UK publishers have raised the prospect that Apple could, like Google and Facebook, be forced to pay for news under the upcoming Digital Markets, Competition and Consumers Bill.
DMG Media, which owns the Daily Mail, Mail on Sunday, Mail Online, Metro, the i and the New Scientist, and the News Media Association, which represents news publishers across the UK, both mentioned the possibility of Apple paying for news in written submissions made to the House of Lords Communications and Digital Select Committee.
Press Gazette asked three senior news industry sources whether their organisations would be pushing for Apple to be impelled to strike cash-for-content deals. Two said they would be, though one wasn’t sure it was “realistic”. The third did not indicate their publisher would target Apple, but said they thought it was a “possibility” that the tech giant could in the future be forced to pay for news.
Apple News is the UK’s most popular news app, just ahead of BBC News and well ahead of any other rival. Publishing partners on Apple News, which include most of the UK’s largest news brands, are offered a share of advertising revenue, depending on their reach, and some can sell subscriptions through the app. Apple News+, the premium version of the app, directly pays partners – including The Times and Sunday Times in the UK, as well as dozens of magazines – for their content.
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Apple did not respond to a request for comment.
What is the Digital Markets, Competition and Consumers Bill?
The Digital Markets, Competition and Consumers Bill is a wide-ranging piece of legislation that seeks to ensure competition in the UK’s technology sector for the benefit of both consumers and companies.
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Under the rules of the law, the Digital Markets Unit – a newly created division of the Competition and Markets Authority – would have the power to “designate” companies for regulation in areas of the digital sector in which they are judged to have market dominance, or “strategic market status” (SMS). They will then be subject to bespoke codes of conduct that seek to introduce greater competition.
The most obvious targets for this legislation are Alphabet (which owns Google and Youtube), Meta (which owns Facebook, Instagram and Whatsapp), Apple, Amazon and Microsoft.
Most notably for the news industry, the Digital Markets Unit is expected to designate Google and Meta and draw up codes of conduct that would seek to address their dominant role in news.
The result would be that UK regulators effectively force Google and Meta to pay publishers for news content. This is the UK’s answer to Australia’s News Media Bargaining Code – which led to Google and Meta agreeing licencing deals with publishers worth more than AU$200m a year – and Canada’s Online News Act, which was passed in Ottawa’s parliament last week.
The UK legislation has been in the pipeline for years. The government kicked off the Digital Markets, Competition and Consumers Bill at the end of April.
Telegraph calls for ‘pioneering’ UK law to be ‘more explicit’
In submissions to the House of Lords review, published last week, DMG Media, Telegraph Media Group and the NMA were all broadly supportive of the legislation.
The Telegraph said that the bill, with “some limited amendment”, “has the potential to be one of the pioneering efforts (alongside the EU, Australia and, shortly, Canada) to recognise the contribution that news production makes to society and the quality of the democratic discourse and take measures to address the power imbalance with dominant digital platforms”.
It said: “The maintenance of the UK’s news media sector relies on the ability of news publishers to secure adequate revenue from the content they generate. The Bill represents an important opportunity to ensure that this issue is addressed and a pro-competitive market sustains a vibrant media sector.”
The Telegraph suggested that the bill would be improved if it made “its role more explicit in supporting news publishers vis-à-vis the major online platforms.
“The digital world has brought huge changes to the way in which content is accessed and consumed, but also to the way in which the production of news media content is financed by advertising and reader revenues,” it said.
“For news publishing organisations, traditional newspaper sales (and directly associated advertising revenues) are in steady structural decline. Over the past 30 years, news publishers have seen advertising revenue reduce from more than half total revenue to less than a third. This decline is not offset by growth in online revenues, and this is acutely the case for online advertising revenue.”
DMG Media: ‘News publishers’ digital revenues have fallen by another 20%’ since 2018
DMG Media praised the bill for its “flexibility to deal with rapidly changing markets” and for being “rigorous”. DMG predicted it would be a “model for many other jurisdictions around the world”.
The publisher suggested the legislation could be “speeded up” to help publishers sooner. It wants the bill to be passed by Christmas or early in 2024.
It said: “The Bill is the culmination of five years of work, beginning with the Cairncross Review in 2018, and continuing with the Furman Review, CMA Digital Advertising Market Study, and numerous subsequent consultations.
“During this time news publishers’ digital revenues have fallen by another 20%, while the market dominant online platforms have continued to make vast profits. It is therefore vital, if the UK is to maintain a sustainable and pluralistic news publishing industry, that the Bill becomes law without delay.
“We understand the hope is that the Commons Committee stage can be completed by the Parliamentary summer recess. We appreciate the Bill must then be carried over into the next session of Parliament after the King’s Speech in the autumn.
“Of course, as the Bill is drafted, a number of significant actions can only be initiated once it becomes law. We therefore hope the Bill can complete its Parliamentary stages as soon as possible, ideally by Christmas or early next year.”
Could Apple be forced to pay for news?
In their submissions to the bill, both DMG Media and the NMA took issue with section 20, which seeks to restrict a regulated firm’s ability to “leverage” its size to build up an unfair advantage in an area where they are not currently judged to hold “strategic market status” (SMS). The news organisations would like section 20 to be bolstered.
Section 20 of the bill currently states that codes of conduct will prevent the target firm from “carrying on activities other than the [SMS activity] in a way that is likely to increase the [its] market power materially, or bolster the strategic significance of its position, in relation to the [SMS activity]”.
DMG and the NMA suggested the wording should be amended to prevent a targeted tech firm from “carrying on activities other than the relevant digital activity in a way that is likely to harm competition in the relevant digital activity or the other activity, increase the undertaking’s market power materially, or bolster the strategic significance of its position, in relation to the relevant digital activity, provided that the conduct is related to the relevant digital activity”.
In other words, DMG and the NMA want to ensure that tech firms – like Apple – are not able to evade regulators while using their clout to unfairly build up market dominance in areas – such as news – that they are not currently judged to have “strategic market status”. Both DMG and the NMA specifically referenced Apple’s position in news, and also used their submissions to raise the possibility that Apple News fall under the scope of regulators.
“Since a SMS firm’s market power undoubtedly spills over into non-SMS activities and it can harm competition there, the leveraging principle is necessary and important – and without it the definition of the SMS activity would come under too much strain,” said DMG Media.
“Say for example that the Apple App Store is designated but Apple News isn’t. Apple could then still impose an unfair term in its Apple News contracts (e.g. about the use of news publishers’ data or their copyright) and claim that the term isn’t caught by the DMU because Apple News isn’t designated (even though the commercial reality is that Apple can impose that term due to its App Store and Operating System market power), by arguing that’s not where the unfair term happened and so legally it can’t be caught.”
Owen Meredith, chief executive of the News Media Association, told Press Gazette: “Government must not permit potential loopholes to frustrate the whole point of this well-designed regime. The DMU must be able to prevent big tech from undermining news publisher sustainability by simply shifting anti-competitive conduct to their non-designated business.
“For example, without a robust anti-leveraging requirement, Apple could impose unfair terms on publishers via its Apple News contracts, notwithstanding the overwhelming market power of the App Store and iOS Operating System gives it the clout to impose such terms.”
The NMA also said regulators should resist any attempts by technology firms to lobby for changes to the appeal process around the bill. It said that a “full merits or ‘judicial review-plus’ standard” would give them “great scope” to “obstruct or delay CMA decision making”. Meredith raised this point in a committee hearing last week.
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