Fleet Street confident new UK ‘code of conduct’ will soon force Google and Meta to pay for news

UK publishers are increasingly confident Boris Johnson’s government will pass Australia-style legislation forcing Google and Meta to pay for news.

If Britain follows the pattern of Australia, the threat of legislation could lead to UK publishers being paid around £200m a year by the two tech giants.

The move comes some five years after Press Gazette launched its Duopoly campaign, which called for a fairer deal between tech giants and publishers as the pair sucked billions of ad revenue out of the UK digital ecosystem

Some senior figures in the British news industry believe the UK’s big tech “code of conduct” will go further than Australia’s news media bargaining code – and ultimately result in Google and Meta paying out hundreds of millions of pounds a year to Fleet Street and the regional press.

This week, Press Gazette has spoken to senior sources at four major UK news organisations about their expectations for the code.

While previously there was “frustration” among some publishers at the slow progress of the Digital Competition Bill, two sources said they had observed “an increased sense of urgency” in Westminster in recent weeks.

One source speculated that the UK government may be feeling under pressure to introduce its big tech regulations for “fear of being left behind” by other jurisdictions.

Australia passed its news media bargaining code nearly a year ago, and the law has been credited with securing publisher deals worth more than AU$200m (£105m) annually with Google and Meta. Australia is just over half the size of the UK economy.

In Canada, Justin Trudeau has pledged to introduce Australia-style rules this year. As revealed by Press Gazette, Canadian news publishers expect their law to result in deals worth up to CA$150m (£85m) a year.

The European Union is also well advanced with big tech regulations, and, in the United States, the Journalism Competition and Preservation Act is gaining political traction.

What will the UK’s ‘code of conduct’ look like?

The UK government plans to introduce new big tech regulations through two acts: the Online Safety Bill, which is already advancing through parliament, and the Digital Competition Bill, the details of which have yet to be confirmed.

The Digital Competition Bill is expected to include a “code of conduct” to regulate designated technology companies. The code would be overseen by the Digital Markets Unit (DMU), a newly formed arm of the Competition and Markets Authority (CMA), which would aim to “govern elements of how [digital firms] do business with other companies and treat their users”.

The code is expected to include rules governing relations between relevant technology platforms and news publishers.

It is not yet clear what specific rules will be included in the code of conduct. The CMA and Ofcom, the UK’s broadcast regulator, submitted advice to the government on what the code should look like in November, but this has not yet been made public.

On 8 February, CMA chief executive Andrea Coscelli told a Lords committee hearing that he expected the advice to be published, along with a government response, “in the coming weeks”.

Three news industry sources spoken to by Press Gazette this week were confident that the UK code, like the Australian code, will include a requirement for designated platforms to agree cash-for-content deals with publishers or face the prospect of arbitration.

Two sources, who work for separate major UK news organisations, also believe the code will include rules forcing Google and Meta to share audience data with publishers.

“That disclosure will be very, very important,” said one, explaining that this data could be used by publishers to determine how much their content is worth to the technology companies. Google and Meta, previously known as Facebook, have long claimed that news publishers gain more value from them than vice-versa.

Three sources, all from different news organisations, said they expect the code to allow them to collectively negotiate deals with Google and Meta if they choose to do so. They also predicted that it would include requirements for Google and Meta to share information about their algorithms with publishers.

Earlier this month, a source at the government’s Department for Digital, Culture, Media and Sport (DCMS), told the Mail on Sunday that the code “would give publishers greater transparency over the algorithms that drive traffic and revenue, more control over the presentation and branding of their content, as well as greater access to data on how users interact with their content”.

It is not clear whether the UK code would include broadcasters, or be solely focused on the relationship between platforms and written news publishers. Two news industry sources predicted broadcasters would not be included at this stage.

All four news industry sources spoken to by Press Gazette said they believe the government intends to introduce the bill in the Queen’s Speech, expected in May. This would pave the way for the code to be activated during the 2022/23 parliamentary session.

The Digital Markets Unit is already operational, albeit in “shadow” form, and publishers are confident it will be ready to start implementing the code when it is legislated to do so.

Two news industry sources said they had heard the code is receiving attention not just from the DCMS, but from Downing Street as well.

However, the government has publicly confirmed nothing at this stage.

A DCMS spokesperson said: “No decisions have been made on what powers will be given to the Digital Markets Unit. Our pro-competition regime will improve competition in the digital economy and rebalance the relationship between the most powerful tech firms and the businesses and consumers across the economy who rely on them.”

