Over the last few months, Google has been cornered into agreeing to pay for news it has swiped from publishers for over a decade, often with specious arguments.
Recently, an appeals court in France ordered Google to start negotiations with publishers over payments it would be required to make for use of news articles, ending its judicial challenge of a European Union copyright law passed in 2019.
That decision ends the ethical argument over Google’s free ride on the work of professional journalists, and negates a long-held stand that it is fair to use some elements of news, such as headlines and summaries, without paying for it.
Australia has chosen to ignore copyright violations and taken a different approach to tame Internet giants. Its antitrust agency is throwing the kitchen sink at Google and Facebook, with a proposed Bill to redress the “acute bargaining power imbalances between Australian news businesses and Google and Facebook.”
The two American Internet companies hold a 33 percent share of the Australian advertising market, and Google, for example, is over a hundred times bigger than the biggest publisher — Rupert Murdoch’s News Corp., with a mere $9 billion market cap, compared to Google’s $1,200 billion.
The Australian Bill, expected to pass this month, will force Google and Facebook to negotiate financial deals with publishers for using their news articles, and also share user data it collects from readers. The two will also be required to advance notice of algorithmic changes that impact publishers.
Google has already started negotiations with publishers and publicly announced agreements worth $1 billion over three years with 200 publishers in six countries — Brazil, Argentina, Germany, the United Kingdom, Canada and Australia.
That ends Google’s repeated claim over the years that it earns nothing from news because it does not deliver ads in an overwhelming proportion of the news pages, or the moral argument that it merely performs a service to Internet users by organising and delivering the news, and a service to publishers by directing readers to their websites. The fact is, Google benefits from the ‘stickiness’ of news to drive a range of its businesses, and likely has a secret algorithm that even measures the payoff from news.
Sadly, the Indian regulator has so far not shown similar interest in monitoring the Internet giant for most things — least of all its domination of news. Neither have print-centric Indian publishers, despite being financially strapped, and having a rapidly growing addressable market already worth nearly 500 million readers.
India’s copyrights law might be challenging to use against Google, but data suggests Australia’s antitrust template is readymade for India.
According to most recent figures available with the Registrar of Companies, Google earned nearly $1.3 billion from digital ads in India in the financial year 2018-19. When compared with industry figures from Dentsu, for example, it likely represents a 50 percent market share of all digital advertising. It also represents half of the combined $2.6 billion earned by over 100,000 Indian publishers in 2019.
The first set of data places Google’s monopolistic position in digital ads firmly above the combined 33 percent threshold used by Australia’s antitrust agency to crack down on Google and Facebook. There may be nothing to stop India from pursuing similar action.
When considering digital ads and newspaper industry’s combined advertising revenue, it raises the possibility of allowing Indian publishers to collectively negotiate prices of digital ads with Google — a practice that was never possible, say, in the United States because the US Congress would not consider relaxing the country’s antitrust law, and US President Donald Trump nixed an industry plea for exemption.
The timing of the breakthroughs in France and Australia is opportune for India. For one, Indian news media is still at an early stage of digitisation. Even the most advanced outlet earns less than 20 percent of its revenue from digital ads or subscriptions, and most probably earn less than 10 percent. So timely action will ensure that publishers will gain a fair share of the expected explosive growth of digital revenues in the coming years.
Second, even though the media has experienced a slowdown over the past two years, COVID-19 has accelerated the trend’s size and speed. Consequently, many publications are headed to bankruptcy unless they swiftly change course. In recent months, many have bolstered digital operations, erected paywalls and are eyeing other opportunities for digital monetisation. Building a more secure digital fortress could avert the damage caused in, say, the US, where newspapers’ newsroom size and advertising revenue have halved since 2008.
Bala Murali Krishna works for a New York-based startup. Views are personal.
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