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TECH GIANTS V. NEWS OUTLETS

Updated: Feb 6

By

Gautam Badlani, I year of BBA.,LL.B, from Chanakya National Law University


When the social media companies first started publishing news on their platforms, both the news companies and tech giants found it to be a win-win situation. The news companies benefitted from the wide range of social media which helped them in reaching out to more and more customers. The social media giants also directed the users to the websites of the news outlets. The social media giants benefitted from the increasing advertisement revenues and user base.


However, as the social media became more and more powerful, the revenues of the media companies began to shrink. Instead of reading newspapers or watching news channels, people found it much more-easier to access news on social media. The news outlets began to grow more and more unsatisfied with their share of advertisement revenue. The loss of revenues led to the closure of many news publications and has led to the loss of thousands of journalist jobs. A universal consensus seems to be building now that a check needs to be kept on social media giants and that the social media giants should be more transparent regarding their advertisement revenues.


AUSTRALIA’S NEW LEGISLATION

The Australian Parliament has proposed legislation that would require Google and Facebook to enter into payment negotiations with the news media outlets in return for using their content. In case no agreement can be reached upon within three months, and arbiter would be appointed to adjudicate. The legislation also proposes hefty fines in case of a violation of the rules. The Australian government has cited the duopoly of Google and Facebook and the threat that this duopoly possesses to democracy as the reasons for the new legislation. The new laws will make Australia the first country in the world to force the tech giants to pay to the news media outlets. The social media giants have responded aggressively to this legislation.


Google and Facebook have said that it is not practically feasible to conform to the terms of the new legislation. Facebook has threatened to stop publishing Australian news and google has threatened to remove its search engine from Australia. The social media giants fear that if this legislation is successful, then it could lead to similar provisions in other countries, and as a result, the revenues of the companies would be badly affected. The social media giants have been backed by the United States government which has asked the Australian Parliament to scrap the laws.


FACEBOOK’S NEWS TAB AND GOOGLE NEWS SHOWCASE

Facebook has already launched its news tab in the United States and the United Kingdom and is planning to roll it in other countries as well. Under this, Facebook will be paying the publishers in order to license their content. According to Facebook, this will help in promoting original and authoritative reporting. The news tab can also be personalized, which will allow the users to see only what they like to see.


Google, on the other hand, is planning to roll out its new platform, Google News Showcase. Google has committed to invest an initial $1 billion in the next three years towards the Google News Showcase which will pay the news publishers for creating and distributing high quality content. Google has also entered into agreements with nearly 200 news publishers across Germany, U.K., Argentina, Brazil and Australia. However, the Google News Showcase is yet to roll out in India. This initiative is currently being made available only on Android devices and will soon be made accessible on iOS as well.


CONCLUSION

Though the social media companies are taking steps to formalize the payment pacts with the media outlets, they certainly need to do more. Google seems to be more serious than Facebook in this context. Google has announced that it will be compensating the news outlets in France for using their content. Both Google and Facebook make billions of dollars every year in advertising revenue, and they must not hesitate in reasonably sharing this profit with the media outlets. Many people use digital platforms such as Google and Facebook to keep themselves updated about the day-to-day happenings around the world, and they will not find these platforms very useful if they do not find news content on them. The formalization of the payment pacts will also help in keeping a check on fake news and hate speech.


The success or failure of these new legislations which are being drafted across the world will have their impact on India as well. India, the second largest online news consuming nation, is yet to begin any serious deliberations regarding the social media news regulations. That the US will protest against any serious attempt by the foreign governments to create a playing level field for their news outlets is inevitable, but this should not dissuade the governments across the world from holding the social media giants accountable for their arbitrary actions and forcing them to compensate the news outlets. There is an urgent need to check the growing market power of the tech giants.


Reference

https://www.theguardian.com/technology/2020/sep/05/why-google-and-facebook-are-being-asked-to-pay-for-the-news-they-use-explainer

Sundar Pichai, https://blog.google/outreach-initiatives/google-news-initiative/google-news-showcase/

Is Google Advertising Revenue 70%, 80%, Or 90% Of Alphabet’s Total Revenue? https://www.forbes.com/sites/greatspeculations/2019/12/24/is-google-advertising-revenue-70-80-or-90-of-alphabets-total-revenue/?sh=2fc9c3634a01