How does Australia’s code work…?

Australia’s News Media and Digital Platforms Mandatory Bargaining Code, which came into effect in March 2021, states that “designated” digital companies must negotiate deals with media companies to pay them for news content that appears on their platforms.

Google and Meta, which together dominate the digital advertising market, were the target of this code. But the Australian government has so far withheld from making either of them designated platforms.

The Australian Competition and Consumer Commission (ACCC), which designed the act, explains: “In deciding whether to designate a digital platform, the Treasurer must consider whether there is a significant bargaining power imbalance between the platform corporation and Australian news businesses, and also whether the platform corporation has made a significant contribution to the sustainability of the Australian news industry, including through agreements to remunerate those businesses for their news content.”

Therefore, Google and Meta have essentially been able to avoid designation because they have agreed licensing deals with a large number of Australian news companies, including News Corp, Nine, Seven West and ABC.

Through these deals, Google and Meta are understood to be paying out more than AU$200m (£105m) a year to the Australian news industry. The ACCC states that it “considers that existence of the code and the threat of designation is having the appropriate and hoped for impact”.

… and how might the UK’s code differ?

While the Australian news media bargaining code was a standalone piece of legislation, the UK’s code of conduct is due to be part of a wider Digital Competition Bill.

The act is also expected to grant the Digital Markets Unit “pro-competitive intervention powers” and introduce “enhanced merger rules”.

Two news industry sources told Press Gazette that, because the British rules would have wider scope than the Australian code, Google and Meta are highly likely to be “designated” in the UK. They would therefore be subject to all rules of the code. 

In Australia, the media bargaining code is thought to have resulted in Google and Meta paying news companies more than AU$200m a year.  Ostensibly, publishers are primarily paid by Google for participation in News Showcase, an aggregation service, and by Meta for participation in Facebook News.

Many UK publishers have signed up for the same schemes, but investigations by Press Gazette suggest they are being paid less money for their participation.

If and when the UK passes its own code, British publishers will expect to start striking more lucrative deals with Google and Meta, in line with the Australian experience.

A source at one major publisher predicted that British news outlets may be able to use the UK code, and the expected data rules, to negotiate more valuable deals.

Most UK news sources we spoke to were not willing to put a figure on how much they expect to be paid by the tech duo.

But a senior source at one organisation predicted annual payments would ultimately total hundreds of millions of pounds for UK publishers.

How will Google and Facebook react?

In the months before Australia’s news media bargaining code, Google and Meta lobbied hard against the law. Google threatened to withdraw services from Australia, while Meta – then Facebook – barred news content from its newsfeed in Australia.

It is currently unclear how they will react to the prospect of similar legislation in the UK, European Union and Canada. 

Following a Press Gazette report on progress of the Canadian code this week, a Google spokesperson said their company wants to work with Justin Trudeau’s government to “create a ‘Canada made’ solution that will ensure a robust future for news in Canada and enable innovation.” They said the “Australian approach doesn’t do that and it doesn’t provide a sustainable model for the future of journalism”.

Asked for Google’s response to the UK’s potential plans for an Australia-style code, Maggie Shiels, a Google spokesperson for news, said: “We’ve been engaging closely with the UK government over many months as they consider how to ensure a robust future for news and enable innovation.

“We already have licensing deals in place with over 200 titles in the UK worth millions of pounds, and most of these are with local and regional publishers where support is needed most.

“As one of the world’s largest supporters of news, we are committed to working with the government on public policies that genuinely strengthen journalism and protect people’s access to a diversity of voices online – as well as the open web.”

In the UK, and elsewhere, Google has given money and support to news companies through a various schemes, including News Showcase, the News Initiative, the Digital Growth Programme, the Subscriptions Lab and the Google News Lab.

Meta launched Facebook News in the UK in January 2021 and says it pays publishers tens of millions of pounds to be part of this service. Meta says it has invested $17m in its Community News Project in the UK.

Google and Meta have long argued that news publishers gain more from them than they do from news publishers.

Google says that news is not a major driver of revenue for its company. In 2020, the company claims less than 2% of searches related to news and that the majority of news searches do not show adverts.

Meta says its newsfeed sent more than 180bn clicks to news publishers in 2020 and estimates that this traffic was worth $9bn. It says that news content makes up less than 4% of Facebook feed content globally.

Photo credit: Daniel Leal/Pool via REUTERS

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