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Why did the News Broadcasters and Digital Association team up with the search engine giant for revenue sharing? Is the conflict between news publishers and Google unique to India?
Story so far: On October 6, the News Broadcasters and Digital Association (NBDA) approached the Competition Commission of India (CCI) against search engine operator Google, alleging that the operator has deprived them of their rightful revenue earned from disseminating news on the tech giant’s platforms . The complaint would be linked to similar cases filed by the Indian Newspaper Society (INS) in February this year and the Digital News Publishers Association (DNPA) last year.
Why is Google dominant?
According to the NBDA, Google’s search engine has a 94% market share in the country. This number becomes even more important for news publishers as there is an increasing shift to online news consumption (including app-based consumption). The traditional newspaper industry in India runs on a business model where advertising accounts for two-thirds of its total revenue. Similarly, with online distribution, there is an increased reliance of news publishers on digital advertising revenue and, in turn, technology-based companies. More than half of all news website traffic is routed through Google. The search engine uses its algorithms and internal quality checks to determine which news sites will be prioritized in search queries. Here it is essential to understand that search engines are an important determinant of online news consumption. Readers are more likely to choose to search the web online rather than go to a specific news site by typing its URL into their browser. This has made search engines the first place to use information online.
What are the key allegations?
Google was found to be dominant in both markets relevant to digital publishers – online web search and digital advertising services. The news website sells advertising space on its platform through exchanges. In addition, Google also operates a platform that manages the publisher’s online ad sales and tools for buying content advertising space. The central dispute between the parties alleges that the tech giant failed to compensate news publishers for their contribution to Google’s (various) platforms and engaged in practices to strengthen its monopoly in the space. The DNPA reported that website publishers receive only 51% of advertising revenue. It claims that due to the tech giant’s dominance in the space, publishers have been “forced” to integrate content into their platforms. They have no choice but to trade on the company’s exchanges and use its Google Ads/DV 360 buying tool to receive bids from advertisers.
In addition, the search engine operator was accused of encouraging members to ban header bidding. It refers to the process of programmatic bidding that brings together multiple exchanges for a single bid event. In addition, the tech giant has been accused of “forcing” members to use its Accelerated Mobile Pages (AMP) or create mirror-like “lightweight” websites. If they didn’t, it would hurt their mobile search rankings. However, he limited the paywall’s options if publishers don’t rebuild their websites to AMP standards. It is important to note here that if the reader does not click on the snippets and enter your website, it will limit the website’s earning potential. Essentially, the search engine wouldn’t bother because the same user could later search for non-news content on the same platform. note about the tech giant’s alleged “one-sided and non-transparent” determination and sharing of ad revenue. “The case also raises the issue of an alleged lack of transparency and information asymmetry in the ad technology services provided by Google, which does not optimize revenue from their ad inventory,” the order said. This hampers the quality of service and innovation in the news industry.
What is happening outside India?
In February of this year, the European Publishers Council filed an antitrust complaint against Google with the European Commission, challenging its existing “ad technology stranglehold” on print publishers. “Google’s ad technology suite is fraught with conflicts of interest because Google represents the buyer and seller in the same transaction while running an auction house in the middle and selling its own inventory,” the statement said.
In February, Australia introduced a “Media Bargaining Code” to address this imbalance. As reported by Reuters, the code requires news outlets to negotiate business deals individually or collectively with Facebook and Google, with violations carrying civil penalties of up to $10 million. Tech firms would also have to notify the media when they change search algorithms that can affect publishers’ content. Google has expressed concerns about such legislation on several occasions. “The Internet was built on the ability to freely link websites together, allowing people to browse the Internet easily. The change would fundamentally disrupt the way the open web works and how people use Google search,” one executive argued in a blog post.
According to Google, the revenue generated is used to cover the costs of running a “complex and evolving business,” such as maintaining data centers, making other technology investments, enabling innovations that increase publishers’ revenue, and maximizing advertisers’ return on investment, among other things.