Publishers vs Google
DEADLOCK: COMPETITION COMMISSION INQUIRY STARTS THIS WEEK
→ New beachhead as tech giant refuses to disclose how much it earns from content.
The relationship between South Africa’s major publishers and Google has turned hostile and may trigger an aggressive face-off between the parties as the Competition Commission’s Media and Digital Platforms Market Inquiry (MDPMI) gains momentum.
The hostility comes after protracted negotiations last year between Google and individual publishers – seeking to reach commercial agreements for Google’s use of their news content – hit a brick wall. According to several sources, Google’s final settlement offers were insulting, and the industry believes Google negotiated in bad faith.
Following the collapse of the negotiations, JSE-listed Caxton and Naspers-owned Media24, together with the Campaign for Free Expression (CFE), an organisation set up to protect press freedom in SA led by journalism veteran Prof Anton Harber, went on the offensive.
They sent letters to Google stating that its dominance in the digital space has distorted the SA media landscape to such an extent that it threatens the financial viability of the sector and freedom of the press.
They request that Google disclose information about its local operations and precisely how much money it makes from aggregating their news content, which they deem critical to ensure that any future negotiations are fair and are on a level playing field.
However, Google has refused to disclose any information, which turns the MDPMI into a beachhead for future engagements.
Requests for information
The CFE letter states that for “SA news entities to continue fulfilling their constitutional role, it is critically important these market distortions do not persist; that news publishers are appropriately compensated for the benefits accrued by Google from the use of news content; and that news publishers are positioned to compete effectively”.
He said this can only happen if Google discloses the information to the industry.
Media24 stated in its letter that it “has reluctantly come to the view that negotiations to date
between Media24 and Google have been futile, and will continue to be”.
‘Parasitic, secretive’
Caxton chair Paul Jenkins put it more bluntly in communication to Moneyweb: “There is a stark reality that has taken the mainstream news organisations a long time to realise – Google [and Meta] are inherently parasitic and are sucking the lifeblood out of the free press, a veritable cuckoo in the nest.”
He said in the past the media was funded by advertising. “But the advertising platforms are now dominated by big tech, for whom click-bait is more valuable than a hard-hitting news story.
“The playing field has tilted so dramatically to favour Google that news is relegated to the lowest league in the revenue share tables.”
Google’s response to Caxton
Google communicated its decision not to disclose any of the requested information to Caxton in a letter marked “confidential”.
In this letter, which Jenkins made available to Moneyweb, Google denies that its operations “contravenes any applicable law” and denies Caxton has any legal claim to seek the information. “The information you have requested is confidential,” it said.
Google did not respond to questions.
CompCom inquiry
This shifts the battlefield to the MDPMI, with public hearings starting this week.
Disclosure: Caxton’s majority shareholders are also significant shareholders in African Media Entertainment, the owner of Moneyweb. Jenkins is a non-executive director of Moneyweb