CMA: New Regulatory Regime Will Focus On Establishing Fair Process For Negotiation
The new regulatory regime to rebalance the digital advertising market will focus on ensuring the process of negotiation between publishers and the tech platforms is fair, rather than setting prices for transactions, the Competition and Markets Authority has said.
Outlining the approach that will be taken by the new Digital Markets Unit, witnesses from the CMA told peers that it was vital that a code to govern the relationship between the platforms and publishers be placed on a statutory footing.
Giving evidence to the Lords Communications and Digital Committee as part of its inquiry into freedom of expression online CMA senior director of markets Daniel Gordon said the Australian code was a good place to start in developing a code for the UK.
He said: “I think we would agree with certain important features within it. The first is that the code is statutory. That’s something we’ve said; that the code of conduct needs to be enforceable, it needs to be in law.
“I think the second element that we will probably veer towards at this point is that it makes a lot more sense in this area for the regulator to be looking at determining the process, what is a fair process, rather than itself trying to second guess these complicated transactions between businesses that it doesn’t run, and to impose terms.”
Announcing the launch of the DMU, Culture Secretary Oliver Dowden had asked the unit to start to explore what sort of approaches a code might take to addressing these issues and the CMA will be “talking to content providers, newspaper groups and others to understand these things more,” Mr Gordon said.
The NMA stressed that legislation must be brought forward as quickly as possible and said it will engage with the new regulator to ensure the needs of news media publishers are considered during the process.
Referencing evidence from previous newspaper industry witnesses to the inquiry, Baroness Rebuck said an absence of legislation in the UK had led to newspaper groups signing deals that were “possibly less than they should have been able to negotiate.”
“One particular witness said that as far as some of the regional newspapers were concerned, they would take whatever was on the table because of their cash needs,” Baroness Rebuck added.
Talking about payment for content, CMA director Simeon Thornton said there were “some subtle ways” in which the bargaining position between platforms and news media organisations could be rebalanced in news media organisations’ favour.
“One of the examples we gave was why not give the news media organisations greater influence over the way in which their content is provided on search results because at the moment it’s fairly holistic you get the whole article and there’s an incentive for Google to keep people on their system looking at the article,” he said.
“But if news media organisations had an opportunity to say, you only get a smaller snippet, a smaller bit of information, that again might tip the relationship and give Google a greater incentive to bargain in good faith over payment for content.”