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U.S. tech giant Google has rejected claims by South Africa’s Competition Commission that it has extracted disproportionate value from South African news publishers, allegedly contributing to the decline of the local news media industry.
In a provisional report from its 16-month-long media and digital platforms market inquiry, published on Monday, the commission argued that Google’s “monopoly position” and the unequal bargaining power of the media have resulted in an unfair distribution of value between the U.S.-based company and local news publishers.
According to the report, this imbalance has significantly contributed to the decline of South Africa’s news media sector over the past 15 years—a trend that will persist unless corrective measures are implemented.
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“It is apparent that the value derived by Google from the relationship with the news media far exceeds that derived by the news media, and Google’s conduct around zero clicks destroys potential additional value for the news media. If this were to be an equitable relationship, then the value would be shared equally,” the report stated.
(Zero-click behavior refers to users obtaining the information they need directly from Google’s search results without clicking through to the source website.)
However, Google defended its role, stating that the Competition Commission has underestimated the value the company provides through its products and initiatives supporting local media.
“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 $18.3 million in referral traffic value for South African publishers, while we earned less than $990,000 from ads displayed next to news queries,” a Google spokesperson told TechCentral.
“Alongside this, we have invested in products, training, and partnerships to support publishers and the broader news ecosystem, and we will continue to do so.”
The Competition Commission’s report estimates that, in 2023, the total value of news-related content to Google Search and Google Discover ranged between $41.9 million and $47.2 million in revenue.
Additionally, Google allegedly derived an extra $5.2 million to $10.5 million from YouTube revenue sharing for news video referrals and $10.5 million to $15.7 million from Google AdTech for all traffic directed to news publishers.
According to the commission, the disproportionate value extracted from South African publishers in 2023 ranged between $15.7 million and $26.2 million.
It recommended that Google pay up to $26.2 million per year to rectify the imbalance and implement changes to its search algorithms to increase referral traffic to news publishers.
The Competition Commission accused Google of engaging in “self-preferencing behavior” in search results, favoring its own platforms over independent news publishers. The report highlighted that:
- YouTube accounted for 60-70% of all video impressions on Google Discover in 2023.
- YouTube also controlled 10-15% of all impressions on Discover.
- South African news media had a much smaller share, estimated at 5-10%.
The commission further criticized Google for allegedly shifting costs and risks onto the media industry. It claimed that Google’s dominance in internet search forces media outlets to invest in search engine optimization (SEO)—which improves Google’s search functionality—without receiving fair compensation for their efforts.
The commission also scrutinized Google’s tax strategies, arguing that they result in significant revenue losses for South Africa.
The report suggested that funds directed offshore could have been reinvested in local news media instead.
To counteract this, the commission is considering a 5% digital tariff on Google’s revenue in South Africa, starting in 2026. This tariff would generate between $21 million and $26.2 million annually, an amount that closely matches the estimated value imbalance between Google and the news media industry.
“While not directly linked to the value imbalance with the news media, it is important to understand how Google’s tax arrangements contribute to lost revenue for the country, and how that compares to the potential redistribution of value to the news sector,” the report stated.
Google stated that it will thoroughly review the Competition Commission’s findings before issuing a more detailed response.
The commission’s final recommendations could have major implications for how Google operates in South Africa, especially in its partnerships with local media organizations.
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