12 June 2023

NMA Paper Debunks Myths From Tech Platforms On Payment For Content

Concerns expressed about legislation to ensure big tech negotiate with news publishers for the value of trusted content are unfounded, a new paper published by the News Media Association has said.

The paper makes clear how the Digital Markets, Competition and Consumers Bill, through empowering the Digital Markets Unit, will open the market up between the tech platforms and news publishers by reining in the entrenched market power of big tech.

Negotiations would account for the benefits that platforms bring to publishers as well as the immense value that publishers bring to search engines and social media businesses – ensuring that agreements would be fair and reasonable.

The paper says: “Ultimately, if platforms are truly convinced that news publishers provide them with little value, it would make commercial sense for them to welcome DMU regulation and reap the benefits of negotiation.

“Instead, platforms have chosen to vociferously lobby against the Bill, and their efforts have given rise to several misrepresentations about the nature and impact of the legislation.”

Matt Elliot, Cambridge University professor of economics, calculated the annual value of UK news to Google is up to £840 million, whilst Professor Gawer of the Surrey Centre of Digital Economy at the University of Surrey, has estimated that the value which Google returned to publishers was less than £75 million a year. 

Google claims that news-related queries account for only two per cent of total queries on Google Search globally and that the revenue it receives from ads next to news-related queries was less than $20 million in 2020.

By contrast, Professor Elliot’s study found that in the UK, 69 per cent of results of the most searched queries on Google surface news content, with 57 per cent of searches that display adverts also showing news content.

Following the publication of the NMA paper today, NMA chief executive Owen Meredith said: “This paper dispels the scaremongering around what should be an easily accepted principle – that the platforms should trade on fair and reasonable terms with the trusted news publishers that safeguard our democracy.

“As the DMCC Bill enters Committee stage in the House of Commons this week, we look towards the Committee and government to ensure that the Bill makes rapid progress through Parliament, ensuring that the legislation is not watered down so that the new regime delivers fair competition in our digital economy.”

The new regime will be a vital step in paving the way to securing a sustainable future for news publishers in the digital age, the paper said.

The paper states: “Platforms may have created an efficient advertising model, but they have not created any public interest journalism; instead, they threaten its production because they benefit greatly from publishers’ output without having paid for it. Henry Ford did not depend on horses to monetise his motor cars in the way that platforms need publishers’ content to monetise their platforms.”

The paper also refutes claims that the Bill would create a ”link tax,” as any deals made with the platforms would be based on “a broad assessment of the value of copyrighted content to platforms” – which would not relate solely to hyperlinking.

Fair deals for the value of news content would strengthen the news media sector’s ability to invest in trusted journalism increasing public access to news.

The paper makes the point that “the real threat to citizens’ ability to access trusted news is platforms’ irresponsible threats to restrict access to content,” with examples of this occurring in Australia and Canada, with recent threats also made in the US.

The paper also highlights that the deals made in Australia, as a result of their News Media Bargaining Code, have resulted in many eligible publishers, both large and small, successfully making equitable deals with the platforms.