Competition Commission eyes ChatGPT and AI in new market inquiry

The Competition Commission has published the terms of reference for a market inquiry into the distribution of media on digital platforms in South Africa – which includes the impact of artificial intelligence and platforms like ChatGPT on media and publishers in the country.

Through the Media and Digital Platforms Market Inquiry, the commission will investigate the view that there are market features in digital platforms that distribute news media content that potentially impede, distort, or restrict competition – which may have adverse implications for the news media sector of South Africa.

“This imbalance can have implications for fair payment for content and the sustainability of independent journalism,” it said.

Similar to inquiries done in countries like Australia, the commission’s main concern is over dominance by platforms like Google and Meta (ie, Facebook) and how search engines, social media sites and video-sharing platforms use and aggregate publisher and media content, but without permission or compensation to media houses and publishers.

Broadly, the inquiry will investigate:

• The interaction and dependency of South African news media businesses on relevant digital platforms as an intermediary, distributor, and link to online users for the dissemination of news content online; and
• The impact on news media businesses to aggregate, display, create, and monetise their news content online.

The main digital platforms that the inquiry will focus on include:

• Search engines;
• Social media sites;
• Video-sharing platforms; and
• News aggregation platforms.

The inquiry will also take a forward-looking approach and evaluate new technologies adopted by digital platforms, such as generative artificial intelligence (AI) search support (e.g., ChatGPT), and the significance these may have on the operations of businesses in the South African news media sector.

In late November 2022, Open AI launched a chatbot model, ChatGPT which uses generative AI machine learning to answer any questions posed by users.

In February 2023, Microsoft announced that it had partnered with OpenAI to utilise the ChatGPT chatbot model in its Bing search engine. Around the same time, Google announced it had launched its own chatbot model, Bard, that would be integrated with its search engine.

The commission noted that the integration of these generative AI-based chatbots into search engines allows users to obtain direct answers to questions or queries posed on the search results page without the need to necessarily obtain them through accessing publisher webpages.

“This poses a potential threat to user traffic being driven to online content publishers’ webpages such as news publishers, resulting in a further threat to monetisation of their content through adverts.

“Furthermore, South African news publishers’ content may also be used to train these AI systems without authorisation or compensation. This was confirmed by ChatGPT itself in response to that query,” it said.

According to the commission, South Africa is seeing a growing shift in the consumption of digital news sources due to the increasing adoption of digital devices like smartphones. The distribution of news content over the digital platforms being focused on in the inquiry has become a convenient way for news content to reach consumers.

“This change in consumer behaviour and distribution model has impacted the cost and revenues of South African news media businesses. There has been a loss of traditional classifieds and print advertising revenue, as well as additional costs in providing digital news feeds and ensuring visibility on these digital platforms,” the commission said.

“Whilst digital advertising revenue has increased, and there is potential for aggregator content revenues, the features of digital platform markets can influence the magnitude of these revenue streams, which is what the inquiry intends to consider.”

The inquiry will focus only on businesses within the South African news media sector, including news publishers and broadcasters, the commission said.

“The inquiry is underpinned by the value of a properly funded press to advance a well-functioning democracy. This includes the diversity of views from smaller media businesses and media owned by historically disadvantaged persons,” the commission said.

“The nature and extent to which digital platforms impact the news media sector in South Africa are still to be evaluated and determined through this market inquiry.”

Read: How ChatGPT and Google Bard can help schools and businesses