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April 14, 2021updated 30 Sep 2022 10:12am

Competition watchdog to look at ‘subtle ways’ to rebalance publisher-platform relationship

By Charlotte Tobitt

The UK’s competition watchdog wants to create “greater incentives” for tech giants like Facebook and Google to bargain in good faith with news publishers over payment for content.

Two directors from the Competition and Markets Authority told the House of Lords Communications and Digital Committee they favour a code of conduct being put in place in the style of Australia to ensure there are “fair and reasonable terms” between platforms and content providers.

They also suggested the new Digital Markets Unit, currently being run in a “shadow” non-statutory capacity until legislation is passed, could act as an intermediary to keep an eye on changes to the platforms’ algorithms without forcing them to be published.

Simeon Thornton, a director at the CMA who led its market study into online platforms and digital advertising, said: “I think there are some subtle ways in which you might be able to shift the bargaining position again between platforms and news media organisations and tilt the balance a bit in the news media organisations’ favour relative to the current situation.”

[Read more: UK launches Digital Markets Unit watchdog for Google and Facebook]

He suggested that, for example, media organisations could be given “greater influence” over the way their content is shown in search results.

“Because at the moment it’s fairly holistic,” he said. “You get the whole article and there’s an incentive for Google to keep people on their system looking at the article. But if news media organisations had an opportunity to say you only get a smaller snippet, a smaller bit of information, that again might tip the relationship and give Google a greater incentive to bargain in good faith over payment for content.

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“I think it’s very difficult legitimately for a regulator to say the price for this content is X and the price for that content is Y, but the more we can create a situation in which Google has genuine incentives to bargain, the better.”

Algorithm changes

Thornton appeared to address criticism over opaque algorithms, in particular from Mail Online which has accused Google of consistently cutting its search visibility over a six-year period, including in 2019 when an algorithm change saw its search traffic fall by 50% overnight.

[Read more: Daily Mail publisher rejected Google deal because ‘money not adequate and terms too restrictive’]

The final version of Australia’s news media and digital platforms bargaining code – which led to Facebook temporarily pulling its services in the country – forces platforms to give notice of planned algorithm changes that could significantly affect publishers’ traffic, but stops short of any further transparency.

Thornton told peers on Tuesday: “On the clarity around algorithms it is understandable that news media organisations for whom Google is a very important source of traffic will want to be able to plan and will want to have confidence that when Google makes changes to its algorithms it’s not motivated by nefarious commercial considerations.

“Clearly algorithms are going to change, and it’s in the nature of those algorithms that they must change over time, but I think the position we’ve reached in relation to algorithms is that there may well be merit in the DMU being able to scrutinise those algorithms to see whether there are considerations being taken into account that shouldn’t be taken into account, for example commercial considerations.”

Thornton said there were legitimate reasons not to expose all the workings of such algorithms to third-parties, warning that people could game the system to get to the top of the search results.

He said: “That’s where a trusted intermediary like the DMU can come in and look at the algorithm and make sure that it does what it says on the tin rather than third-parties concluding that Google must have done something for a particular reason.”

Global picture of tech regulation

Australia’s legislation is centred on a mandatory code of conduct forcing Google and Facebook to pay for news content displayed on their platforms.

Both companies have been striking ad-hoc deals with publishers in Australia and elsewhere. Critics, including Daily Mail editor emeritus Peter Wright and competition lawyer Tim Cowen, have warned they are seeking to avoid the level playing field that legislation will introduce and could withdraw once the threat of regulation has gone away again.

Daniel Gordon, the CMA’s senior director of markets, told the hearing the UK regulator’s code of conduct should be statutory and enforceable in law.

He also said the CMA should determine what a fair process and model for negotiations would be rather than “trying to second guess these complicated transactions between businesses that it doesn’t run and to impose terms”.

Gordon said the CMA has been watching how the law-making process plays out in Australia as well as other countries like France and Germany which are putting their own measures in place.

[Read more: Regulation: Politicians running the world’s leading economies are planning to tame Facebook and Google]

Of Spain, where Google shut down Google News rather than comply with a law attempting to force it to pay publishers for their links and headlines, Gordon said that “didn’t go too well but is useful to know about”.

Facebook briefly blocked news on its platform in Australia before winning some concessions that mean the tech giants can avoid being subject to the code by striking enough deals with publishers.

Google said it had 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”.

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