Google Challenges South Africa’s Claims of Unfair Profit from News Publishers

Google is under investigation by South Africa’s Competition Commission for allegedly unfairly profiting at the expense of local news publishers. The Commission argues that Google’s zero-click searches diminish traffic and revenue for media houses. Although Google disputes these claims, stating it generates significant referral traffic for publishers, the Commission estimates Google’s actual earnings from news content are much higher. Recommendations include annual compensation for publishers and changes to search features.

The Competition Commission in South Africa is intensifying its examination of major technology companies, specifically targeting Google. Following a protracted 16-month investigation, the Commission has accused Google of unfairly appropriating a significant portion of revenue generated by local news publishers, thereby exacerbating challenges faced by an already vulnerable media sector.

Central to the dispute is Google’s dominant presence in search, particularly regarding “zero-click” searches, where users receive answers directly on Google’s results page, without clicking through to news websites. The Commission asserts that this practice adversely affects media outlets by diminishing their website traffic and advertising revenue, all while Google continues to benefit financially.

In response, Google disputes these allegations, asserting its critical role in bolstering publishers by directing traffic to their platforms and investing in necessary tools and training. The company claims to have generated around R350 million ($18 million) in referral traffic for South African publishers in 2023, contrasting this with its earnings from news-related advertising, which it states were less than R19 million ($1 million).

The Commission, however, remains skeptical of Google’s assertions, estimating that the company’s actual earnings from news-related searches are substantially higher, between R800 million and R900 million ($42 million–$47 million). To remedy the situation, the Commission recommends that Google compensate local publishers with R500 million ($26 million) annually and alter its search features to boost traffic to news websites.

Khusela Sangoni Diko, the chairperson of the Portfolio Committee on Communication and Digital Technologies, has voiced robust support for the Commission’s proposals. She believes these initiatives could lead to significant reforms, including the establishment of a new media policy that would mandate digital platforms like Google and YouTube to compensate news publishers for the content that benefits them.

Currently, Google is evaluating the Commission’s findings and intends to provide a detailed response in due course. Nevertheless, it is clear that the ongoing conflict between the tech giant and local publishers is far from resolution.

In summary, Google is facing accusations from South Africa’s Competition Commission for unfairly profiting from local news publishers, particularly through its zero-click search feature. The Commission estimates Google’s earnings from news-related searches are significantly higher than the company has reported. Recommendations include substantial financial compensation to local publishers and adjustments to search algorithms. This situation highlights the ongoing scrutiny and challenges facing major tech companies in their operations within local markets.

Original Source: www.techinafrica.com

About Sofia Nawab

Sofia Nawab is a talented feature writer known for her in-depth profiles and human-interest stories. After obtaining her journalism degree from the University of London, she honed her craft for over a decade at various top-tier publications. Sofia has a unique gift for capturing the essence of the human experience through her writing, and her work often spans cultural and social topics.

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