Google & Facebook Will Have To Pay British Newspapers

The big  US technology firms, notably Google and Facebook, are able to generate huge revenuse and profits from millions of website clicks driven by third party news organisations who originate the content but don't benefit from the related advertising. Indeed, the online power of the US technologies companies who now dominate online advertising has overturned the business model of conventional news businesses.

Publishers have for a long time complained about Google and Facebook’s use of their stories and that Google and Facebook dominate the digital advertising business with little return for the publishers.

Now, following the introduction of legislation in Australia, Britain is changing media laws to compel  Google Facebook and other social media companies to pay newspapers and other media outlets for using their stories. These are modeled on a system that has been introduced in Australia and social media platforms will be encouraged to negotiate payment deals with news organisations. If the negotiations fail, an independent arbitrator would set a fair price.

The move, being driven by UK Cultural Secretary Nadine Dorries, comes amid growing concerns that the tech companies are dominating online advertising, to the detriment of consumers and businesses. 

The new regime will be regulated by the Digital Markets Unit (DMU), the digital watchdog that was set up within the Competition and Markets Authority (CMA) to rein in the power of the tech platforms. The unit will also investigate the algorithms used by search engines such as Google, which many news organisations believe are manipulated to disproportionately direct search enquiries towards Left-leaning news organisations, and filter how people read and access news, to the detriment of quality, paid-for journalism. The DMU is also being given powers to levy large fines on online companies to prevent customers or companies from being treated unfairly and to make firms give smaller rivals access to their vast troves of data. 

Google and Facebook took about four-fifths of the £14 billion spent on digital advertising in the UK in 2019, while national and local newspapers took less than four per cent. Google charges between 30 and 40 per cent more for search advertising on desktop and mobile devices than Bing, its closest rival.

Facebook argues that it already helps to support UK publishers by paying tens of millions of pounds to national and local outlets to be part of Facebook News, and as part of the Community News Project, which funds 80 trainee reporters in newsrooms across the country. Indeed, Meta, Facebook’s parent company, says it has spent $17m on news perjects and is funding 100 journalists in the UK and that it helps to drive billions of conections to news publishers.

Nieman Lab:      Business-Standard:     iNews:   The Sun:      Daily Mail: 

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