JOHANNESBURG, Feb 24 (Reuters) - Google could

be required to pay up to 500 million rand ($27.29 million) a

year in compensation to South African media outlets after the

country's competition watchdog found the tech giant guilty of

anti-competitive practices, while Meta and X also face

fines.

In provisional findings from a probe into market activities,

released on Monday, South Africa's Competition Commission said

that Google's algorithm distorts competition between news media

organisations insofar as it overrepresents global news media in

South Africa for search and top stories and underrepresents

local language and community media.

"This inequity has materially contributed to the erosion of

the media in South Africa over the past 14 years and will

continue to do so unless remedied," the watchdog's report said.

To remedy this, it recommended that Google compensate the

South African news media by 300 million to 500 million rand

annually for a three to five-year period, "whilst putting in

place changes to search that will sustainably create shared

value with the media through increases in referral traffic."

The watchdog will publish a final report later this year,

with all parties concerned given until April 7 to submit

evidence to support their case.

Google said that it will review the report in detail but

disagreed with the claim that it has taken disproportionate

value from publishers.

"In 2023, our products like Google Search and News generated

an estimated 350 million rand in referral traffic value for

South African publishers while we earned less than 19 million

rand from ads displayed next to news queries," Google said in a

statement.

"Alongside this, we have invested in products, training and

partnerships to support publishers and the broader news

ecosystem, and will continue to do so."

On social media companies, the Competition Commission

recommended Meta-owned Facebook and X stop "deprioritising South

Africa news media posts with links" in the home feed, For You

and Lastestfeed algorithm and restore referral traffic to the

media.

It wants Meta and Google's YouTube to improve the ability of

news media to monetize their content on these platforms through

increases in revenue share.

If all these companies fail to implement these remedies

within six months after the final report, a 5-10% digital

advertising tariff or levy will be imposed, according to the

report.

Meta was not immediately available for comment.

The remedies only apply to the South African operations of

these companies, the Commission said.

($1 = 18.3215 rand)