The battle of big news versus big tech has only just begun, but already it might be over.
Facebook and Google have begun paying out to news groups in a bid to soften incoming regulation to curb their dominance of the digital advertising market – and they might just have done enough.
- July 8, 2021
- June 2, 2021
- May 12, 2021
Facebook’s shocking (if not surprising) week-long ban on quality news in Australia last month led to the world-first “news media bargaining code” being watered down somewhat before it gained Royal Assent this week.
Final amendments included the addition a two-month mediation period if both parties fail to reach a commercial agreement over three-months of bargaining, with binding arbitration – where an independent arbitrator chooses the fairest final offer of the two – now a “last resort”.
Under the law, digital platforms will be given notice if the code will apply to them – giving them the chance to exit the news market to avoid it if they wish – and it must now take into account whether they have “made a significant contribution to the sustainability of the Australian news industry” through commercial agreements with news media firms.
Australian lawmakers have also confirmed that tech platforms can strike different deals with different publishers without falling foul of the bargaining code’s “non-differentiation provisions”.
Facebook has welcomed the changes, telling Press Gazette: “These changes provide greater clarity and space for digital platforms and Australian news businesses to reach genuine commercial deals.”
The pair have gone about signing up news media organisations, including some of their loudest critics, on multi-year deals for a flat fee.
There is no transparency around the deals which are made on a publisher by publisher basis. The tech giants decline to reveal what the criteria is for getting a payment and whether money is distributed fairly.
Rupert Murdoch’s News Corp, which owns the Wall Street Journal and Dow Jones in the US, The Australian and Daily Telegraph in Australia, and The Sun and The Times in the UK, has signed up to a three-year deal with Google, which includes payments for premium content on News Showcase and is believed to be worth up to $100m+.
Google chief executive Sundar Pichai has said News Showcase, which gives publishers direct control over how their content appears, will expand from the Google News app to appear on Google Search and Google Discover.
For some these deals amount to a victory that results in news publishers finally receiving payment for their content, which enriches the platforms it sits on, and goes some way to addressing a market imbalance that sees content creators reap less reward than the platforms that host their work.
Press Gazette has been calling on the Duopoly – Facebook and Google – to cut a fairer deal with news publishers since 2017, saying to do so is “not just fair” but “enlightened self interest” on the part of the platforms.
But for others the payments are little more than “sweetheart deals” which serve to undermine legislation that would help level the digital playing field and offer a more stable and long-term solution to the problem of making journalism pay in the digital age.
Among the critics is Lord Rothermere, owner of Mail, Metro and i publisher DMG Media. “As long as the platforms persuade enough desperate news publishers to sign take-it-or-leave-it deals, there will now be no fair, independent arbitration,” he said in a letter to the FT.
“Meanwhile Google has signed a global deal with one of its most vociferous critics. News Corp, owner of The Times, has announced it has won ‘significant payments’ and ‘the sharing of ad revenue via Google’s ad technology services’. What does it give in return?
“Will it continue to fight for fair terms of business for all publishers, or are two of the world’s most ruthless companies now locked in an unholy alliance, giving rise to unfair competition unless its terms are made public?” (DMG Media has signed up to Facebook News, but has yet to strike a deal with Google.)
Similar concerns have been voiced by campaign group Marketers for an Open Web. Tim Cowen, legal advisor to the group, has called on UK competition watchdog the Competition and Markets Authority to take action in regulating the tech giants.
He wrote in Press Gazette: “News Corp has capitulated in the face of Google’s threats; it’s effectively done a sweetheart deal to become an app on the Google platform. The deal is testament to Google’s power.
“It also appears that Rupert Murdoch’s company has gained favourable terms and stolen a march on the competition.” He went on: “Ok, but how will it now hold Google to account?”
Secretary general of the trade body for global news licensing agencies the PDLA, Andrew Hughes, writes in Press Gazette that a fairer deal would see Google pay news publishers at least $1bn a year (triple the current cash on offer) as a licensing fee for exploiting their content.
Google has said publishers in the US don’t want collective bargaining as it begins negotiations in its home market. While major publisher Axel Springer has refused to sign up to Facebook News in Germany.
The $1bn Facebook and Google have each pledged to invest in the news industry globally over three years compared to profits of $29.1bn and $40.3bn respectively, with both companies growing year on year despite the pandemic.
Facebook said it has paid out $600m (£430m) since 2018 “to support the news industry”. This includes £4.5m in the UK to fund more than 80 community journalists to work in local/regional newsrooms.
Facebook has signed commercial deals with the following publishers and broadcasters in the UK alone to appear on Facebook News:
- Channel 4 News
- Conde Nast
- Daily Mail Group
- DC Thomson
- ESI Media
- The Economist
- Financial Times
- The Guardian
- The Independent
- JPI Media
- Midlands News Association
- Sky News
- Telegraph Media Group
Google has also paid money back to the news industry. Its Google News Initiative has pledged $300m over three years since 2018 and came off the back of the €150m Digital News Innovation Fund. Last year Google ran an emergency relief fund for local news publishers to help them during the coronavirus downturn.
It is also a sponsor of Press Gazette’s British Journalism Awards.
More than 500 news have publications signed up to Google News Showcase in over a dozen countries so far. There are more than 120 signed up in the UK alone, including:
- DC Thomson
- Evening Standard
- The Financial Times
- Iliffe Media
- The Independent
- Midland News Association
- New Statesman
- JPI Media
- The Telegraph
Facebook has confirmed it is paying tens of millions of pounds to national and regional/local news outlets in the UK alone to be part of Facebook News.
A spokesperson said: “This is a substantial multi-year investment in the UK news ecosystem and we’re committed to working with the industry to build long term sustainable models for journalism.”
Press Gazette understands that for one medium-sized UK regional publisher, the money from Facebook amounts to roughly half-a-million pounds over three years, while Google offered about half that amount.
It is understood that mid-sized publishers, with 1-2m browsers per month, have signed deals for around £200k per year over three years to appear on Google News Showcase.
Google has said its News Showcase platform will not be profitable for the company and payments to publishers range from “five figures to seven figures”, the Irish Independent reported, with some deals still to be finalised this year.
A spokesperson told Press Gazette Google News Showcase is a “global investment that will help publishers make money from their content, beyond simple snippets and links”, but that “not all publishers produce the volume and type of content necessary for the product, and our level of funding can’t account for all news organisations”.
Both Facebook and Google have said they are committed to finding a long-term sustainable model for journalism, with news programmes going beyond their initial three-year investments.
A Google spokesperson said: “As we’ve always said, we support modernizing the rules for the digital age. The European Copyright debate for example aimed at striking the right balance between news publishers large and small, and platforms.
“In Australia we have found a constructive path to support journalism that enables payments to be made to news publishers through Google News Showcase, instead of requiring payment for links.
“We will continue to invest in tools, partnerships and funding to support sustainable journalism, with publishers of all sizes, and work with governments around the world.”
Whether or not this will ultimately prove to be a solution to the problem of funding news journalism in the digital age remains to be seen, but for now it seems the tech giants have won a decisive battle.