Indian publishers are being Looted by Google and Facebook News Aggregators. New IT law can shape.

The Imbalance in the Digital Ecosystem

In today’s digitally dominant world, technology platforms such as Google and Facebook have evolved into significant power centers. They aggregate, distribute, and monetize news and content created by different publishers, accruing substantial revenues from the generated traffic. The original content creators, or digital publishers, however, often receive little or inadequate compensation. This skewed revenue-sharing system has ignited a worldwide debate on the necessity for a fair distribution of income between original producers and content distributors.

The Global Response: Initiatives for Fair Revenue-Sharing

Globally, several nations have stepped up to rectify this imbalance. In 2021, Australia spearheaded a landmark move by adopting the News Media Bargaining Code (NMBC). This legislation mandates large technology platforms operating within Australia to remunerate local news publishers for their content. The act also outlines a method of arbitration if the parties fail to negotiate a settlement and imposes heavy fines if platforms violate agreements.

France took a different route to address this issue, with the French Competition Authority (FCA) investigating Google for abuse of dominance and unfair transaction conditions. Google resolved the copyright dispute by agreeing to negotiate with news platforms over digital content and revenue sharing.

Spain had its own unique experience. When the Spanish government mandated a monthly fee to be paid by Google to newspapers in 2014, Google responded by shutting down its news platform. However, changes to Spain’s copyright law in 2021, in line with European Union regulations, compelled platforms to negotiate revenue-sharing deals with publishers. This led to the revival of Google News in Spain.

Different Routes, Different Outcomes

Australia utilized competition law to draft the NMBC, a more pragmatic approach than copyright law followed by other countries. The results were strikingly different. Two of Australia’s largest TV broadcasters struck deals worth $47 million annually with Google. In contrast, in France, a $76 million deal was split among 121 publishers over three years, averaging to only $209,000 annually per publisher.

In Canada, the Online News Act was passed, mandating Big Tech to negotiate commercial deals with publishers for their content. Meanwhile, in the US, California introduced a bill to impose a ‘journalism usage fee’ on tech platforms, directing them to share portions of advertising revenue with publishers.

India’s Absence of a Revenue-Sharing Policy

Despite these global precedents, India lacks a comprehensive legislation or policy for equitable revenue-sharing between Big Tech and digital publishers. However, the Indian government has recognized the need for such a framework. At the recent Digital News Publishers Association (DNPA) conference, the Union information and broadcasting secretary highlighted the importance of digital publishers receiving a fair share of the revenue generated by Big Tech platforms.

Rajeev Chandrasekhar, the Minister of state for IT and electronics, also underscored the imbalance between platforms and creators, where the former wield ‘disproportionate control’ over advertising revenues. He stated that the government is considering revising IT laws to facilitate necessary changes.

The Role of the Competition Commission of India

The Competition Commission of India (CCI) has also taken an interest in the matter. Various bodies representing digital publishers and news broadcasters, including the DNPA, News Broadcasters and Digital Association (NBDA), and the Indian Newspaper Society (INS), have approached the CCI with concerns about unfair and arbitrary conditions in revenue-sharing agreements and the abuse of dominance by Google in its Terms of Service agreement.

The Imperative for a Fair Revenue-Sharing Policy in India

India’s rapid digitization trajectory makes it imperative to address the issue of equitable revenue-sharing between digital platforms and media companies. There’s no doubt that Big Tech and publishers need each other. Therefore, it is crucial to ensure a fair split of revenue between the creators of news content and aggregators, which would foster rapid and sustainable growth of the internet economy.