 

The dispute follows the release of a provisional report from CompCom’s 16-month Media and Digital Platforms Market Inquiry on Monday which accused Google and other tech companies of anti-competitive practices. The report also recommended annual compensation of $16 million (R300 million) to $27 million (R500 million) for South African publishers over a three- to five-year period. 

Google, however, denied any wrongdoing. While rejecting the commission’s findings, the company asserted that its contributions to South African publishers far outweigh the revenue it derives from news-related activities in the country. 

“We will review the report in detail, but we disagree with the claim that Google has taken disproportionate value from publishers. In 2023, our products like Google Search and News generated an estimated R350 million in referral traffic value for South African publishers, while we earned less than R19 million from ads displayed next to news queries,” a spokesperson for the company said.

The spokesperson also said the company has invested in products, training, and partnerships to support publishers and the broader news ecosystem and will continue to do so. 

CompCom’s allegations against Google

The CompCom’s report, based on extensive evidence-gathering, public hearings, expert submissions, and consultations with industry stakeholders, paints a stark picture of an imbalanced relationship between Google and South African news publishers. 

It asserts that Google’s “monopoly position” in internet search, coupled with the media’s unequal bargaining power, has led to an inequitable sharing of value, both historically and presently. 

The commission estimates that Google extracted between R300 million and R500 million in additional value from publishers in 2023 alone. This figure derives from a combination of revenue generated through Google Search and the destruction of value via “zero-click” behaviours, where users access information directly on Google without visiting publisher websites. 

CompCom also accuses Google of “self-preferencing behaviour,” particularly favouring YouTube links in its Search Engine Results Pages (SERPs) and Discover feed. The report notes that YouTube accounted for 60-70% of video impressions on Discover in the past year, while South African news media secured only 5-10% of impressions. 

Additionally, the commission claims Google’s algorithm distorts competition by over-representing global news media and subscription-based publishers and under-representing vernacular and community media in South Africa. 

The report also criticises Google’s lack of transparency around search engine optimisation (SEO) requirements and algorithm updates, which leaves publishers vulnerable to traffic losses without adequate support. Looking ahead, the competition watchdog warns that the rise of AI-powered search could exacerbate value extraction unless publishers are given options to opt out of AI summaries and technological safeguards are implemented to protect referral traffic. 

Proposed remedies to address the alleged imbalance 

Alongside the R300 million to R500 million annual compensation, the report recommends that Google funds projects to enhance digital news capabilities and strengthen journalism, with administrative costs borne by the company. Eligible recipients include media outlets and broadcasters primarily serving South Africa, covering current events, and regulated by the Press Council or the Broadcasting Complaints Commission of South Africa (BCCSA). 

Additional recommendations include dedicated SEO support for local publishers and negotiated contributions from Google and Microsoft to the Press Council and BCCSA. 

The commission also raised concerns about Google’s tax strategies, suggesting they represent a loss of value to South Africa. It estimates that a proposed 5% digital tariff on Google’s revenues starting in 2026 could generate R400 million to R500 million, roughly equivalent to the value imbalance with news media.

“While not directly linked to the value imbalance, it is informative to understand the loss of value to the country from Google’s tax arrangements,” the report noted. 

Khusela Sangoni Diko, chairperson of the Portfolio Committee on Communication and Digital Technologies, welcomed the findings, viewing them as a step toward addressing the exploitation of regulatory gaps by over-the-top (OTT) digital platforms like Google and YouTube. 

Diko highlighted the detrimental impact on the South African Broadcasting Corporation (SABC) and urged the Department of Communications and Digital Technologies to expedite a white paper on audio, audiovisual media services, and online content safety. 

The clash between Google and CompCom underscores a growing global tension between tech giants and national regulators over the value of digital content. For South Africa, CompCom’s proposed remedies aim to rebalance the equation, but Google’s firm denial suggests a protracted battle may lie ahead.

As the inquiry moves toward its final conclusions, the outcome could set a precedent for how digital platforms engage with local content creators, not just in South Africa, but across the globe.

Read also: South Africa to fine Google, Meta over $16m annually for 3-5 years over news sharing