Big Tech, the media compete for the flow of information

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Tech majors like Google, Facebook have faced the wrath of news publishers for allegedly taking the lion’s share of digital advertising revenue. It even prompted Australia to write rules in August requiring those companies to pay for information posted on their platforms. Mint explores.

What are the reasons for the agony of publishers?

The main struggle is who controls the distribution of the news. By becoming the main source of information on the Internet, Google, Facebook and Twitter have become publishers in their own right, without editorial oversight. These businesses are also making money from digital advertising, which is also quickly becoming the main source of revenue for publishers. The Australian government in August drafted a regulation that would require tech companies to pay news publishers to display their content, a move that has met strong resistance. In fact, Facebook even threatened to remove the news from its platform in Australia.

Should Big Tech Pay News Publishers?

While the question sounds simple, it can actually have multiple layers. It could be argued that news publishers depend on search engines and social media for traffic, which means they use the service provided by Big Tech and therefore should pay for that service. As it stands, they pay for it by sharing a large chunk of the ad revenue with these companies. However, the traffic to the news editors from these platforms is determined by the algorithms, which means that they are the ones who should pay to use the content provided by the editors because they are not creating the content in first place.

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Change in consumption

How did the media react to these cases?

Many publishers around the world have tried to switch to subscription and paid news models to get around Big Tech. However, this has not worked for the most part since Google, Facebook and Apple serve as a gateway to the Internet. In India, some lawyers argue that this is reason enough for the Indian Competition Commission (ICC) to step in and regulate how the gatekeepers should act.

What did the tech majors do to solve the problems?

Google, Facebook and Apple have for their part taken some measures to allay the concerns of publishers. On October 1, Google announced a billion dollar initiative to authorize news from publishers for a new product called Google News Showcase. Facebook launched a similar initiative last year, offering to pay news publishers to license their content for an organized section of the app for news. Apple, meanwhile, has offered to give 50% of the revenue to publishers for its Apple News Plus subscription service.

Who has the reins to tackle this in India?

Some say that for the ICC to get involved in India, it would have to prove that Big Tech operates in the same market as news publishers. Alternatively, the Competition Act could be invoked if Big Tech behavior turns out to be predatory towards news publishers. Some lawyers also claim that the Central Consumer Protection Authority, formed in 2019, could also look into this issue if it can be proven that the power of Big Techs on the internet affects the consumer when it comes to information.

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