Google & Facebook face CCI probe on India news media revenues

TRAI also hints at regulatory intervention on revenue sharing

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Google has launched its News Showcase to ward off government intervention Photo Credit: Ekaterina Bolovtsova on Pexels
Google has launched its News Showcase to ward off government intervention Photo Credit: Ekaterina Bolovtsova on Pexels

In February, INS asked Google to compensate them for carrying their content online by sharing 85% of its ad revenues. “Google is taking a ‘giant share of advertising spends’ leaving publishers with a small share and that the publishers are facing a very opaque advertising system as they are unable to get the details of the Google advertising value chain.”

Based on the INS complaint, the Competition Commission of India initiated an investigation into complaints against Google for abuse of its dominant position in the online news media market based on a plaint filed by the Indian Newspaper Society (INS). The INS says that while the news content is generated by the publishers, Google gets to keep an arbitrary and disproportionately large share of the advertising revenue since it controls and dominates the entire digital ecosystem including both buying and selling advertisements. It has also questioned the opacity and obliqueness of the Google ad revenue system.

In mid-April 2022, the Telecom Regulatory Authority of India (TRAI) hinted at the possibility of regulatory intervention to enable Indian news media to get a fair revenue share from tech giants such as Google and Facebook. In a consultation paper issued recently, it said that policy interventions in other countries have played a substantial role in addressing news media concerns and negotiations. 

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In several news markets such as Australia and France, government intervention has successfully compelled Google particularly to cough up some reasonable approximation of fair revenue sharing. Thus far, in India in its bid to ward off regulators and government intervention, Google has launched its News Showcase, while Facebook has come up with its News Tab which allows selected publishers to highlight a few of their articles in return for some financial compensation.

“Digital media is a rapidly developing area. In the future, new tech giants may also join the digital media. Consequently, certainty, stability, and predictability in the regulatory regime are required,” TRAI said in its recent consultation paper in mid-April 2022. The TRAI’s observation is that though the print media industry is adopting digital innovations, it is unable to leverage the value of its content digitization due to the domination of tech giants such as Facebook, Google, Twitter, and Instagram.

“According to Edelweiss Research, the Facebook-Google duopoly controls 60% of all the digital spending. The publishers allege that these tech giants are making money by advertising on the strength of their news content through Facebook and Google claim that they are basically helping publishers by directing traffic to their website. In the past two years, internationally, quite-a-few state agencies have intervened in the ongoing tussle between Google-Facebook on one side and press and publishers on the other. Countries like Australia and France have come up with laws for the fair sharing of revenue between these tech giants and press publishers,” TRAI said.

“In the light of the initiatives of Google and Facebook, there is growing opposition against the state intervention and support to the self-regulatory regime. However, one cannot deny that state interventions have played a significant role in addressing the grievances of the news publishers and bringing the parties to the negotiation table. Further, digital media is a rapidly developing area. In the future, new tech giants may also join the digital media. Consequently, certainty, stability, and predictability in the regulatory regime are required,” TRAI said.

While the competition commission in France has played a decisive role in bringing a fairer share of revenue to that country’s new media, one wonders if two Indian government agencies getting involved is going to further complicate and delay the process. The idea of the media being regulated by the national telecom authority is fraught with further constraints for the democratic media in the republic.

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